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Weekly Fintech Focus
The Federal Reserve seeks comment on new guidelines for Fed Regional Banks to consider when deciding whether to extend Fed membership or services to nontraditionally chartered entities.
California DFPI enters a settlement with a fintech company to stop the use of the word “bank” in its name, website URL, and advertising, and requires clear disclosure of the fintech’s bank partnership.
Federal Reserve Seeks Comments on Guidelines for Fintechs Receiving Fed Accounts and Services
The Federal Reserve System (the Fed) issued a request for comment on new guidelines for the Fed’s Regional Banks to use when considering granting access for fintech companies with banking charters to access Fed services (the Account Access Guidelines). Numerous fintech companies have pursued or are pursuing narrow charters with state banking regulators (e.g., industrial loan companies) or the Office of the Comptroller of the Currency (e.g., certain national trust charters or the
Lambda coding school accused of deceiving students out of thousands of dollars
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Lambda School, a coding academy, is the target of an arbitration claim in S.F. that lawyers say bilked students of tens of thousands of dollars with deceptive payment practices.Yalonda M. James/The Chronicle
Close to two years ago, Linh Nguyen found what she thought was her ticket to a job in tech when she enrolled in Lambda School, a San Francisco for-profit coding academy which promises students only pay tuition after they get a good-paying job.
Now she has that tech job and an ample salary to match, but with no thanks to Lambda, which allegedly lied about its job placement rates while evading state regulators and provided courses that essentially asked students to teach themselves, according to a legal complaint filed in San Francisco on Thursday.
Three students sue coding bootcamp Lambda School alleging false advertising and financial shenanigans
Lambda School has attracted a lot of attention, and raised some $130 million in venture funding from an impressive list of investors, for its novel approach to coding education: offering six-month virtual computer science courses for $30,000, with the option of paying for the courses in installments based on a sliding scale that only kicks in after you land a job that makes at least $50,000.
But it turns out that the startup is attracting a lot of controversy, too. In the latest development, three students have filed lawsuits against the company in California, claiming misleading financial and educational practices.
Federal Activities:
On May 7, the Federal Reserve Board invited public comment on proposed changes to Regulation II (debit card interchange fees and routing) to clarify that debit card issuers should enable and allow merchants to choose from at least two unaffiliated networks for card-not-present debit card transactions, such as online purchases. Additionally, the proposed revisions would clarify the responsibility of the debit card issuer. For more information, click
On May 6, the Federal Housing Administration announced new amendments to nonborrowing spouse provisions for the Home Equity Conversion Mortgage (HECM) program, implementing additional protections for spouses involved in a government-sponsored reverse mortgage. The agency details that while HECM mortgagees can begin using the new procedures immediately for all new HECMs, those electing not to do so must implement the new procedures by September 3 or 120 days after the publication of the new mortgagee letter. For more