FinTech Industry & Regulation – Page 7 – FinTech and Blockchain Law Watch

UK Makes Contactless Payments Easier – Purchases up to £100 (~$140) Will No Longer Require Strong Customer Authentication

Mar 08 2021

Following consultation in January 2021 (CP21/3), the UK Financial Conduct Authority (“FCA”) published its decision, on 3 March (PS21/2), to increase the contactless payment limits under the Strong Customer Authentication (“SCA”) requirements. Essentially, SCA is not required for single contactless transactions up to the value of £100 (about $140) per transaction (increased from the previous £45 ($62)), subject to (amongst others) the cumulative transaction value threshold of £300 (about $420) (increased from the previous £130 ($180)). Once this cumulative threshold is hit, the contactless transaction must again be authenticated before the transaction can proceed. The cumulative threshold was initially proposed at £200 in the consultation but is set at £300 in response to the industry feedback (according to the FCA).

It’s Happening in the UK: UK Treasury to Regulate Stablecoins

Mar 02 2021

By Kai Zhang and Judie Rinearson

On 7 January, the UK Treasury published a consultation on its proposed approach to regulating stablecoins. https://www.gov.uk/government/consultations/uk-regulatory-approach-to-cryptoassets-and-stablecoins-consultation-and-call-for-evidence Although the title of the consultation includes “cryptoassets” – this is the just first stage in the consultative process for cryptoassets, which focuses on stablecoins referred to as “stable tokens”. The consultation closes on 21 March. For US readers, a “consultation” is the start of regulatory process, not unlike an “Advance Notice of Proposed Rulemaking” or “ANPR” in the US. The UK government sets out the supervisory perimeters, seeking input from the public, and leaving the detailed requirements to be designed by the regulators. Accordingly, the consultation discusses only general principles and the overall framework.

Post-Brexit: Significant Changes to UK Cross-Border Payments Regulation

Mar 01 2021

By Kai Zhang, Philip Morgan and Judie Rinearson

The EU Cross-Border Payments Regulation 924/2009 (as amended by Regulation 2019/518) (EU CBPR) has been “onshored” with significant changes into UK law following the end of the Brexit transition period (i.e., since 1 January 2021). The EU CBPR applied directly in the UK until 31 December 2020. Essentially, the onshored UK CBPR regime only retains the transparency requirements on currency conversion charges under the EU CBPR. This means that UK payment service providers (PSPs) no longer have to comply with other requirements under the EU CBPR.

Significant Changes are Coming: UK Payments Regulation

Mar 01 2021

By Kai Zhang, Philip Morgan, and Judie Rinearson

The UK Financial Conduct Authority (FCA) commenced, on 28 January 2021, a consultation (CP21/3) on various changes to the UK regulation of payment services and electronic money. The proposals include amendments to the substantive regulatory requirements as well as changes to the FCA guidance. Similar to an Advance Notice of Proposed Rulemaking (ANPR) in the US, the consultation seeks industry and public feedback, and is fully expected to lead to formal regulation in the near future.

Potential Major Change for U.S. Prepaid Products: Paypal vs CFPB Court Vacates Two Significant Restrictions in CFPB’s Prepaid Account Rule

Jan 13 2021

By Judith Rinearson, Andrew C. Glass, Gregory N. Blase, and Hollee M. Boudreau

On 30 December 2020, the United States District Court for the District of Columbia entered an order invalidating two provisions of the “Prepaid Account Rule” (the Rule) promulgated by the Consumer Financial Protection Bureau (CFPB). Specifically, the order invalidated the Rule’s mandatory short form disclosure requirement and the requirement for a thirty-day delay before linking prepaid products to credit, on the basis that the CFPB had exceeded its statutory authority.¹

Brexit: Payment Regulations on a Temporary Standstill

Dec 29 2020

By Kai Zhang, Special Counsel, London

Changes are coming to the UK payment services regulatory landscape post-Brexit (from 1 January 2021). However, certain Brexit-triggered changes have been put by the FCA on “standstill”, which lasts until 31 March 2022; i.e. during this standstill period, firms can effectively ignore the relevant changes and continue to comply with the current requirements.

We summarise here how the standstill applies to some of the key legislation. Note that this does not cover the changes themselves that have been made due to Brexit.

The Next Wave of Fintech Investors: Banks!

Nov 23 2020

By: Judie Rinearson

While global investment in fintechs has slowed, interest in fintech investments from the banking sector has actually increased. What’s particularly intriguing is that this is not coming just from the big banks (who have been involved in the fintech sector for years) but frequently many smaller banks are starting to recognize the opportunity presented by investing in the fintechs — especially those fintechs that the banks already work with. Boston partners, Stan Ragalevsky and Rob Tammero have analyzed this development, which looks to be a true win-win for both the banks and fintechs involved. Click here to read more.

Good News for Fintechs: Taiwan Announces Plans to Streamline Payments Regulations

Nov 23 2020

By: Joseph Tseng

In an effort to promote the use of electronic payments and develop its fintech industries, Taiwan’s financial regulator has moved to combine the existing legal regime governing payment institutions and electronic money by proposing an amendment to the Act Governing Electronic Payment Institutions. The proposed amendment seeks both to cope with the disappearing line between physical cards, electronic stored-value cards and virtual, app-based services, while expanding the businesses that electronic payment institutions can do. Click here for more information.

California Enacts “Mini-CFPB” Law, Significantly Altering Financial Services Regulation in the State

Oct 01 2020

By: Jeremy McLaughlin & Mehreen Ahmed

On September 25, 2020, California Governor Newsom signed AB-1864 into law, which will significantly change the landscape of consumer financial service regulation in the state. The law renames the Department of Business Oversight as the Department of Financial Protection and Innovation (“DFPI”). Along with a new name, the DFPI also gains important enforcement powers as the agency will now have the power to enforce all California laws related to “persons offering or providing consumer financial products or services in the state.” The law allows DFPI to establish a “Financial and Technology Innovation Office.” A key aim of the law is to improve the state’s consumer protection capacity by increasing the number of investigators and attorneys to oversee financial institutions.

CSBS Rolls Out Joint Examination Initiative for Nationwide Payments Firms

Sep 21 2020

By Jeremy McLaughlin and Dan S. Cohen

On September 17, the Conference of State Bank Supervisors (CSBS) announced that at least 40 states will establish a joint examination process for “nationwide payments firms” for the 2021 examination cycle. Known as “MSB Networked Supervision,” the initiative will allow 78 licensed payments companies, including some cryptocurrency exchanges, to undergo one joint examination rather than separate examinations for each state in which they are licensed. The examinations will be conducted by a group of examiners from multiple states but led by one designated state’s regulator. To be eligible, companies must be licensed in at least 40 states. This initiative follows the “One Company, One Exam Pilot” that was completed earlier this year and is part of CSBS Vision 2020, an initiative to create “a networked system of nonbank licensing and supervision.”

Category:FinTech Industry & Regulation