FDIC’s Advisory on Deposit Insurance and Crypto Companies

Adam Witmer
Regulatory Update

On July 29, 2022, the FDIC issued a Financial Institution Letter (FIL) to address certain misrepresentations about FDIC deposit insurance by some crypto companies. Through the FIL, the FDIC issued an Advisory to FDIC-insured institutions to address misconceptions about the scope of deposit insurance coverage and related concerns. The FDIC also published in its website a Fact Sheet to clarify for customers of non-bank entities, such as crypto companies, and the public generally, that deposit insurance does not cover non-deposit products, including crypto assets.

FDIC and Federal Reserve Order Voyager to Cease False Representations of Deposit Insurance Status

Adam Witmer
Regulatory Update

On July 28, 2022, the FDIC and the Federal Reserve Board issued a joint letter demanding that the crypto brokerage firm Voyager Digital cease and desist from making false and misleading statements concerning the company’s FDIC deposit insurance status and take immediate corrective action to address these false statements. The FDIC is authorized to implement the Federal Deposit Insurance Act which prohibits any person from representing or implying that an uninsured deposit is insured or from knowingly misrepresenting the extent and manner in which a deposit liability, obligation, certificate, or share is insured under the Act.

CFPB Fines U.S. Bank $37.5 Million for Illegal Data Exploitation

Adam Witmer
FCRA, Regulatory Update

On July 28, 2022, the CFPB took action against U.S. Bank for illegally accessing its customers’ credit reports and opening checking and savings accounts, credit cards, and lines of credit without customers’ permission. According to the CFPB, U.S. Bank pressured and incentivized its employees to sell multiple products and services to its customers leading to employees unlawfully accessing customers’ credit reports and sensitive personal data to apply for and open unauthorized accounts.

VIDEO: Redisclosing the Closing Disclosure

VIDEO: Redisclosing the Closing Disclosure

Adam Witmer
Regulation Z

In this Compliance Clip (video), Adam answers the question on whether or not you are required to provide the consumer with a corrected Closing Disclosure within three business days if there is a change to the initial Closing Disclosure. The answer to this question comes from Regulation Z. A transcript of this vide is now available.

CFPB and DOJ Files Complaint Against Trident for Discrimination Against Minority Families

Adam Witmer
Regulatory Update, Fair Lending

On July 27, 2022, the CFPB and DOJ took action to end Trident Mortgage Company’s intentional discrimination against families living in majority-minority neighborhoods in the greater Philadelphia area. The CFPB and DOJ allege Trident redlined majority-minority neighborhoods through its marketing, sales, and hiring actions. If entered by the court, the settlement would require Trident to pay a $4 million civil penalty to the CFPB for victims’ relief fund.

FATF Updates Guidance for the Real Estate Sector

Adam Witmer
Regulatory Update

On July 26, 2022, the FATF updated its Risk-Based Approach Guidance for the Real Estate Sector which outlines the principles and benefits of adopting a risk-based approach to tackling money laundering and terrorist financing in the real estate sector. The revised guidance highlights the importance for the sector to increase its understanding of the money laundering and terrorist financing risks it faces.

Proposed Rule on Advertising Endorsements and Testimonials

Adam Witmer
Regulatory Update

On July 26, 2022, the FTC published a proposed rule and is seeking public comment on the proposed revisions to its Guides Concerning the Use of Endorsements and Testimonials in Advertising. The Guides are designed to assist businesses and others in conforming their endorsement and testimonial advertising practices to the requirements of section 5 of the FTC Act, also known as “Unfair or Deceptive Acts or Practices”.

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