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Regulating Fintech: One Size Does Not Fit All

In December, we looked at ways fintech companies are making inroads into banking: partnering with banks to offer their services, obtaining bank charters, or seeking alternative structures such as the industrial loan company (ILC) charter. This month we are examining some of the regulatory issues that have surfaced with these new entrants. Fintech Regulation 101 Just as with banks, there is no single licensing or regulatory agency that oversees fintech companies. Depending on their activities, they can be licensed or supervised by local, state or federal regulators on a functional, or activity-based, basis. Prudential (safety and soundness) regulation and licensing are generally handled at the state level for services such as lending, money transmission and insurance. For example, PayPal, one of the oldest fintech firms, has money transmission licenses in all 50 states and has a regulator for each state or territory in which it operates.

Where s the Feedback? Commissioner Hester Peirce Wants More Comments for SEC s Query on Digital Asset Custody

March 4, 2021 @ 4:34 pm By JD Alois SEC Commissioner Hester Peirce nudged the crypto crowd a bit this week pointing out that feedback on the SEC’s request for comments on digital asset custody is paltry at best. Commissioner Peirce has long been noted for her support of innovation in financial services and a willingness to think outside the box when it comes to the emerging digital asset sector, be they securities or maybe something else. In a Tweet, Commissioner Peirce pointed to the SEC staff statements on the Wyoming Division of Banking’s “[No Action Letter] NAL on Custody of Digital Assets and Qualified Custodian Status,” as well as “Engaging on Non-DVP Custodial Practices and Digital Assets, March 12, 2019.”

John Grande Named DFI Division of Banking Administrator

  John Grande. Photo from the Wisconsin Department of Financial Institutions. John Grande as the Administrator for DFI’s Division of Banking. Grande will lead a staff of 52 employees who oversee the regulation and examination of state-chartered banks, savings institutions, and consumer financial service industries. “Throughout John’s career he successfully grew insurance programs, implemented market awareness campaigns, established management performance goals, and inspired collaboration between several business lines,” said DFI Secretary Kathy Blumenfeld. “John is an outstanding leader known for his use of facts, data, and the ability to innovate. I am confident he will do a great job leading the Division of Banking and protecting the safety and soundness of Wisconsin’s financial institutions and consumers of financial products.”

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