Today in TechREG, the Consumer Financial Protection Bureau (CFPB) removed Upstart from its list of approved “no-action letters” (NALs). The NALs provided regulatory immunity, but it was the company, not the agency, that requested the removal.
Plus, European Union regulators gave one month to Meta’s WhatsApp to comply with EU consumer law. And the EU ministers responsible for trade and industry across Europe discussed the merits of the Consumer Credit Directive (CCD) before a key vote next week in the EU Parliament that may decide the fate of this bill.
Upstart’s Request to End Regulatory Immunity Raises Question on CFPB’s No-Action Tool
The CFPB issued an order Wednesday (June 8) to terminate Upstart Network from its list of approved NALs. Surprisingly, the request to terminate the NAL didn’t come from the regulator but from the company, and it may raise questions about the requirements imposed by the agency to benefit from the NALs.
The NALs provided a special regulatory treatment to Upstart by immunizing the lender from being charged with fair lending law violations with respect to its underwriting algorithm. Yet the company requested the termination of the NAL to “be able to make changes to its model without need for CFPB review and approval.”
WhatsApp Has Until July to Comply With EU Consumer Law, Regulator Says
Meta’s WhatsApp has until July to show that a privacy policy update introduced in January complies with EU consumer law, the European Commission said Wednesday, in a case prompted by complaints from consumer bodies across Europe.
“WhatsApp must ensure that users understand what they accept and how their personal data is used for commercial purposes, in particular, to offer services to business partners,” said Justice Commissioner Didier Reynders in a statement.
EU Ministers Takes on Consumer Credit Bill Before Parliament Vote
Ministers responsible for trade, economy, industry and innovation across Europe discussed on Thursday (June 9) the merits of the proposed revision of the CCD, and they will adopt a position before the upcoming vote in the EU Parliament next week. The commission’s CCD proposal aims to address technological developments in the consumer credit space by expanding its scope, introducing pricing rules for some credits, clarifying information requirements and revising creditworthiness assessments
UK Government Pushes for Crypto Sandbox, Stablecoin Regulation
Gwyneth Nurse, the United Kingdom Treasury’s director general for financial services, said that the use of distributed ledger technology (DLT), which is the underlying technology used by crypto assets, is a key priority for making financial markets more innovative. To this end, the U.K. will launch a regulatory sandbox next year for testing DLT projects under the supervision of regulators.
One of the purposes of this new sandbox would be to try DLT projects involving activities such as trading, clearing and settlement, to be able to issue bonds or stock in hours rather than days or weeks, for example.
In US First, NY Requires Stablecoins to Be Backed by Cash
New York State Department of Financial Services (NYDFS) Superintendent Adrienne Harris announced Wednesday that the agency has issued guidance that provides “clear criteria for virtual currency companies looking to issue USD-backed stablecoins in New York.” Specifically, it requires that stablecoins issued in New York be 100% backed by reserves of dollars and four different types of treasuries, have those reserves audited monthly and be redeemable on demand.
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