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  • Posts by John A. Stoker
    Counsel

    John provides legal advice and counsel on laws and regulations applicable to financial products, services and operations, and enterprise initiatives. Prior to joining the firm, John served as Associate General Counsel of the ...

On August 11, 2022, the Consumer Financial Protection Bureau (“CFPB”) issued a circular (Circular 2022-04 or, the “Circular”) addressing whether insufficient data and information security practices can violate the prohibition against unfair acts or practices in the Consumer Financial Protection Act (“CFPA”). The CFPB concluded that inadequate security practices could give rise to a claim not only under federal data security laws like the Gramm-Leach-Bliley Act (“GLBA”), but also under the CFPA as well. The Circular discusses the elements of a claim under the CFPA and identifies a few specific practices that the CFPB identified as likely giving rise to a violation of the CFPA. The Circular, however, does not otherwise provide direction to the industry on expected information security practices.

Risks Associated with Cryptocurrency Activities Continue to be Top-of-Mind for Federal Banking Regulators

For those tracking developments impacting the crypto-asset space, the summer has been far from slow and leisurely. Multiple industry alerts flow daily with news of new legislative proposals, enforcement actions, and other events or issues impacting the industry. The news is inevitably accompanied by calls for greater legal certainty regarding crypto-asset characterization and clarity around the regulatory framework governing the industry. While news flows quickly, the pace of substantive developments, however, has been frustratingly slow for many. Unmoved by demands for ...

NYDFS Releases Stablecoin Guidance for NYDFS-regulated Institutions

On June 8, 2022, the New York State Department of Financial Services (“NYDFS”) released industry guidance applicable to U.S. dollar-backed stablecoins issued by NYDFS-regulated entities (the “Guidance”). The Guidance focuses on NYDFS requirements relating to the redeemability of these stablecoins, the asset reserves that back them (the “Reserves”), and auditor examination and attestations regarding management’s assertions concerning the sufficiency of the Reserves.  

By way of background, a stablecoin is a type of digital asset that is intended to ...

Acting Comptroller Hsu Suggests a Potential Path Forward to Address Identified Gaps in the Regulatory Resolution Framework for Large Regional Banks

In the fourteen years since the 2008 financial crisis, significant actions have been taken by Federal banking agencies to make the largest financial institutions more resilient and less likely to fail and to require planning that would facilitate their orderly resolution, if necessary. These risk mitigation measures are tailored, however, with the most stringent requirements, and highest regulatory expectations, appropriately reserved for the eight U.S. banks designated as posing the greatest risk to financial stability (global systemically important banks, or GSIBs ...

Federal Agencies Focused on Discriminatory Home Valuation Practices

Late last year, news services reported on the results of the efforts of a black couple living in Northern California to challenge what they believed was an initial, discriminatory low-ball appraisal of their home. To test their theory, the couple “whitewashed” their home by removing artwork and replacing family photos with those of a white neighbor, who acted as the homeowner during a second appraisal from another company. The couple filed a discrimination lawsuit against the initial appraiser after the second appraisal came in almost half a million dollars higher. Recent ...

New Executive Order Signals Further Delay for the Regulation of Cryptocurrencies and Continuing Interest Around a U.S. Central Bank Digital Currency

President Biden signed an executive order today setting forth an agenda across the U.S. government to address risks related to cryptocurrencies while encouraging continued innovation around digital assets and funds transfer and payment systems. The order represents an acknowledgement by the Biden administration of the prevalence of cryptocurrencies in the U.S. and global economies and their ability to facilitate access to financial services within traditionally underserved communities. The order conveys a need for the U.S. to keep up with these technological advances ...

Preemption Update and Future Implications: Congress Repeals The OCC’s True Lender Rule

Congress has voted to overturn the Office of the Comptroller of the Currency’s (“OCC’s”) “true lender” rule under the Congressional Review Act (“CRA”), and the President has signed the resolution. Repeal of the “true lender” rule under the CRA prevents the OCC from issuing any substantially similar rule unless authorized by law to do so.  

The True Lender Rule, which became effective December 29, 2020, provided that a bank would be deemed to have made a loan if, on the date of its origination, the bank either (1) is named as the lender in the loan agreement, or (2) funds ...

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