Covington Financial Services

Latest Articles

FinTech and blockchain technologies are rapidly developing. With the emergence of so many new ideas and technologies comes the need for action, to protect both current and future innovations. Given the pace at which technology continues to disrupt the industry, securing IP assets—especially patents—should be a primary consideration for companies in this space. As the FinTech landscape continues to evolve into areas such as artificial intelligence and machine learning, quantum computing, and big data, counsel…
On October 17, 2018, the Bureau of Consumer Financial Protection (“BCFP” or the “Bureau”) announced the release of its Fall 2018 semiannual update of its rulemaking agenda, which is included in the Unified Agenda of Federal Regulatory and Deregulatory Actions (the “Unified Agenda”), published by the Office of Information and Regulatory Affairs (“OIRA”). The BCFP’s updated rulemaking agenda is available on the OIRA web site. The agenda lists twelve rulemakings in the prerule, proposed…
For several years Swap Dealers registered with the Commodity Futures Trading Commission (“CFTC”) have been awaiting action by the Securities and Exchange Commission (“SEC”) related to security-based swap dealers.  While the wait is by no means over, on October 11, 2018 the SEC voted 4 to 1 to reopen the comment period for proposed rules on capital and margin requirements for security-based swap dealers and major security-based swap participants, and capital requirements for broker-dealers.  The…
On September 14, 2018, Superintendent of the New York State Department of Financial Services (“NYSDFS”) Maria T. Vullo filed a complaint in federal court against the U.S. Office of the Comptroller of the Currency (“OCC”) to block the OCC from issuing any special purpose national bank (“SPNB”) charters. The OCC announced last month, after much industry anticipation, that a nondepository financial technology (“fintech”) company that engages in a core banking activity, such as paying checks…
On August 29, 2018, the U.S. Senate confirmed Dawn Stump and Dan Berkovitz as Commissioners of the Commodity Futures Trading Commissioner (“CFTC” or “Commission”). Each has extensive experience in the derivatives markets. Ms. Stump, among other things, has served as Executive Director and Senior Vice President of U.S. Policy for the Futures Industry Association. Mr. Berkovitz, among other things, served as General Counsel of the CFTC from 2009-2013. Ms. Stump and Mr. Berkovitz were sworn…
On August 21, 2018, the Commodity Futures Trading Commission (“CFTC”) adopted rule amendments that modify the requirements for Chief Compliance Officers (“CCO”) of swap dealers (“SD”), major swap participants (“MSP”) and futures commission merchants (“FCM”).  SDs and FCMs should review these rules in detail in order to assess the changes they will have to make to their compliance program before the rule is effective. While the amendments do not disturb the CFTC’s substituted compliance determinations,…
Arizona recently became the first state in the U.S. to create a “regulatory sandbox” program to facilitate the development of innovative financial products and services. Such products would either incorporate new or emerging technology or reimagine uses of existing technology. The program would exempt participants from certain state financial regulations, but not federal requirements. On August 3, 2018, the Arizona sandbox went live and began accepting applications. The sandbox is the result of legislation signed…
On August 10, 2018, the Bureau of Consumer Financial Protection announced that a federal district court in the Western District of Missouri approved a consent order in a case against a set of twenty corporate entities and two individual principals (collectively, “Hydra Group”). The BCFP alleged violations of the Consumer Financial Protection Act of 2010 (“CFPA”), the Truth in Lending Act (“TILA”), the Electronic Fund Transfer Act (“EFTA”), and implementing regulations. According to the Bureau,…
In the wake of the #MeToo movement and broader conversations about sexual harassment and wage discrimination, many financial institutions are wondering whether any of these issues are affecting their organizations and, if so, how to address them.  To assess this question, financial institutions are increasingly turning to internal cultural reviews. These reviews, in which investigators assess workplace cultural trends, can be a potent tool for identifying, understanding, and correcting issues affecting women in the workplace. …