Pillsbury Lawyers Share Expectations for Banking Regulations in 2015

Having heavily criticized the banking policies that lead to consumer arbitration in place of litigation in a 2013 study, the CFPB is expected to target those practices. However, due to the Federal Arbitration Act and precedent from the Supreme Court, the extent of the agency’s power would be to label a bank’s practices as unfair, deceptive or abusive.

“That’s the hook they would use,” said Litigation partner Christine Scheuneman. “The CFPB really has signaled its hostility to consumer arbitration.”

Additionally, industry lawyers expect to see more regulatory bodies responding to widespread data breaches with tightened cybersecurity requirements for banks.

“You already see that in New York State, where the Department of Financial Services has announced its intention to crack down on the cybersecurity practices of banks,” said Global Security partner Brian Finch. “Across the board I expect to see more of that kind of activity, as agencies realize that they can impact cybersecurity behavior without waiting for legislation.”

Regulators also are expected to continue focusing on the growing world of virtual currency, which only has been governed by the Treasury Department’s Financial Crimes Enforcement Network up to now. New York has signaled its intent to release regulations subjecting virtual currency operators to licensing and consumer protection requirements early this year, and other states may follow suit.

"I think 2015 will be the year of state legislation being introduced to address digital currencies," said Intellectual Property counsel Marco Santori.