This week in TechREG, state regulators have been very active proposing new regulations and taking enforcement actions. California probed several crypto lenders for suspending withdrawals and transfers as this may violate the law. The same state also announced that public comments for its new privacy laws will be open until Aug. 23. Another state, this time New York, issued guidance prohibiting certain types of overdrafts and non-sufficient fund (NSF) fees are unfair and deceptive. At the federal level, the Consumer Financial Protection Bureau (CFPB) took actions against two companies in two separate cases for misleading consumers.
Crypto
California Regulator Probes Crypto Lenders Over Withdrawal Suspensions
The California Department of Financial Protection and Innovation (DFPI), which looks into operations of state-licensed financial institutions, will be investigating whether crypto-asset companies that suspended withdrawals and transfers have broken the law.
It’s looking into a few crypto companies in particular, including Voyager Digital and Celsius, Yahoo Finance reported Wednesday (July 13).
Digital Dollar May Prevent Runs, but Banks Fear Lost Profits
A new Treasury Department report argues that banks’ fears that a digital dollar would lead to the loss of depositors and even bank runs is overblown.
A U.S. central bank digital currency (CBDC) could strengthen financial stability, according to a research paper issued on Tuesday (July 12) by the Treasury Department’s Office of Financial Research (OFR).
Gensler Says SEC Can ‘Exempt’ Crypto Firms From Disclosures — If They Register
Securities and Exchange Commission (SEC) Chairman Gary Gensler did not, in fact, offer to exempt cryptocurrency exchanges, lenders and broker dealers from securities laws.
What he did do when bringing up the SEC’s “robust… exemptive authorities” in a Thursday (July 14) interview with Yahoo Finance, is say that the SEC is able to “tailor investor protection” to fit the specific aspects of cryptocurrencies.
Big Tech, Data Privacy
California Privacy Protection Agency Sets Aug. 23 as Deadline on Data Rules
On Friday (July 8) the California Privacy Protection Agency (CPPA) began the process to implement the Consumer Privacy Rights Act of 2020 (CPRA), which updates and enhances the California Consumer Privacy Act (CCPA).
New regulations would put consumers “in a position where they can deliberately and freely bargain with a business over the business’s use of personal information,” according to the agency’s initial statement of reasons. The public comment period for the proposed regulations ends on Aug. 23.
Google Offers to Break Up $209 Billion Ad-Tech Unit To Appease Regulators
While Google is accustomed to regulatory risks stemming from new legislation, antitrust probes or litigation, the company seems to have recently adopted a more collaborative approach with regulators and policymakers to manage — and eventually reduce — these regulatory risks.
One of the latest examples of this are the concessions offered by the company to the Department of Justice to fend off a possible U.S. antitrust lawsuit aimed at its ad-tech business. Yet, the DOJ did not accept these concessions, paving the way for a fresh suit, according to Bloomberg.
California Law Threatens Legal Status of 70,000 Truck Drivers
California labor standards are beginning to apply to some 70,000 truck owner-operators, who make up the backbone of state’s transportation business, creating another bottleneck in already strained supply lines.
Under Assembly Bill 5 (AB5), workers who fail to pass a three-part test will no longer be classified as independent contractors and must treated as employees, entitling them to benefits from their employers, according to a report Friday (July 8) from Bloomberg.
Payments
NY Regulator and Lawmakers Join CFPB in Push to Ban Overdraft Fees
Rohit Chopra, director of the Consumer Financial Protection Bureau (CFPB), has made it a priority for the bureau to fight against “junk fees,” overdraft fees, non-sufficient fund (NSF) fees and credit card late fees.
On Tuesday, July 12, the New York Department of Financial Services (DFS) showed Chopra that it is listening. Adrienne Harris, superintendent of the DFS, announced that the regulator is prohibiting unfair and deceptive overdraft and NFS practices.
CFPB Sues ACE Cash Express, Alleging It Funneled Customers Into Costly Reborrowing
Payday lender ACE Cash Express has been accused by the Consumer Financial Protection Bureau (CFPB) of hiding free repayment alternatives from its customers. According to a statement put out by the CFPB Tuesday (July 12), ACE allegedly misled customers about how many times their bank accounts would be debited for loan repayments and fees. In turn, the CFPB has filed a lawsuit against ACE in the U.S. District Court for the Northern District of Texas.
CFPB Fines Bank of America $100M Over Alleged Unlawful Account Freezing
The Consumer Financial Protection Bureau announced Thursday (July 14) that it has leveled a $100 million fine at Bank of America for allegedly messing up the disbursement of state unemployment benefits during the pandemic.
Bank of America reportedly “automatically and unlawfully” froze peoples’ accounts with a flawed fraud detection program, according to a CFPB press release. The CFPB also alleged the bank didn’t offer impacted individuals much recourse, even if there was no fraud.
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