TFU | Oct. 22-28

Leading Off

The CSBS re-filed its lawsuit against the OCC, challenging its proposed “fintech charter”; the FDIC is creating an internal office of innovation to support bank fintech efforts; Coinbase was approved to be a qualified custodian in New York State; Apple CEO Tim Cook decried the “data-industrial complex” and suggested an openness to U.S. federal data privacy regulation; Cathay Pacific and British Airways disclosed new details about data breaches of their systems; and IBM is acquiring enterprise Linux giant Red Hat for a reported $33 billion.

 

In the News

CSBS refiles suit against OCC.  The Conference of State Bank Supervisors (CSBS) submitted a new challenge to the Office of the Comptroller of the Currency’s (OCC) “fintech charter,” after its original 2017 lawsuit was dismissed for lack of ripeness. “CSBS is calling on the courts to stop the [OCC’s] unlawful, unwarranted expansion of powers,” CSBS president and CEO John Ryan wrote.

FDIC to establish office of innovation.  The Federal Deposit Insurance Corp. (FDIC) plans to set up an “office of innovation” to support banks considering new technologies and services. FDIC Chairman Jelena McWilliams said the U.S. regulatory framework has “discouraged banks from innovating for a number of years,” and the new office will aim to support the safe implementation of new innovations.

Coinbase approved by NY to be qualified custodian.  The New York Department of Financial Services (DFS) granted the crypto exchange’s application to form a limited purpose trust company, through which it may offer custody services for a variety of digital currencies. Coinbase Custody Trust Company LLC will be a “Qualified Custodian” in New York state, with regulatory oversight from the DFS.

Apple CEO condemns “Data-Industrial Complex.” Apple CEO Tim Cook said that individuals’ personal information has been “weaponized” and issued a call for U.S. federal data protection regulation in the vein the EU’s General Data Protection Regulation. Cook’s comments underscore his efforts to insulate Apple from its competitors, like Google and Facebook, that are dealing with ongoing privacy scandals.

“UltraFICO” earns plaudits, raises privacy concerns.  FICO’s new credit score, which includes a consumer’s cash flow next to his or her credit score has been praised for including new data that could give consumers previously denied credit another shot at obtaining it. However, industry observers have also flagged concerns about giving credit bureaus “unfettered access to bank account data.”

Once more into the breach… Two airlines revealed more data breaches last week: Cathay Pacific disclosed that it detected suspicious activity on its site in March, confirming in May a data breach that affected 9.4 million user accounts. Meanwhile, British Airways’ investigation into its previously reported breach revealed that the financial data of an additional 185,000 customers was breached.

IBM to acquire Red Hat for ~$33B.  The global tech giant reached an agreement to purchase the open source enterprise software firm for about $33 billion in cash and debt, IBM’s biggest acquisition ever. The deal is expected to support IBM’s push into cloud computing and “services that help companies bridge different platforms.” CEO Ginni Rometty called the deal “an inflection point” for her company.

JPMorgan announces data sharing agreement with Plaid.  Plaid accesses customer data through APIs without storing passwords and usernames, allowing JPMorgan’s customers to more easily push their banking data to third-party apps. The deal represents a shift in the bank’s policy toward fintech; CEO Jamie Dimon previously has complained that fintechs take more data from banks than they need.

Sweden’s central bank plans ‘e-krona’ project.  The bank announced that next year it will undertake a project “to develop a tested and ready e‐krona,” as well as explore the legal changes required to introduce a central bank-backed digital currency. The bank’s board is still to approve the project. Sweden has rapidly moved to a e-payments country, largely phasing out cash payments.

German central bank completes blockchain trials.  The Deutsche Bundesbank, in collaboration with Deutsche Börse, completed its trials for the settlement of “securities transactions, payments (including interest) and bond repayments at maturity” using blockchain. A Bundesbank press release said the prototypes “facilitated the productive operation of a realistic financial market infrastructure.”

Investors given false information about Bitmain funding. An investigation by CoinDesk found that parties solicited to invest in Bitmain’s IPO were given pitch decks that falsely suggested it had secured financial backing from Digital Sky Technologies Global and GIC Private Limited. The source of the false information is unclear, but many have accused Bitmain itself of spreading the false claims.

 

 

 

 

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