JD Supra Finance & Banking

DOL Safe Harbor Proposed for ERISA Fiduciaries, 401(k) Investment Selection

DOL Safe Harbor Proposed for ERISA Fiduciaries, 401(k) Investment Selection

CFTC, FDIC Stablecoin Rules; Prediction Market Jurisdictional Rulings

Morrison Foerster's weekly update covers: (1) CFTC/DOJ lawsuits against Arizona, Connecticut, and Illinois seeking declaration that the Commodity Exchange Act preempts state gambling laws for CFTC-registered prediction markets; (2) FDIC's April 7 proposed rule implementing GENIUS Act requirements for FDIC-supervised payment stablecoin issuers, with comments due 60 days after Federal Register publication; and (3) White House Council of Economic Advisors research finding stablecoin yield prohibition caused $800 million net welfare loss to consumers while increasing bank lending by 0.02%.

Pay Domain Launch for Payments and Fintech Brands

ICANN is launching a new .pay generic top-level domain (gTLD) dedicated to online payment transactions. The domain will roll out in phases: Sunrise period (April-May 2026) for Trademark Clearinghouse holders, Limited Registration Period (May 2026-February 2027) for entities with approved payment processors, and General Availability (2027). Unlike most new gTLDs, .pay will not initially be covered by major domain blocking services, making direct registration the primary defensive option for brand owners in the payments and financial services sectors.

Second Circuit Vacates Asset Freeze on Loan Guarantors Under Grupo Mexicano

The U.S. Court of Appeals for the Second Circuit vacated a district court preliminary injunction that froze guarantors' assets in Leadenhall Capital Partners LLP v. Advantage Capital Holdings, LLC. Applying the Supreme Court's Grupo Mexicano rule, the Second Circuit held that federal courts lack authority to preliminarily enjoin a defendant from transferring assets absent a lien or equitable interest, even where a creditor holds security against the borrower's collateral. Lenders with unsecured guarantees from parent companies or affiliates can no longer seek asset freezes against those guarantors before final judgment.

SEC FY 2025 Enforcement Results Signal Strategic Reset

Jenner & Block analyzes the SEC's FY 2025 enforcement results and appointment of David Woodcock as Director of the Division of Enforcement. The SEC brought fewer enforcement actions but emphasized focusing on fraud, individual misconduct, and clear statutory violations. Chair Atkins criticized the prior administration's regulation-by-enforcement approach as not sufficiently grounded in federal securities laws. The announcements signal a recalibration of enforcement priorities toward cases inflicting greatest harm to investors.

California Digital Asset License Deadline July 1st

California's Digital Financial Assets Law requires digital asset businesses serving California residents to obtain a license from the DFPI by July 1, 2026. The DFPI opened its application portal on March 9, 2026 through the Nationwide Multistate Licensing System. Jenner & Block LLP analyzes the licensing requirements, exemptions, and application process for covered digital financial asset business activity.

FDIC and OCC Finalize Rule Removing Reputation Risk From Supervisory Actions

The FDIC and OCC approved a final rule on April 7, 2026, prohibiting regulators from using 'reputation risk' as a standalone basis for supervisory or enforcement actions against banks. The rule requires regulators to point to concrete, quantifiable risks such as credit, liquidity, legal, or operational risks when taking action. Banks cannot be pressured to terminate relationships with lawful businesses based purely on industry reputation. The rule takes effect 60 days after Federal Register publication.

CFPB Proposes Cutting 556 Staff While FTC Warns PayPal, Stripe, Visa, Mastercard About Debanking

The CFPB has proposed cutting its workforce to 556 employees from the current 1,100, citing funding limits in the One Big Beautiful Bill. The FTC, meanwhile, has issued warning letters to PayPal, Stripe, Visa, and Mastercard admonishing them to ensure their policies do not deny consumers access to financial products based on political views, religious views, or other First Amendment-protected activity. The FTC has also proposed a significant budget increase for its Financial Services section within the Bureau of Consumer Protection.

SEC Rule 205-3 Raises AUM to $1.4M, Net Worth to $2.7M

SEC Rule 205-3 Raises AUM to $1.4M, Net Worth to $2.7M

FY 2027 Budget Renews Pressure on CDFIs, Stay Course

The Trump administration's FY 2027 budget proposes eliminating core CDFI Fund Financial Assistance and Technical Assistance programs, redirecting approximately $100 million of the remaining $119.5 million to a new Rural Community Development Fund initiative. The more immediate concern is the administration's withholding of roughly $1 billion in already appropriated FY 2025 and FY 2026 CDFI funding pending OMB approval.