Bank Law Monitor

A Legal Blog for the Financial Services Industry

It can be hard for regulatory agencies to admit when they’ve made a mistake. But that’s exactly what FinCEN did last week when it announced that certain loan renewals and modifications[1] would not trigger its beneficial ownership due diligence rule (the “Rule”), reversing its earlier guidance on the subject. FinCEN’s change of heart is welcome relief for the industry, which decried FinCEN’s earlier position as failing to meaningfully advance any law enforcement goals while…
Since the Great Recession, the regulation of residential mortgages and those who service them have been in sharp focus. Legislators and regulators continue to demonstrate an abiding mistrust in the servicing industry a full decade after the financial collapse—imposing and then tinkering with a regulatory scheme that is challenging for most people (and most lawyers, for that matter!) to fully comprehend. In Washington alone, the regulations governing Washington’s Consumer Loan Act (CLA) have already been…
Traditional banks and lenders may soon see some increased competition from actors in the financial technology industry. As we previously discussed, the Office of the Comptroller of the Currency (OCC) has led the regulatory charge by inviting so-called “fintech” companies to apply for special purpose national bank charters. Soon after this invitation was extended in 2016, the Conference of State Bank Supervisors (consisting of state banking regulators) filed a lawsuit in 2017 hoping to…
By Danielle Hunt, Kalin Bornemann, Olivia Grabacki, and Jessica Roberts As we previously discussed, financial institutions that offer financial services to the cannabis industry have been operating in a state of uncertainty in the wake of the rescission of the so-called “Cole Memo” earlier this year. Without the comfort of the Cole Memo, those financial institutions nevertheless continued to operate under a set of guidelines previously published by the Financial Crimes Enforcement Network (FinCEN). As…
In the wake of the shift in federal marijuana enforcement policy, financial institutions have been left to speculate the risk in offering financial services to marijuana-related businesses. While the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued guidance in 2014 that laid out a process for financial institutions to open accounts for marijuana-related businesses, that guidance was premised on the enforcement priorities of the Cole Memo. After last month’s rescission of the Cole Memo,…
Reiterating that Congress considers marijuana to be a “dangerous drug” and marijuana activity to be a “serious crime,” Attorney General Jeff Sessions today issued a memo to all U.S. attorneys rescinding various memoranda related to enforcement of federal marijuana laws issued during the Obama administration. Included in the rescinded memos was the prominent “Cole Memo,” which discouraged federal prosecution of anyone in compliance with the marijuana laws of their state. As we previously discussed,…
Regulation CC first became law back in 1992. Yes, that was when Sir Mix-a-Lot was “back” on the top of the charts, audiences were eating up Silence of the Lambs, and bowl cuts were a thing. Times have changed, but oddly Reg CC hasn’t. Since 1992, Reg CC—which governs funds availability and how financial institutions handle check collection and return processes—has stayed mostly the same. But think about how much banking has evolved over the…
Update (August 28, 2017): A lot has happened since our original post on the CFPB’s arbitration rule, and more is on the way. The CFPB’s arbitration rule is definitely alive and breathing, for the time being: The CFPB published its long-awaited arbitration rule on July 19, which, as discussed in more depth below, regulates arbitration agreements in contracts for certain consumer financial products or services (such as contracts involving deposit and savings accounts, credit cards, student…
The ATM celebrated its golden birthday yesterday. The first one opened on June 27, 1967, at a Barclay’s branch in London, and it’s since become a cornerstone of modern retail banking. Fifty years later, the ATM isn’t the only way that consumers “withdraw” cash from their banks and credit unions. In the United States, plaintiffs’ consumer lawsuits cost the financial services industry billions of dollars each year. And the Telephone Consumer Protection Act is fast…
It turns out that even lawyers sometimes have to pay their debts. In a recent Washington appellate case, a bank successfully sued an attorney to recover on a loan made to his law firm. Typically the owner of a law firm wouldn’t be held responsible for the corporate debts of a firm (except under a separate personal guaranty). But after the firm ceased operations, the lawyer continued to operate the firm in a manner…