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Financial Services Law Insights and Observations


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  • Special Alert: California attorney general modifies proposed CCPA regulations

    State Issues

    The California attorney general last week released modifications to the proposed regulations announced last October (covered by a Buckley Special Alert) implementing the California Consumer Privacy Act (CCPA). The CCPA—enacted in June 2018 (also covered by a Buckley Special Alert) and amended several times—became effective Jan. 1.

    This Special Alert contains a summary of key modifications to the proposed regulations.

    * * *

    Click here to read the full special alert.

    If you have any questions regarding the CCPA or other related issues, please visit our Privacy, Cyber Risk & Data Security practice page or contact a Buckley attorney with whom you have worked in the past.

    State Issues State Attorney General CCPA Special Alerts Regulation Consumer Protection Privacy/Cyber Risk & Data Security

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  • California appoints Manuel Alvarez as DBO Commissioner

    State Issues

    On March 28, the California governor announced that Manuel Alvarez has been appointed Commissioner of the California Department of Business Oversight. Since 2014, Alvarez has been general counsel, chief compliance officer, and corporate secretary at an online purchase lender. Prior to those roles, he was an enforcement attorney with the CFPB, and a deputy attorney general at the California Department of Justice. Alvarez’s appointment will require the confirmation of the state Senate.

    State Issues CDBO Regulation Supervision

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  • U.S., Canada, and Mexico announce annual financial regulatory forum

    Federal Issues

    On November 30, the U.S. Treasury Department, the Canadian Department of Finance, and the Ministry of Finance and Public Credit of Mexico (collectively, the “authorities”) announced the creation of the Canada-Mexico-United States Financial Regulatory Forum (Forum) to share information on financial sector developments and financial regulatory practices and procedures. The authorities published a joint “understanding,” which outlines the Forum’s intentions, including: (i) sharing information to allow for timely identification of potential cross-border financial regulatory issues; (ii) exchanging views on emerging financial sector developments and financial stability risks; and (iii) discussing regulatory issues that arise in bilateral and multilateral contexts or which relate to international standards. The Forum intends to meet annually.

    Federal Issues Canada Mexico Regulation Financial Stability Department of Treasury

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  • District Court concludes a small virtual currency is a “commodity” under the Commodities Exchange Act


    On September 26, the U.S. District Court for the District of Massachusetts denied a virtual currency trading company’s motion to dismiss, concluding that smaller virtual currencies are commodities that may be regulated by the CFTC. In January, the CFTC bought an action alleging the company violated the Commodities Exchange Act (CEA) and CFTC Regulation 180.1(a) by making false or misleading statements and omitting material facts when offering the sale of their company’s virtual currency. For example, the complaint alleges that the company falsely stated that its virtual currency was backed by gold, could be used anywhere Mastercard was accepted, and was being actively traded on several currency exchanges. Moreover, while consumers who purchased the virtual currency could view their accounts, they were unable to trade it or withdraw funds from their accounts with the company. The company moved to dismiss the case, arguing that the conduct did not involve a “commodity,” specifically one that underlies a futures contract, under the CEA. In denying the motion to dismiss, the court determined that Congress intended for the CEA to cover a certain “class” of items and specific items within that class are then “dealt in.” Because the company offered a type of “virtual currency” and it is “undisputed that there is futures trading in virtual currencies (specifically involving Bitcoin),” the court held that the CFTC sufficiently alleged the company’s product is a “commodity” under the CEA. The court also rejected the company’s other arguments, determining Regulation 180.1(a) was meant to combat the fraud alleged by the CFTC, notwithstanding its use of the term “market manipulation,” and the CFTC adequately pleaded the fraudulent claim under the regulation.  

    Courts Virtual Currency CFTC Regulation Fraud Fintech

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  • GAO encourages increased collaboration in fintech regulation


    In March, the Government Accountability Office ("GAO") issued a report addressing aspects of the fintech marketplace, including the benefits and risks for consumers; current regulatory oversight and challenges; and recommendations for federal action. The report notes that fintech products – such as payments, lending, wealth management, and distributed ledger technologies, among others – generally produce benefits to consumers in the form of lower costs and easier access. Nonetheless, fintech innovation comes with associated risks as certain products may not be covered by existing consumer protection laws, and the extent to which fintech providers are subject to federal and state oversight varies. According to the GAO, fintech providers note that complying with the “fragmented” federal and state requirements is “costly and time consuming.” The report emphasizes the need for regulators to increase collaboration to address key concerns in the fintech market, such as financial account aggregation. The GAO also highlights the efforts other jurisdictions have taken to increase fintech innovation and recommends U.S. federal agencies consider successful foreign regulatory approaches, such as “regulatory sandboxes,” which allow fintech companies to offer products on a limited scale with certain regulatory relief.

    Of note, Arizona recently became the first U.S. state to introduce a “regulatory sandbox” for fintech products marketed and sold to Arizona consumers. See InfoBytes summary here

    Fintech GAO Compliance Regulation

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