State attorneys General (AGs) continue to emerge as major
regulators of financial services and show little sign of being
cowed by their federal counterparts....or efforts to preempt
This week, representatives of the consumer protection divisions
of the AGs of nearly all 50 states plus officials from the FTC and
CFPB met in Phoenix to compare notes and coordinate activity on a
range of issues impacting consumers. The meeting was
sponsored by the National Association of Attorneys General (NAAG)
which serves an educational function for AG offices, and also
coordinates legal and policy issues to serve its AG members.
Issues discussed at NAAG meetings often signal the onset of
increased legal and regulatory activity by AGs.
Among the issues addressed, none was more prominent that those
involving consumer financial services. Key panels at the
meeting addressed state involvement in FinTech, Payday Lending and
"FINTECH – The New Frontier" in particular was
keyed up for prominent discussion and included briefings by the
FTC, the Utah Department of Financial Institutions and
academics. A particular theme that emerged that should be top
of mind for FinTech companies is that many AGs believe they already
have the tools to regulate and pursue legal matters regarding
FinTech under state consumer protection statutes governing unfair
or deceptive acts and practices (aka, "UDAP" laws)
notwithstanding that new products may not be subject to laws
specifically addressing them. Another area of concern, particularly
for non-bank FinTech firms hoping for some relief from
state-by-state regulatory compliance and enforcement through
potential preemptive rules by the OCC, is that efforts to preempt
state actions and regulations with respect to FinTech will be
widely resisted by the states.
In light of this, as FinTech firms continue to expand and refine
their products, they would do well to keep their eye on activities
in the states.
This article is presented for informational purposes only
and is not intended to constitute legal advice.
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One of the regulatory pillars of the EMIR is the requirement for parties to collateralize the marked-to-market exposure in over-the-counter derivatives transactions that are not cleared by a central clearing system.
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