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 FDIC Seeks Comments on Proposed Handbook for De Novo Institutions

On December 22nd the Federal Deposit Insurance Corporation (FDIC) issued a press release inviting comments on a proposed Handbook for De Novo Institutions Applying for Deposit Insurance.  The Handbook aims to provide guidance for navigating the complex insurance application process.  FDIC Chairman Martin J. Gruenberg expressed the critical role played by new entrants, stating that “de novo institutions add vitality to our local banking markets, providing credit and services to communities that may be overlooked by larger institutions.”  In particular, the FDIC seeks comments as to whether the handbook (i) provides sufficient clarity and transparency to the process, (ii) adequately addresses the application requirements, processes and procedures, and (iii) appropriately addresses the information needs of bankers and non-bankers alike.  Comments may be submitted to between now and February 20, 2017.

Washington State Introduces Bill to Amend the Uniform Money Services Act

The Washington Department of Financial Institutions (“DFI”) introduced House Bill 1045 on December 15 proposing amendments to the Washington Uniform Money Services Act (“UMSA”).  The proposed bill adds a definition of “virtual currency” to the UMSA, carving out blockchain applications in which the token itself is not used as a medium of exchange.  If the proposal passes, Washington will be the first state to draw a clear statutory distinction between non-financial blockchain applications and digital currencies.  In addition, the bill includes a provision alleviating the burdensome obligation to hold capital reserves (i.e., “permissible investments”) in dollar-denominated investments, requiring that companies dealing in digital currencies hold “like-kind virtual currencies of the same volume as that held [on behalf of customers].”

Besides the digital currency provisions, the proposal includes a payment-processor exemption and a payroll exemption.  Currently, Washington offers a payment-processor waiver program. For more information about this, please click here.

North Dakota Proposes Amendments to its Money Transmitter Act

On January 4th the North Dakota legislature introduced Senate Bill 2100, proposing limited amendments to the Money Transmitter Act, including a definition to “virtual currency” that is substantially similar to the definition adopted by the Georgia legislature in 2016.  In addition, the bill proposes regulating “maintaining control of virtual currency on behalf of others” as money transmission.   For a comprehensive list of developments please see our Virtual Currencies: International Actions and Regulations.