Resources to help you navigate the changing regulatory landscape

Humans illustration.

DFPI: Digital Assets, Crypto Kiosks, New Laws, & Overdraft Income

Credit union regulatory, operations, and compliance professionals can read up on the latest Monthly Bulletin published by the California Department of Financial Protection and Innovation (DFPI).

Invitation for Comment for the Digital Financial Assets Law
The DFPI is seeking public comment prior to engaging in formal rulemaking for the new Digital Financial Assets Law (DFAL). The law was enacted on Oct. 13, 2023, when Governor Gavin Newsom signed into law AB 39 and SB 401.

The DFAL provides the DFPI with rulemaking authority and an 18-month delayed operative date to ensure the adopted regulatory framework can be thoughtfully tailored to address industry trends and mitigate consumer harm. As a result, DFPI is engaging in the rulemaking process to further the implementation of the DFAL.

The DFPI seeks public comment on topics related to the DFAL license application, licensure requirements, and stablecoin approval. The Commissioner invites interested parties to submit comments by Jan. 12, 2024.

Prior to the comment deadline, the DFPI will host a virtual informal listening session with stakeholders to discuss feedback on this informal invitation for comments on Jan. 8, 2024. Interested parties should email regulations@dfpi.ca.gov with the subject line “DFAL Listening Session RSVP” for an invitation to attend. The DFPI anticipates issuing invitations for comment on additional topics in the future.

Credit unions are exempt from licensure requirements; however, any third-party vendors or credit union service organizations (CUSOs) affiliated with a credit union engaged in digital asset activities must comply with the specified requirements.

Cryptocurrency Kiosk Regulations
The DFPI has published information for crypto kiosk operators regarding the upcoming Jan. 1, 2024, requirements as mandated by the passage of SB 401. An operator is defined as a person who owns, operates, or manages a digital financial asset transaction kiosk located in this state.

Beginning Jan. 1, 2024, a kiosk operator must provide the Department with a list of all kiosk locations that an operator owns, operates, or manages in the state. Additionally, by Jan. 1, 2024, an operator (1) may not dispense or accept more than $1,000 in a day to or from a customer via kiosks and (2) must provide a customer with a receipt with specified information for any transaction made at the operator’s kiosk.

Credit unions, or their credit union service organizations (CUSOs) engaged in digital asset activities specific to a cryptocurrency kiosk would be subject to these requirements.

New State Laws that May Affect DFPI Licensees
Highlights of 2023 Chaptered Legislation, a compendium of new state laws that may affect or be of interest to DFPI licensees, is now available on the Department’s website. The collection includes a brief description and a link to the text of each bill.

In addition to AB 39 and SB 401, known as the Digital Financial Assets Law, significant new laws this year include AB 386 (Nguyen) on financial privacy and AB 1116 (Grayson) on money transmitters.

The California Credit Union League is preparing a detailed legislative summary that will be available soon. Please see the League’s 2023 Impact Report (advocacy section) for more information.

Credit Unions to Report Fee Income from NSF and Overdraft Charges
Financial Code section 521 requires state-chartered credit unions to report annually to the Department of Financial Protection and Innovation (DFPI) the revenue they received from fees on non-sufficient funds (NSF) and overdraft charges during the calendar year. These reports are due by Mar. 1, 2024, so the DFPI can publish the information on its website by Mar. 31, 2024.

On Dec. 29, the DFPI will send an email with a report link to the designated email address of each reporting institution.

Please refer to the frequently-asked-questions (FAQs) or email Kim-Phuong Hoang at kim-phuong.hoang@dfpi.ca.gov for more information.

Financial Education Webinar on December 20
The DFPI hosts a free monthly consumer financial education webinar exploring a new topic every month. Each webinar includes guest speakers and a Q&A session. Watch past financial education webinars on the DFPI’s YouTube channel.

The topic for this month’s webinar is End-of-Year Financial Planning, hosted on Wednesday, Dec. 20 at 12 p.m.

In this webinar, learn more about the decisions and strategies that can positively impact your financial well-being for the next year and beyond. Topics of discussion will include tax planning, charitable giving and donations, budgeting for the oncoming year, estate planning, and more! Register and share this free webinar!

Access the ‘Compliance Hotline’
Your League-member benefits include the Compliance Hotline — providing exclusive access to dedicated compliance experts:

Using the above phone number and email address, you can gain access to a knowledgeable team that’s ready to address all your credit union’s compliance inquiries — promptly and efficiently. With the Compliance Hotline, you can proactively respond to impromptu questions and issues by getting clarity and insight on technical topics that normally slow you down. We want to help you unlock the full potential of your League membership by leveraging the resources and support you need to navigate the complex world of compliance effortlessly. We’re ALWAYS just a phone call or email away!

Additionally, other League-member compliance resources include:

  • ViClarity
  • CU PolicyPro
  • ComplySight
  • InfoSight
  • CU Store
  • Record Retention Guide
  • GRC Technology Solutions

For more information, email Lisa Quaranta.

Powered by ViClarity, a California and Nevada Credit Union Leagues company.

News Posts

Become an Industry Supporter

Get membership information

Please contact me about compliance

Contact me about Credit Union Solutions

Education & Professional Development