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Financial Services Law Insights and Observations


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  • Special Alert: Congress releases draft privacy bill

    Federal Issues

    A comprehensive federal privacy law drew one step closer to reality earlier this month when a bipartisan group of representatives and senators released a draft of the proposed American Data Privacy and Protection Act.

    Passage of the ADPPA, which combines elements of prior proposals in an effort to reach a legislative compromise, is still far from assured. But it represents a meaningful starting point for further discussions, and is already shaping the long-running debate on national privacy standards. This alert looks closely at the proposed statutory text that seeks to define the breadth and scope of a federal privacy regime that policymakers have contemplated for years.

    Greater clarity about bill text and its overall prospects for passage are likely to emerge at the House Energy and Commerce Committee’s hearing scheduled for tomorrow at 10:30 a.m. ET.

    Federal Issues Federal Legislation Privacy/Cyber Risk & Data Security Special Alerts House Energy and Commerce Committee FTC Consumer Protection American Data Privacy and Protection Act

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  • House Energy and Commerce Subcommittee Examines Consumer Data Security

    Federal Issues

    On November 1, the House Subcommittee on Digital Commerce and Consumer Protection (Subcommittee) held a hearing entitled “Securing Consumers’ Credit Data in the Age of Digital Commerce” to examine: (i) the legal and regulatory framework for consumer reporting agencies, including the Gramm-Leach-Bliley Act and Fair Credit Reporting Act; (ii) current cybersecurity standards, best practices, threats, and vulnerabilities; and (iii) how data breaches relate to incidences of identity theft and fraud. In introductory remarks, Subcommittee Chairman, Bob Latta (R-Ohio), acknowledged the need to understand ways to protect against data breaches and secure consumer data. This sentiment was echoed by Full Committee Chairman, Greg Walden (R-Or.), who noted in his opening statement that recent data breaches “demonstrate the challenges of protecting consumer information in the digital age.” The full list of witnesses, testimony, and committee background memo is available here.

    Federal Issues Privacy/Cyber Risk & Data Security House Energy and Commerce Committee Data Breach

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  • House Subcommittee on Digital Commerce and Consumer Protection Holds Hearing to Discuss Consumer Fintech Needs

    Federal Issues

    On June 8, the House Energy and Commerce Committee’s Subcommittee on Digital Commerce and Consumer Protection held a hearing to discuss financial products and services offered by the fintech industry to meet consumer needs. (See previous InfoBytes coverage here.) Committee Chairman Rep. Bob Latta (R-Ohio) opened the hearing asserting, “There are serious opportunities for companies to reach consumers with new products to help them create a rainy-day fund for the first time, pay their mortgage securely, rebuild their credit, budget and manage multiple income streams, and invest their earnings . . . Cybersecurity [specifically] is an ongoing challenge, and one the Energy and Commerce Committee is tackling head on.” The June 8 hearing included testimony and recommendations from the following witnesses:

    • Ms. Jeanne Hogarth, Vice President at Center for Financial Services Innovation (CFSI) (statement). Hogarth stated that nearly three out of five American face financial health struggles and spoke about challenges fintech entrepreneurs may face when trying to help consumers, such as (i) “facilitat[ing] interstate and regulatory comity that enables consumers to access and use fintech products and service that promote financial health”; (ii) “support[ing] consumers’ access to their own data”; and (iii) “creat[ing] opportunities for pilot testing of both financial products and services and financial services regulations.” Hogath also detailed CFSI’s Financial Solutions Lab, which identifies financial health challenges faced by consumers and encourages companies to develop ways to address these issues.
    • Mr. Javier Saade, Managing Director at Fenway Summer Ventures (statement). Saade—whose venture capital firm backs emerging fintech companies—stressed the importance of understanding and mitigating associated risks as financial innovation continues to expand. Growth is supported and encouraged, he noted, provided entrepreneurs understand that the “’fail fast and often’ approach, typical of tech-driven startups in other sectors, may not be well suited for the financial services industry.” Furthermore, Saade stated that because “nearly 30 million U.S. households either have no access to financial products or obtain products outside of the banking system . . . even modest strides in achieving economic inclusion present the single largest addressable opportunity in fintech.”
    • Ms. Christina Tetreault, Staff Attorney at Consumer Union (statement). Tetreault, speaking on behalf of Consumer Union (the policy division of Consumer Reports), stated that while financial technology such as virtual currencies, digital cash, and distributed ledgers have the “potential to increase consumer access to safe financial products and return a measure of control to consumers,” safeguards devised between lawmakers and providers must be implemented with appropriate federal and state financial regulator oversight.
    • Mr. Peter Van Valkenburgh, Research Director at Coin Center (statement). Coin Center is a non-profit organization, which focuses on “public policy ramifications of digital currencies and open blockchain networks.” Van Valkenburgh emphasized the need for Congress to (i) create a nationwide federal money transmission license as an alternative to “state by state licensing,” which, in his opinion, emphasizes the needs of individual states rather than addressing the health and risk profile as a whole; and (ii) create a federal safe harbor to “protect Americans developing open blockchain infrastructure.” Van Valkenburgh also encouraged the Office of the Comptroller of the Currency to establish federal “fintech charters” to promote a unified approach to regulating blockchain companies.

    Federal Issues Digital Assets Fintech OCC House Energy and Commerce Committee Blockchain Digital Commerce Privacy/Cyber Risk & Data Security Virtual Currency Distributed Ledger

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  • House Energy and Commerce Committee to Hold Hearing June 8 on Fintech Options for Consumers


    On June 8, the House Energy and Commerce Committee’s Digital Commerce and Consumer Protection Subcommittee will hold a hearing as part of its “Disrupter Series.” In a press release issued June 1, the hearing, Improving Consumer’s Financial Options with FinTech, will discuss consumer needs and whether the fintech industry is offering financial products and services that meet these needs. “The FinTech industry has allowed the average American to have more control over their financial well-being while simultaneously promoting greater financial literacy. Next week’s hearing is an important opportunity for us to hear from companies on barriers they face in the market and learn how Congress can continue investing in its potential,” stated Committee Chairman, Rep. Bob Latta (R-Ohio). The hearing will begin at 10 a.m. in Room 2123 of the Rayburn House Office Building. Witnesses have not yet been announced.

    Fintech House Energy and Commerce Committee Congress

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