MBA State Relations Committee Update State Highlights

Advocacy News and Information From the Latest Issue of the MBA State Relations Committee Update

Council of State Government Removes California Privacy Act from Their Docket of Model State Laws for 2019
Last week, in a swift victory for MBA advocacy, the Council of State Government's (CSG) Shared State Legislation (SSL) Committee removed the California Consumer Privacy Act of 2018 (AB 375) from their 2019 Cycle Docket Book B of model state laws. Prior to the decision, MBA wrote to SSL urging them to remove AB 375 from the docket because it was a hastily developed alternative to a deeply flawed general election ballot initiative on consumer privacy and did not deserve inclusion in the CSG docket. AB 375 was drafted, passed and enacted in just over one week without a single public hearing to beat a deadline set by the sponsor of the ballot initiative. Because of the rushed natured in which AB 375 was enacted, the law required immediate amendments to prevent harm to the California economy. On August 31, the California Legislature unanimously passed SB 1121 to amend AB 375 in an effort to address technical issues with the law and prevent harmful unintended consequences to the industry's ability to provide consumers with the very financial products they request. The version of AB 375 offered in the CSG docket did not reflect any of these important changes and its exclusion from the docket will discourage states from using it as a model for state-specific laws on consumer privacy and data security. 

New York DFS Litigation Seeks to Halt OCC FinTech Charter; CSBS Reaffirms Future Commitment to Also Bring Suit In reaction to the Office of Comptroller of the Currency's (OCC) July announcement that they will begin accepting applications for a special purpose national charter for financial technology firms, Maria Vullo, Superintendent of New York State's Department of Financial Services (DFS), on Friday announced that DFS had filed suit in the U.S. District Court for the Southern District of New York (Vullo v. Office of the Comptroller of the Currency, 18-cv-8377). The suit seeks to block OCC from proceeding with the national charter for non-depository financial service providers. In her statement, the Superintendent asserts that the OCC has exceeded its authority and threatens the well-being of consumers. Also on Friday, the Conference of State Bank Supervisors (CSBS) announced that they would also challenge OCC's decision in court, but at a future time. The D.C. Circuit ruled prior litigation brought by CSBS was not yet ripe for consideration. While the SDNY ruled similarly in DFS' prior suit, the new complaint alleges that OCC's decision to begin accepting applications sufficiently addresses the issue of ripeness. During MBA's Regulatory Compliance Conference this week, senior CSBS staff reiterated their state regulator members' strong opposition to an OCC charter for FinTech firms.