Banking – FinTech and Blockchain Law Watch

Federal Reserve Issues Policy Statement Limiting Crypto-Activities of State Member Banks

Jan 27 2023

By Grant F. Butler, Carly E. Howard, Andrew M. Hinkes

The Board of Governors of the Federal Reserve (the “FRB”) issued a policy statement that interprets Section 9(13) of the Federal Reserve Act to limit state member banks to engage as principal in only activities that are (a) permissible for a national bank or (b) explicitly permissible for state banks under federal law. The activity restrictions apply equally to insured and uninsured state member banks supervised directly by the FRB.

Let Me In: Wyoming Special Purpose Bank Sues Fed for Access to Payments System

Jun 10 2022

By Grant F. Butler, Andrew M. Hinkes, and Robert M. Tammero, Jr.

Custodia Bank (“Custodia”) filed a complaint against the Federal Reserve Board (“FRB”) and the Federal Reserve Bank of Kansas City (“FRBKC”) in Wyoming federal court alleging that the FRB and FRBKC are unlawfully refusing to act on Custodia’s application for a master account. A Federal Reserve master account allows banks to directly access the Federal Reserve and utilize the Federal Reserve System’s payment, clearing and settlement services.

The Future of Stable (Bank) Coins?: President’s Working Group on Financial Markets Urges Legislation Limiting Stablecoins to Insured Banks

Nov 03 2021

By Judith Rinearson, Jeremy M. McLaughlin, and Daniel S. Nuñez Cohen

On 1 November 2021, the President’s Working Group on Financial Markets (PWG), in conjunction with the Federal Deposit Insurance Corporation and the Comptroller of the Currency, issued a long-awaited joint “Report on Stablecoins” (Report). Per the press release (and a speech by Undersecretary of Treasury Nellie Liang), the Report is intended to “identify regulatory gaps related to “payment stablecoins” (defined as stablecoins that are designed to maintain a stable value and “therefore have potential to be used as widespread means of payment”), and to present recommendations for addressing those gaps.”

Never Ending True Lender Uncertainty

Jul 06 2021

By Jeremy McLaughlin and John Reveal

On June 24, 2021, the U.S. House of Representatives passed a resolution to overturn the Office of the Comptroller of the Currency’s (“OCC”) “true lender” regulation that had been finalized on October 30, 2020. This resolution revives the uncertainty regarding the enforceability of loan terms when a national bank or federal savings association assigns loans to third parties. President Biden is expected to sign the resolution.

Taking Bitcoin to the Bank: FDIC Seeks Comments on Bank Services for Digital Assets

May 25 2021

By: Judie Rinearson, Jeremy McLaughlin, and Daniel S. Cohen

The Federal Deposit Insurance Corporation (FDIC) has issued a “Request for Information and Comment on Digital Assets” (RFI) to learn more about the “novel and unique considerations related to digital assets….[g]iven that banks are increasingly exploring the emerging digital asset ecosystem.” A key theme of the RFI is the development of a framework to promote “responsible innovation.” Comments are due by July 16, 2021.

Cannabis Banking in the US – The Latest on the SAFE Act

Apr 06 2021

By: Brenden R. Chainey, Daniel S. Cohen, Daniel F. C. Crowley, Scott J. Gelbman, Barry M. Hartman, Kathleen L. Nicholas

In September 2019, the U.S. House of Representatives passed the “Secure and Fair Enforcement (SAFE) Banking Act of 2019”, the first stand-alone cannabis legislation to be approved by the House of Representatives. Earlier this month, revised versions of the bill were introduced in the House and Senate “to reform federal cannabis laws and reduce the public safety risk in communities across the country.”

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.

Banks Invest in Developing a Digital Blockchain Settlement System

Jun 17 2019

By Jim Bulling, Felix Charlesworth and Andrew Fay

Late last month, several of the world’s largest banks invested $50 million in a digital cash settlement project with the aim of developing a more efficient clearing and settlement system. The new technology, referred to as the ‘utility settlement coin’ (USC), has been a work in progress since 2015, after Swiss bank UBS Group and London-based technology startup Clearmatics announced to the market that they had commenced working on the project.

Offshore entities – ACCC Guidance on Open Banking Accreditation

Sep 25 2018

By Jim Bulling and Felix Charlesworth

As part of its release of the ‘Consumer Data Right Rules Framework’ (Framework), the Australian Competition and Consumer Commission (ACCC) has outlined its accreditation process for entities seeking to become accredited data recipients under the Open Banking Regime.

While Authorised Deposit-taking Institutions (ADIs) will have access to a streamlined accreditation process, all other applicants will need to meet criteria such as:

whether they satisfy a ‘fit and proper’ person test;
the appropriateness and proportionality of the applicant’s systems, resources and procedures;
the adequacy of the applicant’s internal and external dispute resolution processes; and
whether the applicant holds appropriate insurance.

Mastercard assists Open Banking

Jun 07 2018

By Jonathan Lawrence

On 13 January 2018 the second Payment Services Directive (PSD2) became law across the European Union, leading to Open Banking. For background information, please see EU oversight on payments and Open Banking.

Mastercard announced on 5 June that it is launching a suite of services to help banks and FinTech companies navigate the Open Banking environment. The programme seeks to address the liability issues of banks sharing their data with third parties and to help startups to better communicate with their banking partners. For banks, Mastercard is building a pan-European directory of verified and legitimate third party providers, backed by a fraud monitoring service and dispute resolution mechanism. Startups in turn will be provided with a ‘connectivity hub’ that will help third parties establish and maintain communication with banks.

The new services will be launched first during a pilot phase in early 2019, with the UK and Poland being a particular priority, before being rolled out across Europe later that year.

Tag:Banking