Federal and state regulators risk stifling competition as they continue to develop a regulatory regime for fintech relationships with financial institutions, witnesses told a House subcommittee last week.

“We hope that Congress continues to monitor the regulatory agencies to assure that regulation or regulation through enforcement of these relationships and products doesn’t increase unnecessarily,” Steve Trager, executive chair of Republic Bank & Trust Company in Louisville, Ky.,… Continue Reading

On May 17, 2024, the Consumer Financial Protection Bureau (“CFPB”) filed suit against an online lending platform, alleging, among other things, the use of dark patterns to induce consumers to pay tips and donations, disclosure violations, and usury violations on loans offered through its lending platform. The complaint, filed in the U.S.… Continue Reading

In February 2024, the Federal Deposit Insurance Corporation (FDIC) entered into consent orders with two banks who partner with fintechs to offer “banking as a service” (BaaS) related to safety and soundness, compliance with applicable laws, and third party oversight.  BaaS refers to arrangements in which banks integrate their banking products and services into the services of non-bank third-party distributors and the distributors deliver the integrated banking services directly to the customer. … Continue Reading

On February 2, 2024, three Republican members of the House Financial Services Committee sent a letter to Federal Deposit Insurance Corporation (“FDIC”) Chair Martin Gruenberg expressing concern regarding what the congressmen perceive to be the FDIC’s attempts to reduce engagement with industry participants on financial technology and innovation. The letter was sent by the Committee Chairman, Patrick McHenry, the Chairman of the Financial Institutions and Monetary Policy Subcommittee, Andy Barr, and the Chairman of the Digital Assets, Financial Technology and Inclusion Subcommittee, French Hill.… Continue Reading

On January 22, 2024, the Federal Trade Commission (FTC) entered into a Stipulated Order for Permanent Injunction, Monetary Judgment, and Other Relief (the “Order”) with FloatMe Corp. (“FloatMe”), a fintech that offers short-term cash advances through its mobile app, to settle litigation brought earlier in the month against the fintech and two of its principals (collectively, “Defendants”).… Continue Reading

On January 2, the Federal Trade Commission (FTC) filed a complaint against FloatMe Corp. (“FloatMe”), a fintech that offers short-term cash advances through its mobile app, alleging violations of the FTC Act, the Restore Online Shoppers’ Confidence Act (ROSCA), and the Equal Credit Opportunity Act (ECOA). The complaint is similar in its language and allegations to one filed by the FTC against Bridge It, Inc.,… Continue Reading

In its Fall 2023 Semiannual Risk Perspective, published on December 7, the Office of the Comptroller of the Currency (“OCC”) reported on key issues facing the federal banking system.  In evaluating the overall soundness of the federal banking system, the OCC emphasized the need for banks to maintain prudent risk management practices. … Continue Reading

Tomorrow, the House Financial Services Committee’s Subcommittee on Digital Assets, Financial Technology and Inclusion will hold a hearing entitled “Fostering Financial Innovation: How Agencies Can Leverage Technology to Shape the Future of Financial Services.”  The witnesses will be:

  • Valerie A. Szczepanik, Director of the Strategic Hub for Innovation and Financial Technology (FinHub), Securities and Exchange Commission
  • Donna Murphy, Acting Deputy Comptroller for the Office of Financial Technology and Deputy Comptroller for Compliance Risk Policy, Office of the Comptroller of the Currency. 
Continue Reading

On November 30, 2023 at 12:30 PM, ET, Ballard Spahr will hold a webinar entitled “Recent Important Developments in Federal Preemption for National and State Banks: What They Mean for Bank and Nonbank Consumer Financial Services Providers” during which this case will be dissected.

In a lengthy (65-page) order, the California Superior Court in Los Angeles has issued an extremely important decision upholding the legitimacy of bank-model online lending by denying a motion for preliminary injunction filed by the California Department of Financial Protection and Innovation (DFPI) that sought to force fintech Opportunity Financial LLC (OppFi) to stop facilitating loans to California borrowers from its partner FinWise Bank at interest rates above the interest rate cap (generally 36% plus the Federal Funds Rate) imposed by the California Financing Law (CFL).… Continue Reading