Fintech

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On May 3, the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency (collectively, the agencies) released a guidebook aimed at assisting community banks in managing risks associated with third-party relationships (the TPRM Guide). The TPRM Guide builds upon the principles introduced in the third-party risk management guidance for banking organizations issued by the agencies in June 2023 (the June 2023 Guidance, discussed here) as well as the agencies’ community bank guide for conducting due diligence on fintech companies from October 2023 (discussed here) but does not displace or substitute that prior guidance.

In 2023, the digital asset industry demonstrated remarkable resilience amidst significant challenges, including the dissolution of several digital asset financial services companies, numerous bank failures, and a $4.7 billion fine imposed on Binance by the U.S. government. Despite these adversities, the digital asset market rebounded, recapturing over 50% of the market capitalization lost in 2022, bringing the total to $2.59 trillion.

The Federal Deposit Insurance Corporation (FDIC) recently announced a consent order with Tennessee-based Lineage Bank containing orders relating to the bank’s third-party risk management program and its financial technology (fintech) partners.

It was a busy year for enforcement activity in the cyber, crypto, SPAC, and whistleblower spaces, with several pending actions that will likely have wide-ranging implications in 2024. We are also awaiting a ruling from the U.S. Supreme Court that could alter the landscape on administrative law proceedings. From the SEC’s release of expansive cybersecurity rules to the largest whistleblower award ever issued, 2023 had plenty of exciting developments. A detailed summary of key developments by category can be found below.

James Stevens, co-leader of Troutman Pepper’s Financial Services Industry Group, was quoted in the February 27, 2024 Vixio article, “Georgia Clarifies Merchant Acquirer Law as Firms Submit First Applications in a Decade.”

“There is at least one large company that is seriously considering filing an application. And we have had a number of…

We are pleased to share our annual review of regulatory and legal developments in the consumer financial services industry. With active federal and state legislatures, consumer financial services providers faced a challenging 2023. Courts across the country issued rulings that will have immediate and lasting impacts on the industry. Our team of more than 140 professionals has prepared this concise, yet thorough analysis of the most important issues and trends throughout our industry. We not only examined what happened in 2023, but also what to expect — and how to prepare — for the months ahead.