REGULATORY DEVELOPMENTS
On February 4, the SEC published a request for public comment regarding potential reform measures for money market funds, as highlighted in a recent report of the President’s Working Group on Financial Markets (PWG). The PWG report discussed the results of the PWG’s study on the effect of the COVID-19 pandemic on the short-term funding markets and, in particular, on money market funds, including the general stress experienced by prime and tax-exempt money market funds. The report concluded that the events of March 2020 show that more work is needed to reduce the risk that structural vulnerabilities in prime and tax-exempt money market funds will exacerbate or lead to stresses in short-term funding markets. The potential reform measures as outlined in the PWG report seek to: (i) address money market funds’ structural vulnerabilities that can contribute to stress in short-term funding markets; (ii) improve the resilience of money market funds and broader
DFPI Wants To Know: Whom Shall We Regulate? Thursday, February 11, 2021
Last year, California enacted AB 1864, Cal. Stats. 2020, Ch. 157, creating the California Consumer Financial Protection Law (CCFPL) under Division 24 of the Financial Code. Remarkably, the legislature left it up to the Department of Financial Protection and Innovation to determine what industries will become subject to registration requirements. Having been handed a regulatory
tabula rasa, the DFPI is now asking the public: For what industries should the DFPI first establish registration requirements under Financial Code section 90009, subdivision (a)?
This is just one of many questions posed in the DFPI s recently issued invitation for comments. The DFPI is requesting input on a great deal of equally broad questions. For example, it is asking:
Bank Type: The OCC uses the bank type classifications to determine the performance standards and examination procedures to evaluate a bank’s CRA performance. The OCC classifies banks as a small bank, intermediate bank, wholesale bank, limited purpose bank or a bank subject to the June 2020 rule’s general performance standards. The categorization is generally based on the bank’s asset size, except wholesale and limited purpose banks are classified based on business model. A small bank has assets of $600 million or less. An intermediate bank has $600 million to $2.5 billion in assets. A GPS bank has assets greater than $2.5 billion.
In January 2021, the new California Department of Financial Protection and Innovation (DFPI) entered into memorandums of understanding (MOUs) with five earned wage access fintech.
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On February 3, 2021, the California Department of Financial Protection and Innovation (DFPI) announced its first formal enforcement action against an Irvine-based student debt relief company. The DFPI’s action alleges that the company’s student debt relief practices violated the California Consumer Financial Protection Law and Student Loan Servicing Act.
According to the DFPI, for over three years, the company and its affiliates ran a student loan debt relief scam from California, convincing over a dozen California residents and others nationwide to pay tens of thousands of dollars to “wipe away” their student loans by getting them “dismissed” or “discharged.” The company allegedly operates a website, where it offers to, among other things, ”potentially save [consumers] hundreds or thousands of dollars over the course of [their]student loan repayment,” and employed “privat