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Published Article

FinTech Regulation: How True Lender, Valid-When-Made, and the Fight About Usury Impact FinTech Business Models

Read Time: 1 min

The laws governing financial technology (FinTech) services companies have continued to develop. One prominent business model utilized by FinTech companies involves partnerships with traditional depository institutions, often state-chartered, FDIC-insured community banks. In the context of this model, the non-depository FinTech companies and traditional depository institutions act together to offer consumer financial services and products. However, the regulatory response to these partnerships has varied over the years and the change in administration at the national level may have far-reaching consequences for these programs.

Robert Savoie (Cleveland) and Jaline Fenwick (Jacksonville) co-authored an article on these programs, recent regulation, and how it all impacts FinTech business models in the ABA Business Law Section’s The Business Lawyer, Volume 77, Issue 2, Spring 2022.

Read the full article here.

Insights

Published Article

True Lender and Rate Exportation: Reviewing the Major 2023 Legislation

April 5, 2024

In recent years, several state legislatures have enacted consumer credit laws designed to regulate FinTech companies operating through partnerships with depository institutions, or more generally to limit the interest rates charged by those depository institutions.

Alert

SVB and Signature Bank Crashes: Regulations to Come?

March 21, 2023

The recent collapse of two large regional banks, and the expedited sale of Credit Suisse due to similar challenges, have left many in the financial services industry uncertain about the future. What should we understand about what happened and what it might mean for the future of finance?

Alert

OCC Advises “Careful and Cautious” Approach to FinTech-Bank Partnerships

October 3, 2022

On Wednesday September 7, 2022, acting Comptroller of the Currency Michael J. Hsu gave remarks in New York City at the Clearing House + Bank Policy Institute Annual Conference. Hsu’s remarks were focused on measures the OCC is taking to build stronger trust among consumers in the banking system.

Presentation

Current State of Regulatory Network Supervision

June 22, 2022

Amy Greenwood-Field (Washington, DC) is speaking on a panel on "Current State of Regulatory Network Supervision" at the CrossTech Compliance Conference in Miami, Florida on Wednesday, June 22, 2022. This panel will broadly analyze the current state of network affairs and what the future envisions.

Published Article

17 State Attorneys General Express Concerns with the CFPB’s “Junk Fees” RFI

May 6, 2022

On January 26, 2022, the Consumer Financial Protection Bureau (CFPB) issued a Request for Information Regarding Fees Imposed by Providers of Consumer Financial Products or Services (“RFI”). The CFPB indicated its desire to mitigate charges like credit card late fees and overdraft and non-sufficient funds fees, which it said accounted for billions of dollars in 2019. The CFPB stated that its goal is to “strengthen competition in consumer finance by using its authorities to reduce these kinds of junk fees.”

Alert

No More Cap on Holder’s Liability: A New FTC Perspective on the Holder Rule

January 27, 2022

On January 18, 2022, the FTC issued an advisory opinion to clarify that the FTC’s Trade Regulation Rule Concerning Preservation of Consumers’ Claims and Defenses, 16 C.F.R. § 433.2, does not preclude the recovery of attorneys’ fees and costs when state law authorizes such awards against a holder of a consumer credit contract.

Alert

U.S. House of Representatives Votes to Override OCC True Lender Rule

June 25, 2021

The U.S. House of Representatives on June 24th voted 218 to 208 to repeal the OCC “True Lender” rule under the CRA. As discussed in earlier alerts, the OCC published the rule last year to eliminate challenges regarding when a loan is actually made by a federally-chartered bank, instead of a non-bank partner that takes assignment of the loan shortly after origination.

Alert

True Lender Update: States vs. OCC; No FDIC Rule; Possible State True Lender Rules?

January 15, 2021

For national banks, the OCC’s true lender rule became effective on December 29, 2020. However, as expected, the Attorneys General of New York, California, Colorado, the District of Columbia, Massachusetts, Minnesota, New Jersey, and North Carolina (the States) filed a federal lawsuit in New York shortly after the new year alleging that the OCC’s True Lender rule is invalid.