Showing 44 posts in Current Developments / Legislation.
On Wednesday, April 26, the Conference of State Bank Supervisors (the “CSBS”) filed suit against the Office of the Comptroller and Currency and its Comptroller Thomas J. Curry (collectively, the OCC”) over Curry’s December 2016 announcement that the OCC has created a new national bank charter for non-bank companies (the “Non-Bank Charter Rule”). This Non-Bank Charter Rule, the complaint alleges, will pull chartered non-bank companies into the national banking regulatory system, and will preempt and replace state-based banking regulation, licensing, and supervisory responsibility of state authorities. Read More ›
Prepaid cards are increasingly popular—they are frequently used instead of traditional bank accounts to shop, withdraw cash from ATMs, pay for healthcare costs from health savings accounts, distribute natural disaster aid, and pay wages. Read More ›
A Cautionary Tale for Money Service Businesses: How Violating the Bank Secrecy Act Could Cost Millions
On February 27, 2017, The Financial Crimes Enforcement Network (“FinCEN”) fined Merchants Bank of California (“Merchants”) $7 million for what it called “egregious” violations of the Bank Secrecy Act (“BSA”). The Office of the Comptroller of the Currency simultaneously assessed a $1 million civil monetary penalty against Merchants because it violated two previous consent orders. Merchants is a community bank located in Carson City, California. The Bank had a large portfolio of Money Service Businesses (“MSBs”) customers. MSBs are generally recognized by federal regulators to include: (1) currency dealers or exchangers; (2) check cashers; (3) issuers of traveler’s checks, money orders, or stored value; (4) sellers or redeemers of traveler’s checks, money orders, or stored value; and (5) money transmitters. In Merchants’ case, it had 165 check-cashing and 44 money-transmitter customers, who often operated at great distances from the Bank. Compounding the situation was the fact that Bank insiders owned or managed a number of the MSB customers. Read More ›
The Office of the Comptroller of the Currency (OCC), a subset of the U.S. Treasury Department, recently announced that it will create a special purpose national bank charter specifically for financial technology (fintech) companies. This announcement comes on the heels of the rapid rise in fintech and in the number of companies that use such technology. An official charter aims to supervise the more than 4,000 fintech companies more closely and provide a framework for new companies to operate in the financial services industry. Read More ›
Medieval kings have something in common with cutting-edge software developers forking new applications off the blockchain. Read More ›
It’s EZ as 1, 2, 3 . . . Disclosure, limited liability and periodic statements required for prepaid accounts under the CFPB’s new Prepaid Rule amending Regulations E and Z
The Consumer Financial Protection Bureau (CFPB) recently issued a final rule, the “Prepaid Rule,” amending Regulations E and Z. The Prepaid Rule affects issuers of prepaid personal, household or family accounts by expanding the applicability of Regulations E and Z as of October 1, 2017. It brings “prepaid accounts” into Regulation E’s definition of “account” and broadens the reach of Regulation Z’s overdraft credit features. While this rule applies to digital wallets and P2P payments, the CFPB did not extend this rule to virtual currency. Read More ›
Defendants in putative class actions suits filed in federal court attempting recovery for data breaches have generally been successful at obtaining dismissal of the claims before their merits can be considered. This is due to the significant hurdle imposed by the standing requirement under Article III of the U.S. Constitution. Many federal courts have dismissed these claims as lacking Article III standing where the plaintiffs have not alleged a present and ascertainable injury, or an “injury-in-fact”. But several of the federal appellate courts have indicated a willingness to find standing in these cases, and the recent decision in Galaria et al. v. Nationwide Mutual Insurance Co. has further strengthened the hand of plaintiffs’ counsel. Read More ›
With the recent decision in Spokeo v. Robbins, bloggers and legal commentators have spent much time discussing FCRA. The Spokeo decision is one for all of us to watch closely, but a check of basic compliance issues is always in order. This article focuses on handling consumer disputes, following a surprising verdict. Read More ›
On May 5, 2016, the CFPB unveiled a proposed arbitration rule which would dramatically limit the contractual rights of financial institutions. Under the rule certain arbitration provisions would be unenforceable as bars to class actions against financial institutions. Read More ›
Tennessee has recently enacted some potentially far reaching changes to its data breach notification statutes. These changes could pose substantial burdens on businesses and professional organizations that do business in Tennessee and maintain personal information of Tennessee residents. Effective July 1, 2016, the Tennessee definition of what constitutes a “breach of the security of the system” that triggers notice includes not only the loss of unencrypted data but encrypted data as well (if that data includes personally identifiable information of Tennesseans). Tennessee is the first state in the country to eliminate a safe harbor from data breach notice obligations where the breach involves encrypted data. Read More ›
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Christopher C. Tieke is an associate in Frost Brown Todd's Louisville office, focusing his practice on business litigation. He graduated from the University of Cincinnati College of Law, with magna cum laude honors; served as an Associate Member of the University of Cincinnati Law Review; and participated in the Entrepreneurship and Community Development Clinic.