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We are joined by Bret Ladine, the DFPI’s General Counsel.  We discuss the DFPI’s plans for adding new staff, promoting innovation through the new Financial Technology Innovation Office, providing guidance on CFPL exemptions, and handling complaints.  Other topics include the DFPI’s approach to its new authority regarding UDAAPs (which covers small business financing), registration of covered persons, and civil penalties.… Continue Reading

In this podcast, we are joined by Tom Vartanian, who leads the Financial Regulation & Technology Institute of George Mason University Antonin Scalia Law School, to discuss his proposal for the President and Congress to establish a National Financial Technology Commission.  The issues we examine include the security and other risks financial institutions face from new technologies such as artificial intelligence, the Commission’s role in protecting the nation’s economic infrastructure, and how regulators’ use of technology can result in a better regulatory scheme.… Continue Reading

In this podcast, we look at the opportunities for lenders to provide access to credit to “credit invisible” consumers through the use of AI underwriting tools.  We discuss these consumers’ characteristics, how AI can increase approval rates but not credit risk, risks of alternative data, the need for explainability of AI, and real world results from using AI.… Continue Reading

On July 15, the Democratic majority of the House Financial Services Committee introduced draft legislation, titled “Keep Big Tech Out Of Finance Act,” targeting Libra, Facebook’s contemplated new digital currency. As a follow up, during her July 17 opening statement before testimony from a Facebook executive, Chairwoman Maxine Waters expressed serious concerns about Libra and asked Facebook to put it on hold.… Continue Reading

The OCC’s Semiannual Risk Perspective report focuses on key issues that pose threats to bank safety and soundness and legal compliance.  Among such issues discussed in the Spring 2019 report, which generally reflects bank data as of December 31, 2018, are risks arising from financial innovation and new technologies.

One of the most significant issues discussed in the report involves artificial intelligence and alternative data, with the OCC highlighting the potential fair lending risks arising from these innovations. … Continue Reading

This Wednesday April 24th, the Federal Deposit Insurance Corporation and Duke University’s Fuqua School of Business and Innovation and Entrepreneurship Initiative will host a conference titled “Fintech and the Future of Banking” in Arlington, Virginia. The FDIC describes the catalyst for the event as the belief that “at the intersection of research and experience lies good public policy.”… Continue Reading

On April 2, 2019, the FDIC issued Financial Institution Letter FIL-19-2019 (the “Letter”) to remind financial institutions about certain contractual provisions and other requirements pertaining to technology service provider contracts. Apparently, during recent routine examinations, the FDIC found several technology service provider contracts that were inadequate under existing guidance. These contracts were missing or inadequately addressed key terms, such as:

  1. Requiring the service provider to maintain a business continuity plan,
  2. Establishing recovery standards,
  3. Specifying the institution’s remedies if the service provider misses a recovery standard,
  4. Requiring the service provider to respond to security incidents by, among other things, notifying the institution, and
  5. Defining key terms in the contracts relevant to business continuity and/or incident response.As
… Continue Reading

The Conference of State Bank Supervisors (CSBS) announced last week that it has agreed to implement 14 recommendations made by its Fintech Industry Advisory Panel (Advisory Panel).

The Advisory Panel was formed in 2017 to identify actionable steps for improving state licensing, regulation, and non-depository supervision and for supporting innovation in financial services. … Continue Reading

Ballard Spahr is proud to partner with Venminder, Inc., on this podcast posted today discussing third-party vendor risk management concerns of financial institutions and service providers. Hosted by Venminder’s Chief Risk Officer Branan Cooper, the podcast features Glen Trudel, a partner in Ballard Spahr’s Consumer Financial Services Group with extensive experience in this area.… Continue Reading

On May 7, 2018, in Arlington, Virginia, the FDIC will host a forum, “Use of Technology in the Business of Banking.”  Registration is required to attend.  The forum will also be webcast live and recorded for on-demand access after the event.

The FDIC’s notice states that panels at the forum  “will focus on emerging technologies that are transforming banking operations, the impact of emerging technologies on retail banking, including new and innovative delivery channels, enhanced customer experiences, economic inclusion; and consumer financial data access—balancing rights and security.”… Continue Reading