Florida governor announces initiative to attract FinTech companies

Florida officials have launched an effort designed to encourage the start, relocation, and expansion of financial technology (FinTech) companies within the state.© Shutterstock Florida Gov. Ron DeSantis made the announcement Monday with Chief Financial Officer (CFO) Jimmy Patronis, Department of Economic Opportunity (DEO) Executive Director Ken Lawson, Mayor Lenny Curry and business and community leaders […]

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Florida officials have launched an effort designed to encourage the start, relocation, and expansion of financial technology (FinTech) companies within the state.

© Shutterstock

Florida Gov. Ron DeSantis made the announcement Monday with Chief Financial Officer (CFO) Jimmy Patronis, Department of Economic Opportunity (DEO) Executive Director Ken Lawson, Mayor Lenny Curry and business and community leaders from the Jacksonville area.

“From day one, we’ve made it a priority to create a regulatory environment that provides opportunities for businesses in the financial technology and banking sectors to thrive without being impeded by high taxes and burdensome regulation,” DeSantis said. “The initiatives demonstrate that we are committed to making Florida the top destination for FinTech companies to grow and succeed.”

DeSantis is directing DEO and Enterprise Florida, Inc. (EFI) to expedite the review of Florida Job Growth Grant Fund proposals providing workforce training programs in the financial services industry, with a focus on FinTech skills training; DeSantis and Patronis announced they plan to pursue legislation to create a regulatory sandbox for FinTech companies in Florida; and DeSantis and Patronis revealed the Office of Financial Regulation (OFR) is a signatory of the American Consumer Financial Innovation Network (ACFIN) – adding the purpose of this coalition is to facilitate consumer-driven innovation in markets for financial products and services through increased coordination among federal and state officials.

“I’m proud to partner with Governor DeSantis today as we are focused on fostering an environment to support growth and innovation here in Florida through FinTech,” Patronis said. “We must ensure common-sense regulations are put in place to guarantee a stable market that protects consumers. To the global financial system—the Sunshine State is open for business.”

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NY State passes bill to extend statute of limitations to investigate financial crimes

New York Gov. Andrew Cuomo signed into law a bill that is designed to increase New York’s capacity to prosecute financial fraud relating to stocks, bonds, and other securities. © Shutterstock Specifically, the bill, (S.6536/A.8318), restores the six-year statute of limitations under the Martin Act, allowing New York to protect investors and hold companies accountable […]

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New York Gov. Andrew Cuomo signed into law a bill that is designed to increase New York’s capacity to prosecute financial fraud relating to stocks, bonds, and other securities.

© Shutterstock

Specifically, the bill, (S.6536/A.8318), restores the six-year statute of limitations under the Martin Act, allowing New York to protect investors and hold companies accountable for fraudulent activity.

“At a time when the Trump administration is hell-bent on rolling back consumer financial protections, New York remains dedicated to preventing and prosecuting fraudulent financial activity,” Cuomo said. “By restoring the six-year statute of limitations under the Martin Act, we are enhancing one of the state’s most powerful tools to prosecute financial fraud so we can hold more bad actors accountable, protect investors and achieve a fairer New York for all.”

Previously, the Martin Act mandated a six-year statute of limitations, but the Court of Appeals overturned this precedent in a ruling, reducing the statute of limitations to only three years. By restoring the statute of limitations to six years, the bill gives the Office of the Attorney General to investigate cases of fraud.

“If Main Street has to play by a set of rules, then so must Wall Street. This law strengthens two of our most critical tools in holding corporate greed accountable and delivering justice for victims of financial fraud. As the federal government continues to abdicate its role of protecting investors and consumers, this law is particularly important. New York remains committed to finding and prosecuting the bad actors that rob victims and destabilize markets,” Attorney General Letitia James said.

The bill was introduced in the State Senate by N.Y. Sen Michael Gianaris and in the State Assembly by Rep. Robert Carrol.

“The Martin Act is one of the most powerful tools in the state’s toolbox to prosecute financial fraud and protect consumers and investors. This six-year timeline brings New York in line with most other state’s and will help ensure that Wall Street’s bad actors will be brought to justice by giving the Attorney General and others the necessary time to investigate these complex crimes,” Carrol said.

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Comptroller of the Currency visits New York neighborhoods

Community Reinvestment Act (CRA) activity and discussions regarding how regulations promote lending, investment, and services took center stage during Comptroller of the Currency Joseph Otting’s tour of New York neighborhoods. Joseph Otting More than 50 community advocates, community development professionals, civil rights organizations and bankers joined Otting and senior staff from the agency on the […]

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Community Reinvestment Act (CRA) activity and discussions regarding how regulations promote lending, investment, and services took center stage during Comptroller of the Currency Joseph Otting’s tour of New York neighborhoods.

Joseph Otting

More than 50 community advocates, community development professionals, civil rights organizations and bankers joined Otting and senior staff from the agency on the third tour this summer of CRA neighborhoods and CRA modernization discussion.

“Here in New York, we saw great examples of community and bank partnerships to conduct CRA activity that helps meet important needs of underserved neighborhoods,” Otting said following the tour. “We also discussed challenges communities, advocates, and bankers face in lending, investing, and providing services that can be addressed in part by modernizing CRA regulations.”

During the tour, Otting outlined how CRA regulations could be improved in four ways: clarifying what counts for CRA credit, updating where activity qualifies, making evaluations of bank CRA performance more objective, and reporting results in a more timely and transparent manner.

“I thank everyone who has participated on this and other tours for sharing their stories, ideas, and frustrations,” Otting said. “I am encouraged by this discussion and the half dozen others we have had this summer with hundreds of stakeholders about CRA. The conversations confirm broad support for making CRA work better for everyone, for clarifying what activity counts for CRA, updating where it counts, evaluating CRA performance in a more transparent way, and making reporting more timely and transparent.”

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Read more / Original news source: https://financialregnews.com/comptroller-of-the-currency-visits-new-york-neighborhoods/

NY leads multistate probe of payroll advance industry

New York’s Department of Financial Services (DFS) said last week it is leading a multistate investigation of the payroll advance industry as a means of examining unlawful online lending allegations.© ShutterstockLinda A. Lacewell “High-cost payroll loans are scrutinized closely in New York, and this investigation will help determine whether these payroll advance practices are usurious […]

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New York’s Department of Financial Services (DFS) said last week it is leading a multistate investigation of the payroll advance industry as a means of examining unlawful online lending allegations.

© Shutterstock
Linda A. Lacewell

“High-cost payroll loans are scrutinized closely in New York, and this investigation will help determine whether these payroll advance practices are usurious and harming consumers,” Financial Services Superintendent Linda A. Lacewell said. “Protecting consumers is our top priority and New York is leading the charge to expand the investigation of illegal online lending by including regulators from ten additional states and Puerto Rico.”

Lacewell said the agency would also partner with peer regulators to safeguard consumers from predatory lending and scams ensnaring families in endless cycles of debt.

The scope of work, officials said, is rooted in determining whether companies are in violation of state banking laws, including usury limits, licensing laws and other applicable laws regulating payday lending and consumer protection laws.

The following regulators have joined DFS in investigating the payroll advance industry:

Connecticut Department of Banking;
Illinois Department of Financial Professional Regulation;
The Office of the Commissioner for Financial Regulation in the State of Maryland;
New Jersey Department of Banking and Insurance;
North Carolina Office of the Commissioner of Banks;
North Dakota Department of Financial Institutions;
Oklahoma Department of Consumer Credit;
Puerto Rico Comisionado de Instituciones Financieras;
South Carolina Department of Consumer Affairs;
South Dakota Department of Labor and Regulation’s Division of Banking; and
Texas Office of Consumer Credit Commissioner.

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Read more / Original news source: https://financialregnews.com/ny-leads-multistate-probe-of-payroll-advance-industry/

IRI urges Massachusetts to delay implementation of state fiduciary rule

The Insured Retirement Institute (IRI) is urging the Massachusetts Securities Division to delay action on a proposed state regulation governing professional financial advice to consumers.© Shutterstock The Massachusetts Securities Division is seeking comment on a regulation to apply a fiduciary conduct standard on broker-dealers, agents, investment advisers, and investment adviser representatives when dealing with customers […]

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The Insured Retirement Institute (IRI) is urging the Massachusetts Securities Division to delay action on a proposed state regulation governing professional financial advice to consumers.

© Shutterstock

The Massachusetts Securities Division is seeking comment on a regulation to apply a fiduciary conduct standard on broker-dealers, agents, investment advisers, and investment adviser representatives when dealing with customers and clients. The standard requires that recommendations and advice be made in the best interest of customers and clients without regard to the interests of the broker-dealer or advisory firm. It allows for the payment of transaction-based remuneration.

It is similar to the U.S. Department of Labor’s Fiduciary Rule, which was overturned and replaced with the SEC Regulation Best Interest. State officials say the SEC’s Regulation Best Interest fails to define the key term “best interest,” and sets ambiguous requirements for how conflicts in the securities industry must be addressed under the new rule. They say it also fails to indicate whether some of the most problematic practices in the securities industry would be prohibited under the new rule.

“In many instances, it appears that the mitigation of conflicts required under the SEC Regulation Best Interest can be accomplished through disclosure, including disclosure via the new Customer Relationship Summary,” MSD officials state. “This approach contradicts years of data gathered by studies and reports on disclosure and the conduct standards applicable to broker-dealers.”

IRI, which represents the retirement income industry, said the state should wait to see if the new Regulation Best Interest rule leaves any gaps in investor protections. IRI asserts that Regulation Best Interest will address the state’s concerns. Further, IRI called the Massachusetts proposal inconsistent and incompatible with the SEC rules. Further, the group called the proposal “misguided,” adding that it could make it more difficult for some financial services firms to do business in the state.

“For the Division to create a separate regulatory structure that destroys the distinction between brokerage and advisory services is, at its best, misguided, and at worst, contrary to and incompatible with the Final SEC Rules,” Jason Berkowitz, IRI chief legal and regulatory affairs officer, wrote in a comment letter to the Mass Securities Division. “By rejecting the SEC’s approach, the Division threatens to create a regulatory labyrinth for broker dealers (BDs) offering services in Massachusetts. BDs will not only have to comply with the Final SEC Rules but also the Division’s more expansive and inconsistent rules.”

Berkowitz added that there are several vague and confusing elements to the rule.

“The proposed rule includes a number of open-ended, ill-defined and unworkable provisions would make it nearly impossible for broker-dealers to know with any degree of certainty that they are complying with the rule,” Berkowitz said. He added that the proposal’s duty of loyalty provision creates an “impossible” standard” for broker dealers and should be revised. Also, he called the duty of loyalty provision “among the most problematic and unworkable aspects of the proposal.”

IRI also warned that the Massachusetts rule could be pre-empted because it is in direct conflict with the SEC’s regulation best interest.

“The Proposal would undermine the SEC’s attempt to create a federal standard for broker-dealers to follow when making personalized investment recommendations to retail customers,” Berkowitz said. “Allowing each state to promulgate separate and potentially inconsistent standards for broker-dealers would create a patchwork regulatory structure that would be detrimental to investors and to the industry.”

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Read more / Original news source: https://financialregnews.com/iri-urges-massachusetts-to-delay-implementation-of-state-fiduciary-rule/

Rep. Lowey, NY State leaders urge Congress to eliminate SALT cap

U.S. Rep. Nita Lowey (D-NY), along with New York State leaders, are urging the House Committee on Ways and Means to eliminate the cap on the state and local tax (SALT) deduction.© Shutterstock The cap was instituted as part of the Tax Cuts and Jobs Act of 2017. Before that, New York taxpayers could deduct […]

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U.S. Rep. Nita Lowey (D-NY), along with New York State leaders, are urging the House Committee on Ways and Means to eliminate the cap on the state and local tax (SALT) deduction.

© Shutterstock

The cap was instituted as part of the Tax Cuts and Jobs Act of 2017. Before that, New York taxpayers could deduct their state and local property and income taxes. The SALT deduction was a major relief for high-taxed states like New York, where 35 percent of taxpayers deduct an average of more than $22,000 every year.

The Tax Cuts and Jobs Act (TCJA), however, capped the SALT deduction at $10,000.

“Simply put, the cap on SALT deductions is an insult to New York’s residents and businesses that send more revenue to the federal government than our state receives back in federal support,” Lowey said. “Specifically, the Tax Cuts and Jobs Act (TCJA)’s cap unfairly burdens Westchester and Rockland taxpayers, who in 2017 ranked numbers one and two for highest average property taxes in the country. Seventeen months after enactment, the TCJA is not paying for itself, as many Republicans promised, and it is not boosting the economy. Outside of these disturbing but not surprising developments, taxpayers in states like New York are struggling to manage serious ramifications from the $10,000 cap on the SALT deduction.”

Lowey, along with Westchester County Executive George Latimer; Town of North Castle Supervisor Michael Schiliro; and the Hudson Gateway Association of Realtors (HGAR) submitted written testimony to the Ways and Means asking for the cap to be eliminated.

“As municipal government and school district leaders work to meet community needs in a fiscally responsible way, we would appreciate the partnership of the federal government, not the imposition of double taxation,” Latimer said. “As the County Executive for Westchester County New York, I want to express my strong opposition to the federal limits on SALT deductions, and my strong support for the repeal of this limitation. In Westchester County, more than 47 percent of residents itemize their federal tax deductions with an average of $34,300 in deductions, well above both the cap and the new standard deduction. However, federal law now caps the SALT deduction at $10,000. This results in double taxation on the same income, and effectively raises taxes on thousands of middle-class and working families in Westchester who depended on the deduction.”

Lowey introduced a bill earlier this year with Rep. Peter King (R-NY) to eliminate the SALT cap.

“The SALT deduction caps have been felt in our community, and time will tell how that will impact future investment and renovations in single-family homes,” Schiliro said. “There has been continued downward pricing pressure on all segments of the existing housing market, as buyers know that the deductibility of real estate taxes is now extremely limited, if not eliminated.”

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Read more / Original news source: https://financialregnews.com/rep-lowey-ny-state-leaders-urge-congress-to-eliminate-salt-cap/

SIFMA offers dissenting view of NJ fiduciary rule

The Securities Industry and Financial Markets Association (SIFMA) is offering a dissenting opinion regarding New Jersey’s proposed rule to create a state fiduciary standard.© Shutterstock “To best protect investors and avoid investor confusion, the optimal approach is to defer to the uniform, nationwide, heightened, best interest standard for broker-dealers which is embodied in the SEC’s […]

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The Securities Industry and Financial Markets Association (SIFMA) is offering a dissenting opinion regarding New Jersey’s proposed rule to create a state fiduciary standard.

© Shutterstock

“To best protect investors and avoid investor confusion, the optimal approach is to defer to the uniform, nationwide, heightened, best interest standard for broker-dealers which is embodied in the SEC’s now final Reg BI,” SIFMA officials wrote in their letter to the New Jersey Bureau of Securities. “A state-by-state approach, on the other hand, would result in an uneven patchwork of laws that would be duplicative of, different than, and possibly in conflict with federal standards. It would also heighten investor confusion. We urge the Bureau to pause its rulemaking process, review Reg BI and reevaluate its proposal before deciding whether it is necessary to proceed with an additional state regulation.”

The correspondence also addressed potential broader negative consequences for the state in the wake of its industry footprint.

“The finance and insurance industry has roughly 200,000 employees in the state of New Jersey and accounts for almost 5 percent of all employment in the state,” the letter stated. “Every dollar spent in the securities industry in New Jersey generates an additional $1.22 for the state economy and every job in the securities industry generates an additional 1.34 jobs statewide.”

It is the SIFMA’s position the plan would represent a fundamental change in the way the securities sector operates in the state and would fundamentally alter its relationship with millions of New Jersey investors.

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Read more / Original news source: https://financialregnews.com/sifma-offers-dissenting-view-of-nj-fiduciary-rule/

Erin Schneider named director of regional SEC office

The Securities and Exchange Commission (SEC) has selected Erin E. Schneider to lead its San Francisco Regional Office.© ShutterstockErin Schneider Schneider, who joined the SEC staff in 2005 as a staff attorney in the San Francisco office, will serve as director, leading a staff of more than 125 enforcement attorneys, accountants, investigators, and compliance examiners. […]

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The Securities and Exchange Commission (SEC) has selected Erin E. Schneider to lead its San Francisco Regional Office.

© Shutterstock
Erin Schneider

Schneider, who joined the SEC staff in 2005 as a staff attorney in the San Francisco office, will serve as director, leading a staff of more than 125 enforcement attorneys, accountants, investigators, and compliance examiners.

“We are looking forward to working with Erin in her new position, and we are confident that under her leadership the San Francisco Regional Office will continue its track record of bringing complex enforcement actions,” Stephanie Avakian, co-director of the SEC’s Division of Enforcement, said.

Schneider was promoted to Assistant Regional Director of the Enforcement Division’s Asset Management Unit in 2012 and then to Associate Regional Director of the San Francisco office in 2015.

She will lead a staff involved in the investigation and prosecution of enforcement actions and the performance of compliance inspections in the Northern California and Pacific Northwest region.

“I am pleased that Erin has agreed to take on the important role of leading the talented and dedicated group of women and men in our San Francisco Regional Office,” SEC Chairman Jay Clayton said. “For nearly 15 years, Erin has worked tirelessly with her colleagues in San Francisco and across the Commission to protect our markets and our Main Street investors. Her skills as a leader and extensive experience, including in issues relevant in the Silicon Valley region, will serve the Commission and investors well.”

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Read more / Original news source: https://financialregnews.com/erin-schneider-named-director-of-regional-sec-office/

Maryland Insurance Administration targets industry fraud

Maryland Insurance Administration (MIA) will continue to investigate and prosecute individuals and businesses committing insurance fraud, the administration recently announced. © Shutterstock During the first half of 2018, MIA investigations led to the criminal prosecution of 12 people for committing insurance fraud while the agency issued another 25 civil fraud orders. The enforcement efforts resulted […]

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Maryland Insurance Administration (MIA) will continue to investigate and prosecute individuals and businesses committing insurance fraud, the administration recently announced.

© Shutterstock

During the first half of 2018, MIA investigations led to the criminal prosecution of 12 people for committing insurance fraud while the agency issued another 25 civil fraud orders.

The enforcement efforts resulted in a combined total of $68,092 in fines and penalties, officials said, as well as $146,400 in restitution to insurance carriers impacted by the fraudulent activity.

“Our talented Insurance Fraud staff follows up and investigates every confidential tip received, and we want the public to report all suspected insurance fraud to us,” Insurance Commissioner Al Redmer, Jr. said. “The MIA’s efforts to root out fraud have resulted in fines, penalties, and restitution in excess of $2 million over the past several years. Our investigations have led to criminal convictions and jail time as well.”

Officials said anyone suspecting insurance fraud is encouraged to call the MIA’s Fraud Division hotline at 1-800-846-4069 or email a referral form to fraud-referrals.mia@maryland.gov.

MIA is an independent body charged with enforcing insurance laws and regulations, officials said. Its Fraud Division is staffed by former law enforcement officers and prosecutors who investigate reports of fraudulent activity related to insurance matters.

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Read more / Original news source: https://financialregnews.com/maryland-insurance-administration-targets-industry-fraud/