Developments in the Laws Affecting Electronic Payments and Financial Services

The past year proved to be a busy period for the regulation of electronic payments and financial services. In this year’s survey, we discuss rulemakings, enforcement actions, and other litigation that has significantly impacted the law governing payments and financial services. Part II addresses the ongoing fight between federal and state authorities over which should properly regulate Fin- Tech entities and describes some new steps the Office of the Comptroller of the Currency (“OCC”) has taken to assert its authority in this area. Part III details an enforcement action that California regulators took against a FinTech company they determined had misrepresented its relationship with its banking partner. Efforts by both federal and state regulators to assert their authority over virtual currency, including a relatively new form of virtual currency called a stablecoin, are discussed in Part IV. The decision of a federal judge upholding the application of the District of Columbia’s money transmission statute to a virtual currency business is addressed in Part V. Part VI covers much-needed guidance from the Consumer Financial Protection Bureau regarding Earned Wage Access products while Part VII discusses the Bureau’s loss of a court challenge to part of its regulations governing prepaid accounts. In Part VIII, we address a warning from the Federal Trade Commission (“FTC”) to businesses employing artificial intelligence that the use of algorithms that discriminate based on race or other protected classes is a violation of federal law. Section IX provides our thoughts on what business lawyers may expect to see in the next year or two