Banking and Finance

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On May 7, 2025, the Office of the Comptroller of the Currency (“OCC”) issued a follow up to its July 2020 Interpretative Letter 1170, which allowed national banks to provide cryptocurrency custody services to their customers.[1] The May 7 letter (Interpretive Letter 1184)[2] further clarified that banks can buy and sell cryptocurrency at the custody customer’s direction and outsource cryptocurrency custody and execution services.[3] But in contrast to the OCC’s clear confirmation that banks can provide cryptocurrency custody services, the guidance for safe and sound practices for those services remains murky.Continue Reading Banks May Provide Cryptocurrency Transaction and Custody Services, but OCC Has Yet to Provide Clear Compliance Requirements

On March 17, 2025, the Office of the Comptroller of the Currency (OCC) announced that it conditionally approved a fintech business model for CenTrust Bank, N.A.’s (“CenTrust”), an Illinois based community bank chartered by the OCC.[1] CenTrust was acquired by SmartBiz Loans, which is a fintech company that provides an online platform to connect small business owners with lenders providing Small Business Administration (“SBA”) loans. Following the acquisition, CenTrust applied to change its business model to incorporate the SmartBiz Loans’ business model of providing SBA loans nationwide.Continue Reading Another Fintech Company Acquires a National Bank Charter through Merger

On October 11, 2023, President Biden, Federal Trade Commission (FTC) Chair Lina Khan, and Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra announced the latest developments in the government’s efforts to tackle junk fees. Junk fees are hidden, surprise fees imposed on customers without clear disclosure.[1] The CFPB and FTC have taken several measures to crack down on junk fees since early 2022, including:

  • On January 26, 2022, the CFPB issued a request for information regarding fees that consumers believed to be covered by a baseline price, unexpected fees, and fees that seemed too high or unclear.[2]
  • On March 23, 2023, the FTC proposed a “click to cancel” provision requiring sellers to make it easier for consumers to cancel their recurring subscriptions and memberships.[3]
  • On June 22, 2022, the CFPB issued an advance notice of proposed rulemaking to address excessive credit-card late fees. [4] On February 1, 2023, the CPFB issued a proposed rule limiting and capping late fees.[5]
  • On June 29, 2022, the CFPB issued an advisory opinion affirming that “pay-to-pay” fees that are not authorized by the original loan violate the Fair Debt Collection Practices Act (FDCPA). “Pay-to-pay” fees are those that are imposed on consumers who want to make a payment in a particular way.[6]
  • On July 23, 2022, the FTC proposed a rule to ban junk fees and bait-and-switch tactics for car buyers.[7]
  • On October 20, 2022, the FTC published an advance notice of proposed rulemaking to crack down on junk fees, seeking comments on unnecessary charges, unavoidable charges, and surprise charges.[8]
  • On October 26, 2022, the CFPB issued guidance stating that imposing surprise bounced-check or overdraft fees are likely to be unfair and unlawful.[9]
  • On October 11, 2023, the CFPB published a Supervisory Highlights special edition covering junk fees in the areas of bank accounts, auto-loan servicing, and remittances that were identified during CFPB examinations between February and August 2023. The CFPB claims to have recovered and is refunding $140 million back to impacted customers.[10]

Earlier this week, the CFPB released an advisory opinion on fees related to consumers requesting information on products and services, and the FTC proposed a new rule banning hidden fees and bogus fees.Continue Reading The FTC and CFPB Announce New Rules to Tackle Junk Fees

In December 2022, California’s new commercial lending disclosure law and complementary regulations went into effect, leading the way for other states to follow.

The new California law imposes disclosure requirements in commercial lending transactions. While this is not new for consumer lenders that are accustomed to complying with the Truth in Lending Act, this is uncharted territory in the commercial lending space. Like the federal Truth in Lending Act, the new California law is meant to provide prospective borrowers with an opportunity to see a concise summary of the obligation’s terms in an easy-to-read format. Ideally, this allows a prospective borrower to take the terms offered by two or more lenders and compare them, side by side, to determine the best offer.Continue Reading California Leads the Way on Commercial Lending Disclosures

On October 13, 2022, the Board of Governors of the Federal Reserve System (“Board”) announced multiple enforcement actions against former employees of several financial institutions because the former employees made false statements to obtain economic injury disaster loans and grants from the U.S. Small Business Administration (“SBA”) or paycheck protection loans from SBA-approved lenders.  The loans and grants were made available to small businesses who were suffering from the impact of COVID-19 and needed emergency financial assistance authorized by the Coronavirus Aid, Relief, and Economic Security (P.L. 116-136, the “CARES Act”). Continue Reading Federal Reserve Exercises Broad Disciplinary Authority to Sanction Former Bank Employees Who Committed PPP Loan Fraud

The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Financial Crimes Enforcement Network, the National Credit Union Administration, and the Office of the Comptroller of the Currency (collectively the “Agencies”) issued a Joint Statement on July 6, 2022, reminding banks[1] of the “risk-based approach to assessing customer relationships and conducting customer due diligence (CDD).”  The Joint Statement reminds banks that the Agencies consider a blanket approach of assessing customer risk, based solely on the type of customer (e.g., casino, auto dealer, etc.), to be inappropriate.  Specifically, the Joint Statement urges financial institutions not to simply ascribe the same level of risk to all customers of a particular type. Rather, banks must use a risk-based approach that evaluates the specific customer at issue when creating customer profiles and when establishing and maintaining customer relationships.  Further, the Joint Statement expresses a preference for enhanced monitoring rather than exiting customer relationships as part of de-risking.[2]
Continue Reading Bank Regulators Remind Financial Institutions Not to Take a One-Size Fits All Approach to Assessing AML Risks from Customer Relationships

On May 26, three days into her term as Vice Chair of the Federal Reserve, Lael Brainard testified about the Federal Reserve’s Examination of the Benefits and Risks of a U.S. Central Bank Digital Currency (CBDC) before the House Committee on Financial Services.  Vice Chair Brainard’s comments reinforced many of the themes from the Fed’s January 2022 discussion paper [1], echoing the need for “clear regulatory guardrails to provide consumer and investor protection” in the rapidly developing digital assets markets while the Federal Reserve considers whether future conditions may give rise to the need for the United States to adopt a CBDC.
Continue Reading Is the Future of the Dollar Digital? The Fed Talks Updating Greenbacks to the Blockchain

On March 31, 2022, the Federal Deposit Insurance Corporation (FDIC) issued the March 2022 edition of its Consumer Compliance Supervisory Highlights. The publication provides a high-level overview of consumer compliance issues identified in 2021 through the FDIC’s supervision of state-chartered banks and thrifts that are not members of the Federal Reserve System.  It provides important guidance regarding compliance priorities for these financial institutions.
Continue Reading FDIC Consumer Compliance Supervisory Highlights for State and Community Banks

Jeff Ehrlich

McGuireWoods is pleased to announce that Jeff Ehrlich, former deputy enforcement director at the Consumer Financial Protection Bureau, has joined the firm’s financial services litigation practice as a partner in Washington, D.C.

Jeff joined the CFPB in 2011 and was promoted to deputy enforcement director in 2013. In that role, he led the CFPB’s…

On March 9, 2022, President Biden signed an Executive Order on Ensuring Responsible Development of Digital Assets (“Executive Order”) to mobilize the federal government to develop a strategy for digital assets, intending to encourage innovation in a manner that mitigates the risks to consumers, investors, and businesses. The Executive Order mandates an interagency approach across several executive departments and federal agencies to conduct reports and analyses on key issues impacting digital assets, including consideration of U.S. Central Bank Digital Currencies (“CBDC”). The Executive Order identifies six primary policy objectives:

  1. protect U.S. consumers, investors, and businesses;
  2. protect U.S. and global financial stability and mitigate systemic risk;
  3. mitigate the illicit finance and national security risks posed by misuse of digital assets;
  4. reinforce U.S. leadership in the global financial system and in technological and economic competitiveness;
  5. promote access to safe and affordable financial services; and
  6. support technological advances that promote responsible development and use of digital assets.

Continue Reading Federal Framework for Digital Asset Regulation Comes into Focus