Nonbank Financial

The California Department of Financial Protection and Innovation issued a cease and desist order against a purported cryptocurrency investment platform for violating the state’s securities laws. The enforcement action was part of a coordinated effort with other states’ regulators.

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Marking the first expansion of the Small Business Administration’s program designed to facilitate growth in underserved markets in more than 40 years, the Biden-Harris administration recently granted three new Small Business Lending Company (SBLC) licenses.

SBLC licenses are intended to empower non-depository lenders to leverage government guarantees when underwriting small business loans in historically underserved markets.

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Speaking before the Securities Industry and Financial Markets Association, Securities and Exchange Commission Chair Gary Gensler delved into recent reforms aimed at enhancing the efficiency and resilience of Treasury markets.

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Perhaps one of the most anticipated conversations during the Mortgage Bankers Association’s (MBA) 2023 convention occurred between Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra and MBA President and CEO Bob Broeksmit.

The relationship between banks and mortgage lending was the primary topic of conversation. Chopra and Broeksmit discussed concerns over new Basel III requirements, as well as the need for regulation in the nonbank financial sector.

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In a move aimed at bolstering data security within the financial sector, the Federal Trade Commission (FTC) greenlit an amendment to its Safeguards Rule, requiring nonbank financial institutions to report data security breaches to the agency.

The amendment also will lessen the number of affected customers requiring a breach to be reported and impose a shortened time frame for reporting such a breach to the FTC.

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A testing error by payment processor ACI Worldwide resulted in a $10 million settlement with attorneys general from all 50 states. The error occurred in April 2021, leading to the attempted unauthorized withdrawal of $2.3 billion from 477,000 mortgage accounts across the country.  Read on »

The Securities and Exchange Commission (SEC) recently issued an enforcement action against Stanley Black & Decker involving inaccurate proxy disclosures in which the company underreported certain compensation paid to high-level executives.

Proxy statements filed by the company from 2018-2021 indicate that Stanley paid $1 million on average to four executive officers and one director. These payments were disclosed as “All Other Compensation” in financial reports, according to an SEC release. 

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The topic of cryptocurrency has become increasingly mainstream, so much so that Bitcoin ATMs now can be found just about anywhere. The Federal Reserve Bank of Kansas City recently published an article detailing findings from its research on this relatively new and largely unexamined industry, describing how these standalone machines work, who uses them and some of the risks faced by the industry.

Bitcoin ATMs, also referred to as “BTMs,” are standalone kiosks that convert cash to crypto.

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In the agency’s first enforcement action involving its “marketing rule” pertaining to cryptocurrencies, the Securities and Exchange Commission (SEC) ordered a fintech investment advisory firm to pay a $1 million settlement for allegedly misleading investors about performance metrics. 

Additionally, the SEC found other compliance issues present in the company’s business practices, which led to misleading disclosures about the custody of clients’ cryptocurrency assets.

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Coinbase Financial Markets, Inc. secured regulatory approval from the National Futures Association, a Commodity Futures Trading Commission-designated organization, to offer access to crypto futures through its platforms. Read on »