Financial services

Troutman Pepper Consumer Financial Services Weekly Bulletin – October 2022 #2 | Troutman pepper

To help you keep abreast of relevant activities, below is a breakdown of some of the biggest federal and state level events impacting the consumer financial services industry in the past week:

Federal activities

State activities

Federal activities:

  • On October 4, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) issued a press release documenting its collaborative cross-border Central Bank Digital Currency (CBDC) payment pilot project with Capgemini, which facilitated gross settlement in time. real between CBDC and CBDC. transactions between different distributed ledger networks run on Quorum and Corda. For more information, click here.
  • On October 4, the Consumer Financial Protection Bureau (Bureau) filed a lawsuit against Choice Money Transfer for alleged violations of the Funds Transfer Rule and the Electronic Funds Transfer (EFTA) Act by failing to accurately disclosing material advance payment information to remittance senders and maintaining insufficient information. record-keeping practices, which made it difficult for consumers to dispute erroneous transactions and obtain reimbursement for certain fees. For more information, click here.
  • On October 4, the Federal Housing Administration (FHA) issued a Request for Information (RFI) on how it can increase access to low-balance mortgages through its single-family mortgage insurance programs, which generally apply to mortgages with an initial principal obligation of $70,000. or less. In conjunction with RFI, the U.S. Department of Housing and Urban Development (HUD) released a report titled Financing Cheaper Homes: Small Mortgages, which highlighted the difficulties faced by borrowers who need loans to buy low-cost housing. For more information on the RFI, click on here. For more information on the HUD report, click here.
  • On October 3, the Federal Reserve finalized updates to Regulation II (Final Rule), which establishes standards for assessing whether a debit card interchange fee received by a debit card issuer for a debit transaction electronic is reasonable and proportionate to the costs incurred by the issuer. in relation to the transaction. Like the proposed rule published in 2021, the final rule requires debit issuers to activate unaffiliated payment card networks for all types of transactions, including but not limited to online transactions (card not present). For more information, click here.
  • On October 3, the US Financial Stability Supervisory Board (FSOC) released its Digital Asset Financial Stability Risk and Regulation Reportwhich was issued in response to President Biden’s Executive Order 14067, Ensure responsible development of digital assets. The report identified three gaps in the regulation of crypto-asset activity in the United States: (1) cash markets for crypto-assets that are not securities are subject to limited direct federal regulation; (2) crypto-asset businesses lack a consistent or comprehensive regulatory framework and may engage in regulatory arbitrage; and (3) a number of crypto-asset trading platforms have offered to offer retail clients direct access to markets by vertically integrating services provided by intermediaries such as brokers or futures commission agents. For more information, click here.
  • On October 3, the Consumer Bankers Association, the American Bankers Association, the Bank Policy Institute and the Clearing House expressed their collective disagreement with a report by Senator Elizabeth Warren (D-MA) regarding the prevalence of fraud on Zelle, the popular peer-to-peer (P2P) payment service. In the statement, the banking groups said, “Senator Warren’s report today fails to acknowledge that 99.9% of the 5 billion transactions processed on the Zelle network over the past 5 years were sent without any fraud or scam report. Zelle has gained popularity with banking customers because it is fast, free, and easy to use. Customers also take comfort in knowing that Zelle transactions are provided by and through their trusted bank. For more information, click here.
  • On September 30, the Federal Deposit Insurance Corporation (FDIC) released a list of administrative enforcement orders taken against banks and individuals in August 2022. For more information, click here.
  • On September 30, the US Treasury Department’s Office of Foreign Assets Control (OFAC) issued guidance titled Sanctions Compliance Guidelines for Instant Payments, which suggested that financial institutions implement risk-based approaches to manage sanction risks and, where possible, deploy innovative sanctions compliance technologies to eliminate such sanction risks. For more information, click here.
  • On September 30, OFAC reached a settlement with Tango Card, Inc., a distributor of gift cards, for $116,048.60 for potential civil liability arising from Tango’s alleged transmission of $27,720 gift cards (an economic benefit totaling $386,828) to individuals with IP addresses associated with Cuba, Iran, Syria, Ukraine and North Korea, which are sanctioned jurisdictions. For more information, click here.

State activities:

  • On October 4, New York Attorney General Letitia James provided $2 million to Erie County to strengthen consumer protection laws in Western New York. James obtained the funds as part of an action against several companies accused of engaging in predatory debt collection practices nationwide. A portion of the funds will be used to hire a full-time in-house attorney at the Erie County Consumer Protection Office. The county thanked James, saying he “will now be able to better investigate consumer complaints and improve [its] ability to educate [its] residents on predatory and illegal businesses. For more information, click here.
  • On October 3, Florida Attorney General Ashley Moody issued a consumer fraud alert to Florida residents regarding the potential for disaster scams, price gouging and fraud following Hurricane Ian. Moody’s warned residents that qualified contractors are generally in “high demand,” making room for out-of-state scam artists to prey on Floridians in need of expert services. Moody’s gave residents a list of tips for avoiding a scam, including, for example, researching the company’s reputation and making sure the company is bonded and verified with a bonding agency. Additionally, on October 5, Moody announcement it will send consumer protection investigators to parts of Florida to help protect vulnerable consumers. For more information, click here.
  • On October 1, changes to Maryland’s privacy law went into effect. Some of the changes include (1) expanding the scope of the law to include businesses that maintain personal information of Maryland residents, as opposed to only those that own or license that information; (2) require specific information that must be disclosed in a company’s notification to the Maryland Attorney General of a security breach; (3) shortening the time for a company that maintains personal information on behalf of a data owner to notify the owner of a security breach from 45 days to 10 days; and (4) expand the nature of information that will be considered protected genetic information under the law. For more information, click here.
  • On September 28, California Governor Gavin Newsom approved Senate Bill 786, which requires state vital statistics offices to allow the use of blockchain technology and verifiable credentials. . The change will allow Californians to receive PDF files of birth, death and marriage records immediately, as opposed to standard 10-day mail delivery. The senator responsible for introducing the bill, Senator Robert Hertzberg, argued that blockchain technology is a “faster, cheaper and more efficient method of delivery” for Californians, which is “more secure” because it “is almost impossible to hack”. For more information, click here.