Weekly RoundUp
January 20, 2022

Acting Comptroller Discusses Crypto-Assets and Regulation

In This Weekly Roundup Issue. Acting Comptroller of the Currency Michael J. Hsu discussed the importance of regulation in the crypto space; and the Office of the Comptroller of the Currency (OCC) and the Consumer Financial Protection Bureau (CFPB) announced the annual adjustments for civil penalty amounts. These and other developments are discussed in detail below.

Regulatory Developments

Acting Comptroller Discusses Crypto-Assets and Regulation

On January 13, 2022, Acting Comptroller of the Currency Michael J. Hsu encouraged regulation for stablecoin issuers, similar to banks, at the BritishAmerican Business Transatlantic Finance Forum 2021-2022 Executive Roundtable.

Comptroller Hsu noted the importance of stablecoins in the crypto-ecosystem, linking cryptocurrency value to traditional forms of currency. Currently, he stated, there are no standardized mechanisms for backing these assets, comparing the current stablecoin space to the United States’ pre-Civil War banking environment. He expressed concern that a lack of regulation could lead to a “run” in the crypto space if enough users lose the confidence that their digital holdings will be fully redeemed.

Comptroller Hsu addressed concerns that regulations would stifle innovation, noting that “solid foundations” can create trust among users while providing a stable environment for innovation. “Stablecoin issuers subject to bank regulation would give holders of those stablecoins confidence that those coins were as reliable and ‘money good’ as bank deposits.”

OCC and CFPB Adjusts Civil Penalty Amounts for 2022

On January 12, the OCC published a notice adjusting the maximum amount of each civil money penalty (CMP) within its jurisdiction. This revision does not affect the OCC’s discretion to assess a CMP in an amount lower than the maximum allowed. The adjusted maximum penalties became effective as of January 12, 2022, for violations occurring on or after November 2, 2015.

On January 14, the CFPB announced the annual adjustments for inflation to the maximum amount of each civil penalty within the CFPB’s jurisdiction to maintain the deterrent effect of civil penalties and to promote compliance with the law. These adjustments were calculated, pursuant to the Inflation Adjustment Act and Office of Management and Budget guidance, by multiplying each civil penalty amount by the “cost-of-living adjustment” multiplier, rounded to the nearest dollar. The new penalty amounts became effective on January 15, 2022.

“This mainstreaming of crypto has occurred despite regulatory and legal uncertainty, and a series of scams, hacks, and other disruptive events. For financial regulators like me, this presents a host of questions.” 
– Acting Comptroller Michael J. Hsu

Goodwin News

Announcing Goodwin’s Public Company Advisory Blog

Public companies are subject to constantly evolving regulations and laws, and everchanging shareholder and stakeholder demands. These companies and their boards of directors need a “go-to” resource to stay ahead of corporate governance and capital markets issues. We are pleased to announce our new blog that will drill down on these topics and more.

Goodwin’s Public Company Advisory Blog provides updates and critical analyses on issues that are most relevant to public companies and capital markets participants. Issues are framed in an easy-to-digest manner, providing insight gained from our experience serving on the Staff of the Securities and Exchange Commission and FINRA, and advising clients in a variety of regulatory, corporate and litigation matters.

Subscribe to follow along every Tuesday as we deliver our take on the most critical issues affecting public companies, their boards of directors, and other capital markets participants.

Check Out Goodwin’s Latest Industry Insights

FinReg + Policy Watch Blog
Stay on top of developments affecting the financial services community.

LenderLaw Watch Blog
Stay on top of news and legal issues in the consumer finance industry.

Consumer Finance Enforcement Watch Blog
Stay on top of enforcement actions, trends and issues.

Digital Currency + Blockchain Perspectives Blog
Stay on top of digital currency industry news, regulatory developments and issues.

Nicole Griffin
Samantha M. Kirby
William McCurdy

Josh Burlingham
Nico Ramos