Approximately one week after the Office of the Comptroller of the Currency (OCC) announced the creation of an Office of Innovation (covered previously in the Roundup), on November 3, Comptroller Curry discussed the OCC’s efforts to develop a framework for improving the OCC’s ability to identify and understand trends and innovations in the financial services industry and evolving consumer expectations. In doing so, Comptroller Currency quashed rumors of the potential creation of “safe spaces” or “sandboxes,” in which companies could pilot new products or services without the risk of penalty for violating laws, such as consumer protection laws. “I do not support this approach,” he said. “Waiving compliance with consumer protection or safety and soundness never makes sense, nor does our agency have the authority to waive compliance requirements. It is the company’s responsibility to ensure products and processes are safe before rolling them out” (emphasis original). Instead, Comptroller Curry encouraged companies to engage in “an open dialogue” with regulators toward the goal of designing responsible product tests. Additionally, Comptroller Curry stated that the OCC is still considering whether to grant national charters to Fintech companies and what conditions would be necessary to ensure that Fintech companies meet the same standards of safety, soundness and fairness as are applicable to other federally chartered institutions.
On November 3, the Securities and Exchange Commission (SEC) announced the agenda and panelists for its November 14 forum to discuss Fintech innovation in the financial services industry. The Fintech Forum, announced in September and reported in the October 5 edition of the Roundup, will be divided into four panels. Participants on the first panel will discuss the impact of recent innovation in investment advisory services. The second panel will discuss the impact of recent innovation on trading, settlements and clearance activities. Participants on the third panel will discuss the impact of recent innovation in capital formation. The final panel will discuss investor protection in the Fintech era. For members of the public interested in the Fintech Forum, but unable to attend in-person, a live webcast will be available through the SEC’s Fintech Spotlight page.
On November 3, the OCC announced that it will roll out a new Central Application Tracking System (CATS) to allow the banks it regulates to draft, submit and track licensing and public welfare investment applications on January 17, 2017. Available through BankNet, CATS will replace existing e-Corp and CD1 Invest application tools. The OCC will roll CATS out in three phases to facilitate the transition. Phase one, for frequent e-Corp and CD-1 Invest filers, will launch January 17, 2017. Phase two, for all other filers on the existing systems, will come in spring 2017. Phase three, for all other banks, will begin in late spring. While the OCC encourages the filing of applications through CATS, banks may continue to submit paper filings.
Enforcement & Litigation
On November 2, the New York Attorney General (AG) announced a $1.6 million settlement with a debt settlement company and its principal, resolving allegations that the company violated New York’s deceptive and unlawful practices law by engaging in fraudulent, deceptive and illegal business practices in connection with loan modification and audit services. View the full Enforcement Watch blog post.
On November 2, the Consumer Financial Protection Bureau (CFPB) and New York Attorney General (AG) announced the filing of a complaint in the United States District Court for the Western District of New York against participants in a purported New York-based nationwide debt collection scheme. View the full Enforcement Watch blog post.
On October 31, the United States District Court for the Western District of New York granted the Federal Trade Commission’s (FTC) motion for summary judgment against a group of debt collectors, finding that the debt collectors violated the Federal Trade Commission Act (FTCA) and Fair Debt Collection Practices Act (FDCPA). View the full Enforcement Watch blog post.
Goodwin has been recognized in 111 national and metropolitan practice areas in the 2017 “Best Law Firms” survey by U.S. News – Best Lawyers. Goodwin was ranked in 21 national Tier 1 categories and 49 metropolitan Tier 1 rankings. Additionally, the firm was named “Law Firm of the Year” for Biotechnology Law for the fourth time in the past five years. The U.S. News – Best Lawyers Best Law Firms rankings are based on client and lawyer evaluations, peer review from leading lawyers in their field, and review of additional information provided by law firms. View the complete list of rankings.
Join Goodwin and LendIt for this Marketplace Lending webinar featuring Goodwin partner Mike Whalen. Marketplace lending originations are projected to quadruple in the next four years, but regulatory and business considerations show that challenges still exist. This forum, based on a culmination of a series of industry alerts published by Goodwin, will provide actionable ideas on how online lending platforms and banks can partner in this innovative age. If you are a small business or consumer lender, this forum will help you better understand how partnerships can be structured to stabilize your business model. Banks of all sizes, commercial, community and regional, will learn how technological advances can help improve user experience and what processes can be outsourced or acquired. Register for this webinar.
Consumers purchasing products or services are often required to agree to assert claims only individually and only in arbitration. The Supreme Court has held that, as a general matter, these terms of sale are enforceable. The Consumer Financial Protection Bureau seeks to ban them with respect to financial services such as credit cards and loans. This panel will discuss the benefits and risks of regulating consumer arbitration. For more information, view the event website.
Directors, C-Suites, and General Counsel are increasingly focusing on compliance – a critical aspect to every business operation. Mistakes can seriously heighten corporate and personal liability. Goodwin partner Richard Strassberg joins Jason Brown, Chief Deputy Attorney General of New York State, Susan Schroeder, Senior Vice President, Deputy Chief, Enforcement Department of FINRA, and Jonny Frank, partner at StoneTurn Group. They will provide an overview of key national and state regulatory issues in financial services and other industry compliance.
Goodwin is hosting the 5th Annual Banking Symposium, a forum for CEOs and senior management of financial institutions to discuss critical and emerging issues in the industry. This year's theme, Unwinding the Road Ahead, will cover the aftermath of the 2016 presidential election and the effects of the new political landscape on financial institutions, the regulatory and compliance issues that are keeping you and your peers up at night, and how banks and Fintech partnerships are driving revenue and enhancing the bottom line. For event information and a list of speakers, please visit www.bankingsymposium.com.
This week’s Roundup contributors: Alex Callen.