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FinTech

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Overview

Barack Ferrazzano’s FinTech Group (FIGx) advises clients at the intersection of banking, technology, and law. Combining many decades of experience representing financial institutions with deep knowledge of emerging technologies, our attorneys represent hundreds of banks, payments companies, lenders, cryptocurrency companies, wealth managers, and other financial institutions. Marrying these unique skillsets, we help financial institutions navigate the obstacles to innovation.

We guide Banks seeking to:

  • Partner with FinTechs;
  • Launch new products or services;
  • Offer Banking-as-a-Service (BaaS);
  • Invest in BankTech;
  • Collaborate with regulators, clear regulatory hurdles and obtain approvals;
  • Obtain or divest lines of business;
  • Manage vendor relationships; and
  • Defend against litigation and regulatory enforcement actions.

We also help FinTechs to:

  • Build and implement compliance systems;
  • Obtain licenses, charters, and secure regulatory approvals;
  • Partner with banks;
  • Respond to government and regulatory inquiries;
  • Launch new products;
  • Acquire or merge with other entities; and
  • Defend against claims of wrongdoing and contractual breach.

Leveraging a combination of legal, regulatory, and in-house experience, our attorneys are highly credentialed, with deep experience and strong business acumen. As a result, we have a wealth of knowledge in crafting practical and creative solutions to difficult, unique, complex, and technology-focused issues for some of the world’s most innovative companies, including:

  • Helping a public FinTech payments company launch a cryptocurrency wallet for its millions of customers, by addressing consumer protection issues, preparing the company’s customer disclosures, designing storage, transfer, trading, fork, and other policies and procedures, and drafting third-party vendor contracts;
  • Serving as outside General Counsel to a Decentralized Finance (DeFi) cryptocurrency lending business, helping the company develop a compliant lending solution, designing and implementing a bespoke compliance program, contracting with customers and third-party lenders, providing money transmitter advice, and developing strategy to address securities issues;
  • Providing the architecture for master transaction agreements, compliance policies, and interfacing with the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN), the Office of Foreign Assets Control (OFAC), and other regulators on behalf of a service provider that offers novel cryptocurrency solutions for victims of multimillion-dollar ransomware attacks;
  • Creating a commercial lending program for a HealthTech unicorn, enabling the company to lend tens of millions of dollars to healthcare clinics and businesses;
  • Redesigning an international Fortune 500 company’s point-of-sale systems, which process millions of dollars in weekly transactions, to address open banking rules, privacy, and cybersecurity rules and regulations; and
  • Helping large community banks partner with established consumer-facing FinTechs.

FinTech-Bank Partnerships & Banking-as-a-Service (BaaS)

Whether negotiating a program management agreement, helping a client diligence potential partners, or interfacing with regulators, our attorneys help banks successfully develop, manage, and grow through FinTech partnerships or BaaS offerings. In the last few years alone, we have successfully negotiated dozens of partnerships and helped banks evaluate and launch new credit, lending, cryptocurrency, investment, and payments products and offerings. In addition to other engagements, we:

  • Created and architectured BaaS platforms for banks;
  • Negotiated and drafted multiple BaaS program management agreements;
  • Advised a bank in connection with negotiating FBO account agreements between the bank and a FinTech debt relief company;
  • Helped community banks partner with digital wallet, payments, robo-investing, credit scoring, online lending, HSA, and personal finance FinTechs;
  • Designed a large community bank's BaaS platform and private label credit card agreements;
  • Advised large online lenders in originated loans about the structure of their bank partnerships and potential “true lender” issues;
  • Advised banks with regulatory enforcement actions in connection with FinTech partnerships; and
  • Advised banks on their FinTech investments.

Cryptocurrency & Blockchain

Our attorneys have been involved in some of the largest and best-known projects in this up-and-coming industry. For over seven years, we have helped crypto entrepreneurs and established businesses navigate the crypto legal landscape, and are among the earliest crypto counsel in the country. We have helped Fortune 500 companies and FinTechs launch cryptocurrency wallets, developed crypto-focused compliance programs for banks, cryptocurrency lenders, NFT platforms, and virtual gaming companies, and have counseled dozens of crypto companies on issues ranging from international regulation to DeFi to NFTs, including:

  • Advising multiple bank and bank holding company clients in connection with offering cryptocurrency custody or other cryptocurrency products and services to customers;
  • Assisting a professional liability insurer prepare underwriting guidelines to address risks posed by cryptocurrency and cryptocurrency companies;
  • Advising pre-seed startups about the legal issues pertaining to creation of predictive markets product and DeFi protocols;
  • Counseling pre-seed startups about creating NFT marketplaces; and
  • Performing investment diligence on DeFi, token, and NFT startups for billion-dollar venture and private equity funds.

Payments

Our FIGx group is uniquely positioned to assist our clients that need to understand prepaid access, payment networks, ACH, real-time payments, digital and mobile banking, and other novel issues relating to the movement of money. We have represented payments companies and advised on cutting-edge digital, mobile, and non-traditional payments for the last three decades, including:

  • Helping a large community bank develop prepaid and reloadable open network private label products, leading to the generation of tens of millions of dollars in revenue through hundreds of customers;
  • Structuring legally-compliant merchant cash advances, earned wage access products, and income share agreements for FinTech lenders;
  • Assisting large community and regional banks with becoming funding agents on The Clearinghouse’s Real Time Payments Network; and
  • Representing international e-commerce and retail merchants in connection with multi-million dollar ACH chargeback disputes.

Compliance, Licensing, Chartering & Regulatory Counseling

FIGx attorneys help clients design, maintain, and improve their internal compliance programs to adapt to new and emerging technologies. We have helped lenders, banks, and FinTechs design everything from BSA/AML/OFAC programs to fair lending policies to comprehensive compliance management systems. We have advised banks, FinTechs, and other clients in navigating rules and regulations pertaining to:

  • ACH and real-time payments;
  • Algorithmic underwriting
  • Alternative data
  • Automated teller machines (ATMs)
  • The Bank Secrecy Act / anti-money laundering
  • Bitcoin, blockchain, and cryptocurrencies
  • Card networks and chargebacks
  • Crowdfunding
  • Cybersecurity preparedness
  • Decentralized finance (DeFi)
  • Deposit account control agreements
  • Electronic and digital signatures
  • FBO accounts
  • Funds transfers and remittances
  • Lending (commercial, consumer installment, and mortgage)
  • Loyalty and rewards programs
  • Mobile payments and wallets
  • Money transmission and money service business (MSBs)
  • Non-fungible tokens (NFTs)
  • Open banking and PSD2
  • Prepaid access
  • Privacy (PCI-DSS, GDPR, CCPA, GLBA)
  • Point-of-sale systems
  • Real-time and faster payments
  • Robo-advising
  • Treasury management
  • Third-party vendors

In addition, FIGx attorneys have helped launch over 100 de novo banks, and secured MTL, lending, and other licenses for numerous FinTech clients.

Disputes, Enforcement & Investigations

Our attorneys have represented online lenders, payments companies, and cryptocurrency companies in myriad commercial disputes, internal and government investigations, regulatory examinations, and regulatory enforcement matters. Our experience spans a wide variety of issues and regulatory agencies. We have defended clients in matters relating to true lender restrictions, the Community Reinvestment Act, privacy laws, securities laws, and alleged unfair, deceptive, or abusive acts or practices (UDAAP). Likewise, we have represented clients in front of the CFPB, FinCEN, OFAC, SEC, FTC, OCC, Federal Reserve, FDIC, and numerous state financial regulators. Among other notable engagements, we have:

  • Defended a Fortune 500 FinTech company in connection with novel tort litigation regarding alleged fraudulent payments conducted on the FinTech’s network;
  • Represented a bank in connection with a CFPB civil investigative demand relating to a Baas FinTech client;
  • Represented a cryptocurrency company in connection with inquiries and investigations by OFAC and FinCEN related to several issues of first impression concerning sanctioned entities and terrorist financing; and
  • Successfully defended multiple financial institutions against large multi-state class actions, seeking tens of millions of dollars for allegedly impermissible overdraft fees.

Our Team

Members of our FIGx Group include a National Law Journal Cryptocurrency, Blockchain, and FinTech Trailblazer and eight current or former law professors, who have taught thousands of students banking law, securities law, and FinTech law at institutions including Northwestern University Pritzker School of Law, Northwestern University’s Kellogg School of Management, Chicago-Kent College of Law, and Loyola Chicago University School of Law. In addition to former federal and state regulators, the group also includes the founder and chair of the Chicago Bar Association’s Financial and Emerging Technologies Committee, the first FinTech-focused bar committee in the United States, the former chair of the ABA’s Banking Law Committee, and a number of attorneys who write and speak on a regular basis, both in the U.S. and abroad, on various FinTech law topics.

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