Weekly RoundUp March 07, 2018

Financial Services Weekly News

Editor's Note

In This Issue. The Consumer Financial Protection Bureau (CFPB) issued a request for information regarding the consumer complaint reporting process, marking the sixth request in a series of RFIs; the House of Representatives passed a bill to reduce the capital requirements for financial institutions; and Nasdaq proposed to amend its stockholder approval rule for private placements. These and other recent developments are covered below.

Editor's Note
Editor's Note
Editor's Note

Regulatory Developments

CFPB Seeks Feedback on Consumer Complaint Reporting

The CFPB has issued a request for information seeking feedback on consumer complaint reporting. This is the sixth request in an ongoing series of RFIs designed to provide the CFPB with input on how it is fulfilling its statutory obligations and how to improve outcomes for both consumers and covered entities. The public is invited to submit comments on the usefulness of complaint reporting and analysis to external stakeholders, including financial institutions and consumers. Additionally, the CFPB is seeking suggestions or best practices for complaint reporting and publication given the CFPB’s statutory objectives and authorities. The CFPB is seeking feedback specifically on the content of its complaint reporting, reporting methodologies used and publication process.

House Passes Bill to Lessen Financial Institutions’ Capital Requirements

On February 27, the U.S. House of Representatives passed H.R. 4296, which would reduce the operational capital requirements imposed on financial institutions. The bill passed with a 245-169 vote. As could be expected from such deregulatory legislation, only 19 Democrats voted in favor of the bill and only 3 Republicans voted against it. Specifically, the legislation tightens the circumstances under which federal banking agencies can establish operational risk capital requirements for banking organizations. View the LenderLaw Watch blog post.

Client Alert: Nasdaq Proposes to Amend Stockholder Approval Rule for Private Placements

Nasdaq has proposed to amend Rule 5635(d), which generally requires shareholder approval before Nasdaq-listed companies issue common stock equal to 20% or more of outstanding shares or voting power in transactions (other than a public offering) if the issuance takes place at a price less than the greater of the book value or market value of the stock. If adopted, Rule 5635(d) as amended would redefine market value and eliminate the book value test. For more information, read the client alert issued by Goodwin’s Public Companies practice.

Fintech Flash: Virtual Currency, the New Loan Security

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 are 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. It makes sense to leverage virtual currency in this way, particularly if the borrower is having challenges exchanging virtual currency for fiat, believes that gains in virtual currency will outpace interest paid on the loan, or tax consequences make selling its virtual currency not a good option. For more information, read the Fintech Flash issued by Goodwin’s Fintech practice.

Client Alert: Massachusetts AG Issues Guidance on the Amended Massachusetts Equal Pay Act: Overview, Key Takeaways and Action Items

The Massachusetts Attorney General recently issued guidance concerning amendments to the Massachusetts Equal Pay Act, which will take effect on July 1, 2018. Employers of Massachusetts employees should prepare for the significant upcoming changes by reviewing hiring practices, modifying employment policies and other employment-related documents and undertaking self-evaluations of their pay practices. For more information, read the client alert issued by Goodwin’s Labor + Employment practice. 

Goodwin News

Fintech Sandbox: Fintech, Regulation and the Law

Partner Mike Whalen discusses Goodwin’s expertise in every area of Fintech, including alternative lending, payments, digital currency and blockchain technology, wealth management, insurance, and bank partnerships and charters. Read the full Fintech Sandbox discussion.

Token Fest – March 15-16

Token Fest is an exclusive, two-day networking event focused on the business and technology of tokenization. Attendees will gain a wealth of insights and information about the state of the token-based economy while networking with over 700 senior level thought leaders. Token Fest brings together business professionals from blockchain-based enterprises including CEOs, end users, entrepreneurs, venture capitalists, investors, regulators, attorneys and developers to network and collaborate on relevant industry topics. Goodwin is a platinum sponsor of the event. For more information, please visit the event website.

5K Good Run in Conjunction With 2018 ICI Mutual Funds & Investment Management Conference – March 19

Goodwin’s Investment Management practice is hosting its 10th Annual Good Run in conjunction with ICI’s 2018 Mutual Funds & Investment Management Conference. In recognition of the participants, Goodwin will make a donation to Expect Miracles, a leading advocate in the fight against cancer within the financial services industry.

This week’s Roundup contributor: Courtney Hayden.