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New and Newsworthy
January 19, 2023

Several important developments in recent days caught our attention. 

To no one's surprise, crypto was in the news. My white collar and defense colleague Christian Larson, one of our firm leaders on AML, provides an important update on what U.S. regulators are doing with regard to AML compliance within the crypto industry. 

In other important news, my fellow Washington, DC partner Mercedes Tunstall writes that the CFPB continues to look very closely at arbitration clauses in consumer financial services, and now the battle with Congress has intensified with a new CFPB-proposed rule. My UK partner Alix Prentice examines the Prudential Regulation Authority's plans for implementing Basel 3.1 standards for calculating risk-weighted assets. And I write about Acting Comptroller of the Currency Michael Hsu's views on "too-big-to-manage" (TBTM). 

Any comments or questions? Just drop me a note here.

Daniel Meade 
Editor, Cabinet News and Views

Partner | Financial Regulation

Acting Comptroller of the Currency Michael Hsu delivered remarks at the Brookings Institution yesterday in which he addressed and offered a possible solution to the too-big-to-manage problem. 

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Associate | White Collar Defense and Investigations

In recent weeks, U.S. regulators and legislators have taken several actions to push the crypto industry toward a broader and more fulsome adoption of anti-money laundering controls.

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Partner | Financial Regulation

The Consumer Financial Protection Bureau issued a proposed rule last week addressing the “Registry of Supervised Nonbanks that Use Form Contracts to Impose Terms and Conditions that Seek to Waive or Limit Consumer Legal Protections.” The CFPB has a long history battling against the use of arbitration clauses in consumer financial services, and issued a final rule regarding their use in 2017. However, Congress intervened and issued a joint resolution disapproving of the arbitration agreement rule, pursuant to the Congressional Review Act, rendering the final rule null and void, with no force or effect.

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Partner | Consumer Financial Services Enforcement and Litigation

The Consumer Financial Bureau issued new guidance opining that two common bank deposit fees − “authorize positive, settle negative” overdraft fees and return deposited items fees − constitute unfair practices, even if disclosed to the consumer. The CFPB’s guidance, described in this article, is significant for all depository institutions but especially those that rely on deposit fee revenue.

Read the article in New Jersey Bankers Association Magazine here.

Partner | Financial Regulation

In CP16/22 (published on 30 November 2022), the UK’s Prudential Regulation Authority sets out plans for implementing the Basel 3.1 standards for calculating risk-weighted assets. Concerned that downward movement in average risk weights (measured by the ratio of RWA to assets) over the last 10 years is due to fairly pervasive underestimation in internally-modelled risk, the PRA is proposing to align with international standards and implement the final Basel 3 package of significant changes to the way firms calculate RWA.

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Maurine R. Bartlett
Senior Counsel
T. +1 212 504 6218
maurine.bartlett@cwt.com

Brian Foster
Partner
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James Frazier
Partner
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Mark Howe
Partner
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Gregg Jubin
Partner
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Philip S. Khinda
Partner
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Ivan Loncar
Partner
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Peter Y. Malyshev
Partner
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peter.malyshev@cwt.com

Daniel Meade
Partner
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Jed Miller
Partner
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Michael Newell
Partner
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Alix Prentice
Partner
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Rachel Rodman
Partner
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Richard M. Schetman
Senior Counsel
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Lary Stromfeld
Partner
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Jonathan M. Wainwright
Senior Counsel
T. +1 212 504 6122
jonathan.wainwright@cwt.com

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