Payments, Deposits & Deposit Insurance

Bank customers won’t switch to stablecoins. They’ll switch to software that uses stablecoins. That’s one reason stablecoins’ impact on bank deposits is so hard to predict. The main drivers aren’t going to be customer preferences for one form of money over another. They’ll be the contingent factors that shape developer adoption -- more like the dynamics that drive which software platforms or frameworks take off. Some big unknowns: ❓What will be the “killer apps” for blockchain-based payments? ❓Which financial infrastructure stacks will early builders pick when making architectural decisions?...

As fintechs work on GENIUS Act stablecoin strategies, one thing is becoming clear: The Act offers the equivalent of a national money transmission license for many previously non-crypto use cases. It could come to displace the traditional state money transmission licenses for many fintechs. This realization has partly sunk in with the trade associations and advocacy organizations that wrote Congress last week requesting repeal of the GENIUS Act's Section 16(d), which grants nationwide money transmitter powers to state depository institutions that own permitted payment stablecoin issuers. But...

Does the Senate Finance Committee have something against thrifts? Thrifts were inexplicably left out of an exception to the proposed tax on remittance transfers in the Senate Finance draft of title VII of the Big Beautiful Bill. The language exempts transfers that are withdrawn from an account in a financial institution "which is described in subparagraph (A), (B), (C), (D), (E), (G), or (H) of section 5312(a)(2) of title 31, United States Code...." This language references the following subparagraphs in the Bank Secrecy Act's definition of "financial institution" (conspicuously skipping...

On September 17th, the FDIC issued a notice of proposed rulemaking (NPR or Proposed Rule) that would impose on FDIC-insured depository institutions (IDIs) new recordkeeping requirements for custodial deposit accounts with transactional features. Comments are due 60 days after publication in the Federal Register. In addition to inviting comments on all aspects of the Proposed Rule, the FDIC requests comments on specific questions (see attached). The Proposed Rule is partially in response to the bankruptcy of Synapse, a technology company that worked with several IDIs and fintech companies....

We advise banks, fintechs, mortgage companies and others on regulatory compliance across the full spectrum of consumer protection and prudential requirements. Our regulatory practice covers consumer compliance (TILA, RESPA, UDAP/UDAAP, FCRA, HMDA, fair lending), safety and soundness issues, payments rules, and regulatory change management. We help clients understand the impact of new regulations, build compliance programs, and maintain comprehensive regulatory inventories. Services provided by the Regulation & Compliance practice include: Capital Analysis: We assess treatment of assets,...

We assist financial institutions and fintechs with charter strategy, regulatory applications, and transactions, including bank-fintech partnerships and acquisitions. Our practice covers the full range of licensing options including commercial bank charters, ILC charters, trust bank charters, and money transmission licenses. We prepare regulatory applications, conduct due diligence on acquisition targets, advise on control issues under the Bank Holding Company Act, Bank Merger Act, and Change in Bank Control Act, and help structure bank-fintech partnerships to address regulatory expectations....

Our fintech work spans regulatory, strategic, and policy engagements for a diverse range of payment ecosystem participants and digital lenders. Our lawyers have experience working with both traditional and innovative institutions, including: retail and commercial payments and lending fintechs (including buy-now-pay-later providers), fintech banks and neobanks, prepaid program managers and issuers, money transmitters, finance companies, crypto and digital asset service providers, payment processors, payment system infrastructure operators, and payments and credit units of technology companies....

BJ Sanford advises payments and fintech companies, U.S. and foreign banks, trade associations, investors, and policy and consulting firms. His practice centers on payments regulation, public policy, and the regulation of bank activities and structure. He also advises clients on regulatory capital, bank investments and control, affiliate transactions, the U.S. operations of foreign banks, and regulatory examinations. Payments regulation. BJ advises payments firms and banks on payment regulation, product development, and compliance with rules including Regulation E, Regulation Z, Regulation II...