Nonbank Financial

The fact that financial institutions increasingly are engaging in transactions involving digital assets has spurred federal agencies to speak up regarding additional compliance obligations that come with the territory.

The agencies detailed those obligations and the circumstances that trigger their applicability in a recent joint statement.

Find out more details about the new guidance on digital assets.

In one of its first settlements between federal regulators and a Blockchain provider, the Securities and Exchange Commission (SEC) recently reached a $24 million settlement with Block.one over allegations that the company conducted an unregistered initial coin offering (ICO), which raised the equivalent of several billion dollars in digital assets in about a year. 

The settlement shines a light on the question as to whether digital assets should be treated as securities, rather than currency.

Learn more about the nuances involved in this matter.

The Federal Housing Finance Agency recently signaled the conclusion of the mortgage servicing rights (MSR) financing pilot program for Fannie Mae and Freddie Mac, drawing praise for community bankers who questioned the agency’s authority to enact such a program in the first place.

The MSR pilot began in 2018 to provide financing to non-bank servicers to enable them to help account for a growing percentage of the overall servicing portfolio of the government-sponsored enterprises.

Learn more about the initiative and why community bankers objected to it.

For the second time in the span of a year, a federal court has ruled that the Conference of State Bank Supervisors lacked standing in its legal challenge of the Office of the Comptroller of the Currency’s (OCC) authority to accept charter applications from non-bank entities.

The organization’s decision to re-file the case in the same court was driven by its hope for a different outcome given that the OCC since has come under new leadership and released policy guidance on fintech charters.

Find out more details about the ruling.

Continuing in its ongoing effort to prevent fintechs from exploiting a “loophole” in federal banking laws, the Independent Community Bankers of America (ICBA) once again urged the Federal Deposit Insurance Corp. to impose an immediate moratorium on industrial loan company (ILC) charters and to deny a high-profile applicant’s bid to obtain one.

The letter represents ICBA’s second formal effort to prevent the company from obtaining an ILC charter. The first came shortly after it filed the charter application in late July. 

Find out more about why the association does not believe the company should be chartered.

Community bankers recently voiced concerns over a charter application from Japan’s eCommerce company, Rakuten, stressing long-held concerns about issues related to competition and regulatory oversight presented by the prospect of non-bank charters which trade advocates believe must be addressed. 

Independent Community Bankers of America’s Rebeca Romero Rainey and the American Bankers Association’s Rob Nichols detailed their opposition to the company’s charter application.

Find out more details about the situation.

Non-banks and warehouse lenders could benefit from a new final rule issued by the U.S. Department of Agriculture’s (USDA) Rural Housing Service (RHS) intended to ease regulatory costs non-depository entities face associated with interim construction financing. 

The rule will amend the current regulation for the Single-Family Housing Guaranteed Loan Program.

Read on to learn more details.

The Federal Housing Administration is considering revising its lender certification requirements in an effort to offer more clarity and certainty among lenders and servicers regarding compliance.

The agency also described its plans to diversify its network of FHA-approved lenders in light of shifts within the mortgage marketplace.

Find out more details about the proposed changes and what FHA hopes to accomplish.

The Office of the Comptroller of the Currency (OCC) recently laid out its priorities for 2019 in its annual report, which include measures designed to reduce regulatory burdens while continuing to promote safety and soundness in the banking sector. It also indicates that 2018 saw the fewest OCC-issued supervisory notices in 12 years.

Many of the OCC’s recent actions, and those it is planning to take in the coming months, involve implementing provisions of the Economic Growth, Regulatory Relief, and Consumer Protection Act.

Find out more details about the report.

Research conducted by Federal Financial Analytics, Inc. indicates that fintechs pose greater financial stability risk to the economy than previously thought, due in large part to their lack of regulatory oversight.

The report details findings indicating that fintechs pose systemic risk stemming from their general lack of liquidity, lack of regulatory oversight compared with banks and credit unions, their dominance in certain areas of the marketplace and the vast amount of personally identifiable information (PII) they store.

Get an in-depth look at the reasoning provided in the report.