The NMLS Money Services Businesses (MSB) Call Report, described by the Conference of State Bank Supervisors (CSBS) as “a new tool within the Nationwide Multistate Licensing System (NMLS) that will streamline MSB reporting, improve compliance by the industry, and create the only comprehensive database of nationwide MSB transaction activity,” is now live in the NMLS, and the initial report is due May 15, 2017.

Since state regulators decided to transition the licensing of money services businesses on to the NMLS, they have been developing a more uniform report, which standardizes a number of definitions and the categorization of transactions, by which MSBs could report on their money service-related activities through the NMLS. Further, with the development and use of a more standardized MSB report, the need for MSBs to have additional tracking and reporting systems that can slice and dice transactions into each state’s unique buckets is reduced or eliminated.

Consequently, the new MSB Call Report was adopted by CSBS and released in NMLS on April 1, 2017. As a former Assistant Commissioner with the State of Maryland, I served on both the MSB Call Report Working Group and the NMLS Policy Committee (NMLSPC). The NMLSPC was responsible for recommending the approval of the Report, which was envisioned to operate along the lines of the Mortgage Call Report required of mortgage finance licenses, to CSBS. Continue Reading Money Services Businesses Call Report Q1 Submission Deadline Quickly Approaching

On January 31, 2017, the CFPB released its Prepaid Rule Small Entity Compliance Guide to facilitate comprehension of and the implementation of the new prepaid rule on October 1, 2017. As described in our prior Legal Update, the CFPB issued the final prepaid rule in October 2016 which amends Regulation E to cover prepaid accounts including payroll card accounts, government benefit accounts, and other types of prepaid products.  The Compliance Guide details requirements of the new rule and provides examples to help illustrate key aspects including what constitutes a prepaid account, the entities subject to the new rule, disclosure obligations, and error resolution procedures, among others.

Just one day after the CFPB’s release of the Guide, Senator David Perdue (R-GA) introduced a joint resolution of disapproval aimed at wiping the prepaid rule off the books pursuant to the Congressional Review Act.  Under the CRA, Congress may overturn new federal agency regulations by reviewing them within a certain time period, passing a joint resolution of disapproval in each chamber, and obtaining the president’s signature.  On February 3, Representative Tom Graves (R-GA) followed suit, introducing a similar joint resolution in the House of Representatives.  Stay tuned for updates on whether the prepaid rule’s future may truly be in jeopardy.

Financial services companies that hoped for immediate regulatory relief when the Trump Administration assumed control may have to wait a bit longer, because the newly announced freeze on federal regulations does not appear to apply across the board.  “Independent regulatory agencies,” such as the Consumer Financial Protection Bureau (“CFPB”), the Federal Reserve Board, the Office of the Comptroller of the Currency (“OCC”), the Federal Deposit Insurance Corporation (“FDIC”), and the Securities and Exchange Commission (“SEC”) may be excluded from that moratorium. Continue Reading How Solid is the “Freeze”? Some Agencies May Be Excluded from White House Regulatory Moratorium

On Tuesday, August 2, 2016, at 2:00pm EDT, Mayer Brown and Paybefore.com will present a webinar on the CFPB’s actions against payment processors for allegedly facilitating illegal transactions by their clients. The presenters will be Mayer Brown attorneys David Beam, Ori Lev, and Jeremy McLaughlin, and the moderator will be Paybefore’s Evan Schuman.  The webinar will discuss the CFPB’s enforcement actions against payment processors, explain the factors that led the CFPB to conclude that the payments companies were culpable, and discuss practical steps companies can take to avoid the same fate.

Register for the event here.

The Consumer Financial Protection Bureau (CFPB) marks its fifth birthday having made a substantial mark on the consumer financial services marketplace. To mark this event, we have compiled a retrospective of the CFPB’s first five years. The retrospective provides an overview of the CFPB’s actions in the realms of rulemaking, supervision, and enforcement. While it would be difficult to chronicle all of the CFPB’s activities over that period, the articles in the retrospective provide a snapshot of the rules the CFPB has written or proposed, the supervision program it has implemented, and the enforcement actions it has taken across the landscape of consumer financial services. Some of the articles appeared previously on this blog, others appeared as Mayer Brown Legal Updates, and many are new analyses or summaries of the CFPB’s actions.  Read the retrospective, available here.

 

Montana is now officially the only state in the United States that does not have a law regulating money transmitters. On June 9, 2016, South Carolina Governor Nikki Haley signed into law the South Carolina Anti-Money Laundering Act (the “Act”).  Among other things, the Act imposes licensing and other obligations on businesses engaged in money transmission.  The Act takes effect the later of one year after approval by the Governor or upon publication in the State Register of final regulations implementing the Act. Continue Reading South Carolina Enacts Money Transmitter Law

According to the CFPB’s latest rulemaking agenda, the agency is pushing back to “this summer” release of the final rule on prepaid accounts. The release had previously been expected this May or June, after it was pushed back from a March expected release.

The Bureau issues the proposed role in November 2014. Generally, it proposed to subject prepaid products to the Electronic Fund Transfer Act and Regulation E and to amend Regulation Z to regulate prepaid accounts with overdraft or credit features.

FinCEN itself says that there’s not much new in the guidance to money services businesses that the agency released last Friday (March 11, 2016) on agent monitoring (the Guidance).1 But MSBs that rely on agents should still review the Guidance carefully. The fact that FinCEN has decided to release this Guidance now shows that the agency is focused on the issue. And the agency does clarify some important points related to agent monitoring by MSBs.

To learn more about the Guidance, read the Mayer Brown Legal Update on it, available here.