Below is a summary of some of the significant legal and regulatory actions that occurred over the past week. This alert is not intended to be a comprehensive list of all such developments, but rather a selection of publicly-reported news that may be of particular interest.

U.S. Developments

OCC Proposes Rollout of a Limited-Purpose FinTech Charter
Earlier this month, the Office of the Comptroller of the Currency (OCC) released a notice of proposed rulemaking, which among other things, paves the way for the OCC’s rollout of a special purpose financial technology (FinTech) banking charter.  See  81 Fed. Reg. 62835 (proposed Sept. 13, 2016).

Under this proposed rulemaking, the OCC would be able to act as a receiver for national banking institutions that are not insured by the Federal Deposit Insurance Corporation (FDIC) (uninsured banks).  The OCC supervises very few uninsured banks, and currently, all such banks are special purpose trust banks whose operations focus on fiduciary and custodial operations.  But under federal law, the OCC may also charter other special purpose banks, so long as they conduct at least one of the three core banking functions (receiving deposits, paying checks, or lending money).   As part of its initiative on responsible banking innovation, the OCC is expressly considering “whether a special purpose charter could be an appropriate entity for the delivery of banking services in new ways,” which may include use of financial technology.  With the prospect of “fintech” special purpose banks in mind, the OCC is seeking comment on whether its proposed receivership rule would work for such banks.

The OCC invites comments on the proposed rule, which should be submitted by November 14, 2016.  OCC News Release (Sept. 13. 2016).

Congress Forms a Bipartisan Blockchain Caucus
Rep. Mick Mulvaney (R-SC) and Rep. Jared Polis (D-CO) announced the formation of a new bipartisan Congressional Blockchain Caucus on Monday, September 26, 2016.  See  Polis launches Congressional Blockchain Caucus Press Release (Sept. 26, 2016).   According to Rep. Polis’s press release, this caucus will be dedicated to advancing sound public policies related to cryptocurrencies and other blockchain-based technologies.  It will also seek to educate, engage, and provide research to help policymakers implement smart regulatory approaches to the issues raised by blockchain-based technologies and networks.

New Hampshire Commission to Study Cryptocurrency Holds First Publically Attended Meeting
New Hampshire held a public meeting Wednesday (9/28/2016) to discuss whether to move forward with regulatory action for companies that sell and exchange bitcoin and other virtual currency.  This discussion is in response, at least in part, to New Hampshire’s newly amended banking laws that included virtual currency into the banking regulatory fold as of January 1, 2016.  See  NH Revised Statutes § 399-G:1 (effective Jan. 1, 2016).  Although several companies have registered as money transmitters with the state banking department—another company has announced plans to withdraw from serving New Hampshire residents in October. See David Brooks, State’s banking regulations have NH bitcoin community rattled, Granit Geek, available at Granite Geek (posted Sept. 28, 2016). Attendees of the meeting report that most participants—including the meeting’s chairman, Representative John Hunt of Rindge—were opposed to enacting any regulations.  On the other side of the aisle, the New Hampshire Banking Department representative Maryam Torben-Desfosses, expressed support for regulation. The commission’s ultimate goal is to reach a recommendation either for or against regulation of cryptocurrency in New Hampshire.  The commission will hold its next meeting on October 6th at 10 a.m. in the Legislative Office Building in Concord, NH. Video of NH Hearing

International Developments

British Crown Dependency Channel Isle of Jersey’s Legislature Approves Plan to Regulate Digital Currency
The State Assembly in Jersey’s legislature (the largest of the Channel Islands) published a government order effective September 26, 2016 to regulate anyone operating as a digital currency exchange.  See Jersey Government Order (Sept. 23, 2016).   This legislation is designed to provide a registration system for certain service providers and to avoid a full-on licensure scheme (like the New York BitLicense).  See, e.g., Island of Jersey wishes to regulate bitcoin technology without impeding its development, CoinFox (Oct. 21, 2015), available at Coinfox.com.  The Order exempts anyone operating as a digital currency exchanger from requirements to register their business with the government if their annual business carried on by a person (“turnover”) is less than ₤150,000.  Digital currency exchanges that exceed that threshold have three months to register their business.

For a comprehensive list of developments please see our Virtual Currencies: International Actions and Regulations.