The US Department of Labor (“DOL”) recently submitted its final fiduciary rule to the Office of Management and Budget (“OMB”) for clearance, one of the last steps required to implement the controversial proposal. Under the proposed rule, financial advisers of retirement accounts would owe investors a fiduciary duty and must put their clients’ best interest … Continue Reading
On January 11, 2016, the SEC published its Office of Compliance Inspections and Examinations’ (“OCIE”) 2016 exam priorities. The exam priorities address issues involving a variety of financial institutions, including investment advisers, broker-dealers, transfer agents and clearing agencies. OCIE selected its priorities after discussions with the SEC’s Commissioners, the SEC’s policy divisions and regional offices, … Continue Reading
On December 4, 2015, President Obama signed HR 22 into law (now Public Law 114-94). Although HR 22’s official name is Fixing America’s Surface Transportation Act (“FAST Act”), the 490-page law contains some provisions of particular importance to banks and other financial institutions, including providing an exception to the annual privacy notice requirement under the … Continue Reading
On October 27, 2015, the US Department of Education issued final regulations regarding certain banking relationships between banks and college students. The regulations are effective July 1, 2016, with compliance dates for various sections stretching out to 2017. These rules add yet another regulator to the plethora of US and state government agencies regulating banks. … Continue Reading
On October 7, 2015, the US Consumer Financial Protection Bureau (“CFPB”) announced a proposal to prohibit financial services companies from using certain types of arbitration clauses in consumer contracts. The CFPB has proposed prohibiting financial services companies from using arbitration clauses to prevent consumer class action proceedings in court, but would continue to permit arbitration in … Continue Reading
On September 22, 2015, the New York State Department of Financial Services (“NY DFS”) announced that it had issued the first BitLicense under its recently finalized virtual currency rules. Boston-based Circle Internet Financial announced that it will be able to use the BitLicense to offer mobile payment services involving bitcoins, in addition to US dollars. … Continue Reading
On August 10, 2015, the Federal Reserve Board issued a clarification on its reasoning for including “transaction monitoring costs” in the debit card interchange fee standard rather than the separate fraud prevention adjustment. This clarification was issued at the direction of the US Court of Appeals for the District of Columbia which included the requirement … Continue Reading
Noting the boom in online lending platforms, on July 20, 2015, the US Treasury Department published a “Request for Information” (RFI) seeking comments on the services, products and operational structure of online marketplace lending, which the RFI defined as small business and consumer lending through the use of “investment capital and data-driven online platforms.” The … Continue Reading
On July 10, 2015, the Federal Communications Commission (FCC) released a 105 page omnibus declaratory ruling and order (“Order”) under the Telephone Consumer Protection Act (“TCPA”) that, among other things, permits banks and other financial institutions to call consumers on their wireless telephones using autodialer equipment and pre-recorded messages (“robocalls”) and also send texts without … Continue Reading
On April 14th, the US Department of Labor (“DOL”) issued a release requesting comment on a proposed rule designed to mitigate the effects of conflicts of interest by advisers to IRA and 401(k) accounts — the principal types of US self-directed retirement plans. The comment period for the proposal ends on July 6, 2015, and … Continue Reading
The US Consumer Financial Protection Bureau (CFPB), the US federal consumer finance agency, is considering proposing regulations to govern certain types of short-term loans to better protect consumers from falling into an ever-increasing, seemingly never-ending, cycle of debt. The proposals under consideration would cover short-term credit with payment in full due within 45 days. These … Continue Reading
On February 23, 2015, the White House announced that President Obama has directed the Department of Labor (DOL) to move forward with proposed rulemaking to require advisers, including broker-dealers, that provide advice regarding retirement plans that are subject to the Employee Retirement Income Security Act (ERISA), including Individual Retirement Accounts (IRAs), to observe a fiduciary … Continue Reading
On January 13, 2015, the US Supreme Court resolved a split among the Courts of Appeal on interpreting how a borrower may give notice to a lender of the borrower’s right to rescind a home mortgage. The Supreme Court ruled that a notification may be made in writing to the lender, without a need to … Continue Reading
On January 13, 2015, the Office of Compliance Inspections and Examinations (OCIE) of the Securities and Exchange Commission (SEC) announced its 2015 examination priorities. OCIE’s priorities are grouped in three primary categories: 1. Retail investors and savings for retirement Fee selection and reverse churning. For investment advisers and firms registered as both broker-dealers and investment … Continue Reading
On January 13, 2015, the Office of Compliance Inspections and Examinations (OCIE) of the Securities and Exchange Commission (SEC) announced its 2015 examination priorities: OCIE’s priorities are grouped in three primary categories: 1. Retail investors and savings for retirement Fee selection and reverse churning. For investment advisers and firms registered as both broker-dealers and investment … Continue Reading
The Financial Industry Regulatory Authority (“FINRA”) released its annual regulatory and exam priorities letter for 2015 (the “Letter”). As it has done for the past ten years, FINRA outlined the areas in which its examiners will pay particular attention with respect to its inspections this year. The Letter notes challenges that FINRA has observed in … Continue Reading
On October 28, 2014, the Consumer Financial Protection Bureau (CFPB) published in the Federal Register its final rule allowing some banks and other financial institutions an alternative way to provide the annual privacy notices that they are required to provide customers by posting the notice on its website. This final rule was effective immediately upon … Continue Reading
The US federal banking agencies are seeking comments from the public on proposed revisions to their guidance on banks’ important obligations to address the credit needs of their low and moderate income customers. The Community Reinvestment Act (CRA) requires banks to address the credit needs of low and moderate income customers in their service areas. … Continue Reading
The FINRA Board of Governors (the “Board”) met last week to discuss a number of upcoming rule proposals and initiatives, many which focus on high-frequency trading and market transparency. FINRA Chairman and CEO Rick Ketchum stated that he believes these proposals address Securities and Exchange Commission (“SEC”) Chair Mary Jo White’s call to action for … Continue Reading
On July 23, 2014, the SEC adopted far-reaching amendments to the regulation of U.S. money market funds. See Securities Act Release No. 33-9616. The purpose of these reforms is stated to be: to address money market funds’ susceptibility to heavy redemptions in times of stress, improve their ability to manage and mitigate potential contagion from such … Continue Reading
The Securities and Exchange Commission (“SEC”) approved Financial Industry Regulatory Authority (“FINRA”) Rule 2081. This rule prohibits a broker from conditioning the settlement of a customer dispute on, or otherwise compensating the customer for, the customer’s consent not to oppose the expungement of customer dispute information from the Central Registration Depository (the “CRD”). These agreements … Continue Reading
The Securities and Exchange Commission (“SEC”) has proposed to extend temporary Rule 206(3)-3T under the Investment Advisers Act of 1940 (the “Advisers Act”) from December 31, 2014 until December 31, 2016. Rule 206(3)-3T establishes an alternative means for registered investment advisers that are also registered as broker-dealers (“Dual Registrants”) to meet the requirements of Section … Continue Reading
If a US consumer makes a purchase at a local store and wants to use her debit card, but there are not enough funds in the account to pay for the purchase, the bank can decline the transaction, or allow the customer, for a fee, to be extended credit in order to avoid an overdraft, … Continue Reading
In July, the Trading Examinations Unit within the Trading and Financial Compliance Examinations group at the Financial Industry Regulatory Authority (FINRA), the principal US securities industry self-regulatory organization, published a targeted examination letter being sent to some FINRA member firms as part of a review of processes and procedures in connection with order routing and … Continue Reading
