In This Issue. The Consumer Financial Protection Bureau (CFPB) issued a request for information regarding the consumer complaint reporting process, marking the sixth request in a series of RFIs; the House of Representatives passed a bill to reduce the capital requirements for financial institutions; and Nasdaq proposed to amend its stockholder approval rule for private placements. These and other recent developments are covered below.
Regulatory Developments
CFPB Seeks Feedback on Consumer Complaint Reporting
The CFPB has issued a request for information seeking feedback on consumer complaint reporting. This is the sixth request in an ongoing series of RFIs designed to provide the CFPB with input on how it is fulfilling its statutory obligations and how to improve outcomes for both consumers and covered entities. The public is invited to submit comments on the usefulness of complaint reporting and analysis to external stakeholders, including financial institutions and consumers. Additionally, the CFPB is seeking suggestions or best practices for complaint reporting and publication given the CFPB’s statutory objectives and authorities. The CFPB is seeking feedback specifically on the content of its complaint reporting, reporting methodologies used and publication process.
House Passes Bill to Lessen Financial Institutions’ Capital Requirements
On February 27, the U.S. House of Representatives passed H.R. 4296, which would reduce the operational capital requirements imposed on financial institutions. The bill passed with a 245-169 vote. As could be expected from such deregulatory legislation, only 19 Democrats voted in favor of the bill and only 3 Republicans voted against it. Specifically, the legislation tightens the circumstances under which federal banking agencies can establish operational risk capital requirements for banking organizations. View the LenderLaw Watch blog post.
Client Alert: Nasdaq Proposes to Amend Stockholder Approval Rule for Private Placements
Nasdaq has proposed to amend Rule 5635(d), which generally requires shareholder approval before Nasdaq-listed companies issue common stock equal to 20% or more of outstanding shares or voting power in transactions (other than a public offering) if the issuance takes place at a price less than the greater of the book value or market value of the stock. If adopted, Rule 5635(d) as amended would redefine market value and eliminate the book value test. For more information, read the client alert issued by Goodwin’s Public Companies practice.
FinTech Flash: Virtual Currency, the New Loan Security
The most frequently asked security question around virtual currency has shifted from “Is it secure?” to “Can it be used as security?” Yes, it can, and we are seeing break-through lenders making loans to ICO platforms and others flush in virtual currency, but shy on cash, using their virtual currency as security on the loan. It makes sense to leverage virtual currency in this way, particularly if the borrower is having challenges exchanging virtual currency for fiat, believes that gains in virtual currency will outpace interest paid on the loan, or tax consequences make selling its virtual currency not a good option. For more information, read the FinTech Flash issued by Goodwin’s FinTech practice.
Client Alert: Massachusetts AG Issues Guidance on the Amended Massachusetts Equal Pay Act: Overview, Key Takeaways and Action Items
The Massachusetts Attorney General recently issued guidance concerning amendments to the Massachusetts Equal Pay Act, which will take effect on July 1, 2018. Employers of Massachusetts employees should prepare for the significant upcoming changes by reviewing hiring practices, modifying employment policies and other employment-related documents and undertaking self-evaluations of their pay practices. For more information, read the client alert issued by Goodwin’s Labor + Employment practice.
