Fintech Flash

Fintech Flash is a series of client alerts published by Goodwin’s Fintech Practice that addresses various issues and developments impacting the Fintech industry.


June 13, 2022
Authors: Alexander J. Callen, Josh Burlingham

On June 9, 2022, the California Office of Administrative Law (OAL) approved the California Department of Financial Protection and Innovation’s (DFPI) final regulations requiring providers of commercial financing, including non-loan commercial financing, such as merchant cash advances and factoring transactions, to provide recipients with consumer-style “cost of credit” disclosures. The regulations are effective December 9, 2022. Read More


January 14, 2021
Authors: Paul S. Jin, Scott B. Joachim, Kara Kuritz, Matthew S. Wheatley
Visa abandoned its $5.3 billion acquisition of Plaid Inc., a fintech company known for its data aggregation technology, but which was developing a potential rival to Visa’s online debit services. The parties abandoned the transaction, which was announced in January 2020, in the midst of a challenge to the deal by the U.S. Department of Justice Antitrust Division (“DOJ”), which sued to block the transaction in early November 2020 based on the theory of nascent competition. Read More


January 5, 2021
Authors: Alexander J. Callen, Josh Burlingham
Recently, the Consumer Financial Protection Bureau (CFPB) issued an order accepting into the CFPB’s compliance assistance sandbox an earned wage access (EWA) program where participating employees are not obligated to repay the provider. The order affirms that the EWA program does not involve “credit” and therefore is not subject to the Truth in Lending Act and its implementing regulation, Regulation Z (together, Regulation Z). Read More

10 Key Takeaways From California's New Consumer Finance Regulatory And Enforcement Regime

November 19, 2020
Authors: Anthony AlexisLaura A. StollKimberly Monty HolzelLevi Swank

Three California laws that affect fintech companies will go into effect on January 1, 2021. The California Consumer Financial Protection Law (CCFPL) expands the scope of the Department of Business Oversight’s (DBO) current regulatory and enforcement powers, and renames it as the Department of Financial Protection and Innovation (DFPI). This Fintech Flash provides the key takeaways that fintech companies need to know about their “new” regulator and discusses how the three new California consumer finance laws may impact fintech companies. Read More

New York To Require Consumer Credit-Like Disclosures By Factors, Merchant Cash Advance Providers, And Certain Fintechs

July 27, 2020
Authors: Alexander Callen

New York’s legislature has passed a bill requiring providers of commercial financing, including non-loan commercial financing, to provide recipients with comprehensive consumer credit-like disclosures. In this Fintech Flash, we tackle the critical provisions that apply to factors, merchant cash advance providers, and certain Fintechs partnering with them. Read More

ILCs Are Back on the Table for Fintechs Seeking Banking Charters

May 7, 2020
Authors: William Stern and Alex Callen

An industrial bank or industrial loan company (each, an ILC) charter is an attractive option for a financial technology company (Fintech) seeking to enter the banking space, and it seems to be back on the table as a viable option for these companies. In March 2020, the FDIC approved two separate de novo deposit insurance applications for Utah-chartered ILCs submitted by Fintech companies Nelnet and Square, respectively, and issued a notice of proposed rulemaking that would require certain conditions and commitments for approval or non-objection to certain filings involving an ILC whose parent company is not subject to consolidated supervision by the Federal Reserve (Covered Parent Company). Read More

Fintech Flash: 10 Takeaways from COVID-19 Emergency Regulations

May 04, 2020
Authors: Kimberly Monty HolzelLaura A. StollDanielle ReyesMike Whalen and Samantha M. Kirby

Regulators are rapidly issuing a deluge of new orders, rules, and guidance to protect consumers who are struggling to make loan payments and access cash (“Emergency Regulations”) in response to the sudden financial impact of the COVID-19 pandemic. While laudable, the regulatory response evolves daily and without coordination among jurisdictions, creating an immense burden on banks and Fintech companies that are trying to keep up with changing demands. This Fintech Flash boils down the Emergency Regulations into key takeaways that banks and Fintech companies can use to plan a response that best serves their customers, while also protecting against litigation and regulatory risks. Read More

Gear Up To Help Your Customers Strategically Save

April 21, 2020
Authors: Kimberly Monty Holzel, Mike Whalen, Margaret B. Crockett, Matthew Dyckman, Danielle Reyes, Josh Burlingham, Alexander J. Callen, Carl Owens Jr., Jessica Rabinowitz, Nikhil Sethi

If deposit products are on your roadmap, now is a good time to start scoping them out. Develop institutional knowledge on deposits before approaching potential bank partners and use the checklist in this issue of Fintech Flash to help ready yourself. Read More

So, You Want to Be a Bank? Regulatory Process for Forming or Acquiring a Depository Institution - Part III

October 30, 2018
Authors: William Stern and Alex Callen

In this installment: The process for seeking regulatory approval to form or acquire a depository institution.

Our first installment addressed the reasons why a provider of non-bank financial services might want to operate through a depository institution, the types of charters available, and high level considerations relevant to choosing the right charter. Our second installment addressed some consequences of operating through a depository institution charter. Read More

So, You Want to Be a Bank? Consequences of Forming or Acquiring a Depository Institution - Part II

October 23, 2018
Authors: William Stern and Alex Callen

This installment describes the consequences of operating through a depository institution charter, including capital requirements, supervision and examination by bank regulatory authorities and potential limitations imposed on controlling shareholders and investors. Read More

So, You Want to Be a Bank? Benefits of Operating Through a Bank Charter and Charter Choice Considerations

October 11, 2018
Authors: William Stern and Alex Callen

Like last year, 2018 is shaping up to be a busy year for de novo bank charters, with signs suggesting that we will continue to see strong interest in bank formation. The Federal Deposit Insurance Corporation (FDIC) has already approved seven applications for deposit insurance for de novo institutions through September, and it approved eight during 2017, which was the most since 2010. While many bank chartering proposals are likely to originate from groups proposing to conduct a traditional community banking business, the last few years have seen increasing interest among nonbank financial services providers, including technology enabled firms engaged in payments, crypto currency and lending businesses, in exploring whether to operate through a depository institution charter. Read More

New California Law Requires Consumer Credit-Like Disclosures By Factors And Merchant Cash Advance Providers

October 4, 2018
Authors: Alex Callen and Mike Whalen

Is this the beginning of the end for the substantial compliance freedoms enjoyed by factors and merchant cash advance (MCA) providers? A new California law, SB 1235, foists consumer cost of credit-like disclosures onto a largely unregulated sector of the financial industry. In this Fintech Flash, we’ll tell you everything you need to know about it. Read More

Factoring and MCAs to Be Covered by the California Finance Lenders Law?

March 13, 2018
Author: Mike Whalen

There’s a compliance totem pole in financing. Consumer lending is at the top as most highly regulated and business lending is near the bottom. There are ordered slots in each spot along the pole. Read More

Virtual Currency, The New Loan Security

March 1, 2018
Author: Mike Whalen

The most frequently asked security question around virtual currency has shifted from “Is it secure?” to “Can it be used as security?” Yes, it can, and we’re seeing break-through lenders making loans to ICO platforms and others flush in virtual currency, but shy on cash, using their virtual currency as security on the loan. Read More

Insurance for Cryptocurrencies: Tips for Maximizing Coverage

January 16, 2018
Author: Brian Mukherjee

There is general consensus that 2017 was a banner year for cryptocurrencies. According to CNBC, initial coin offerings (ICOs) in 2017 raised approximately $3.7 billion for issuing companies. And despite some recent weakness in high-profile cryptocurrencies like bitcoin, we expect an increasing number of ICOs from an ever-expanding scope of industries. Read More

New York Bank Regulator Seconds Challenge to OCC Fintech Bank Charter

May 25, 2017
Author: Mike Whalen

Trailing the Conference of State Bank Supervisors (CSBS) April lawsuit opposing the Office of the Comptroller of the Currency’s (OCC) Fintech national bank charter, the New York Department of Financial Services (DFS) filed its own suit on May 12 challenging the OCC’s decision to grant bank charters to financial technology companies engaged in lending and payments-related activities. Read More

New York Looks to Further Regulate Fintech Lenders

February 13, 2017
Author: Mike Whalen

Tucked away in the Transportation, Economic Development and Environmental Conservation Bill portion of the New York State 2018 Executive Budget is a proposed amendment to New York’s Licensed Lender Law that would “[a]llow the Department of Financial Services . . . to better regulate the business practices of online lenders." Read More

Living in the Regulatory World – What Happens, What Do I Do?

October 26, 2016
Author: Mike Whalen

As Fintech companies move more and more into consumer financial services products, they move deeper and deeper into areas that are traditionally highly regulated. Even when they are providing services to a financial institution, they can face such regulatory scrutiny. This Fintech Flash looks at what type of regulators and scrutiny Fintech companies can face, what regulatory interactions can be like, and what Fintech companies can do to prepare for regulatory examinations. Read More

Bank Partnership Agreements

September 20, 2016
Author: William Stern

Prior Fintech Flash installments have addressed the pros and cons of marketplace lending companies entering into bank partnerships as well considerations relevant for determining whether a marketplace lending platform or its bank partner is the “true lender.” If a marketplace lending platform decides that it makes sense to enter into an arrangement with a bank partner, then it will need to negotiate and enter into a contractual agreement with its bank partner that satisfies applicable legal and regulatory requirements, establishes a structure for the arrangement intended to result in the bank partner being viewed as the “true lender,” and addresses other legal and business considerations. Read More

Marketplace Lending Bank Partner as True Lender

September 6, 2016
Author: Mike Whalen

The most significant challenges faced by online marketplace lending platforms with bank partners center on the bank being correctly viewed as the “true lender.” Courts and regulators look to the substance, not the form, of the arrangement. The bank must be established as the lender in fact, ensuring the bank maintains the level of activity, authority over the loan program, and economic interest in the loans that one reasonably would expect of a lender. Forming a bank partnership requires deliberate consideration and expertise because true lender standards vary by regulator and jurisdiction and are fact-specific. In this issue of Fintech Flash, we cover the building blocks of true lender analysis. Read More

Bank Partnership or Go It Alone?

August 23, 2016
Author: Mike Whalen

Bank partnerships in online marketplace lending are getting a lot of attention. There is pent up demand for these arrangements, with banks operating in this space experiencing increased inquiries from Fintech startups with lending ideas. Seeing these opportunities, other banks are considering becoming Fintech partners. All of this interest has translated into some regulators and enforcement agencies taking a critical look at how bank partnerships operate. In this first issue of Fintech Flash, we cover the pros and cons of marketplace lending platform companies entering into bank partnerships or obtaining their own state lender licenses. Read More