581 FinTech Law and Policy

Updated: November 12, 2021

The Internet, the increased power of computing and new technology are driving the decentralization of all aspects of the global economy, including financial services. Today, we can surf the Internet, download apps, listen to music, shop, send money to friends and family, manage our financial accounts, and buy bitcoin – all from our smartphones.

For decades, banks had been one-stop shops for financial services. Financial technology firms (fintechs), leveraging the sharing of personal customer bank account data, have quickly emerged to unbundle aspects of financial services and rebundle them on platforms. The pace of platformization has picked up since the Global Financial Crisis of 2008, yet financial laws and regulations have not kept pace. Data protection laws were passed in the 1970s long before the advent of fintech services and products, and customer liability protections do not fully extend to nonbank-provided mobile payment transactions.

Meanwhile, money is making a leap in evolution. From commodity-based currencies to fiat-based currencies that support commercial bank money and mobile payments, we now see an emergence in cryptocurrencies beginning with Bitcoin launched in 2009. Questions about whether central banks should issue their own form of digital currency became more pressing when Facebook announced its plans in 2020 to issue a digital currency: Libra. Now central banks around the world are exploring issuing central bank digital currencies or CBDCs. These developments raise important questions of how best to design CBDCs and what kinds of personal data can be collected on users transacting in CBDCs.

New technologies such as blockchain are driving further innovation in financial services. After the advent of native cryptocurrencies like Bitcoin and Ethereum with high price volatility, stablecoins were developed with the goal of being more “stable”. However, it is uncertain under US laws or regulations if these digital assets are commodities, securities, or currency. These blockchain technologies are driving decentralization of financial services, and perhaps the largest legal and policy question of all is how should decentralized finance, or DeFi, fits in our current framework of laws and regulations.

This course aims to provide you with an understanding of legal and policy issues raised by tech-driven financial innovation. You will learn about the critical legal, regulatory, and policy issues associated with cryptocurrencies, initial coin offerings, online lending, new payments technologies, and financial account aggregators. In addition, you will learn how regulatory agencies in the U.S. are continually adjusting to the emergence of new financial technologies.

This course will be delivered online.  Students will be assessed on class participation and a 25-30 page research paper. This paper may not be used to satisfy the JD SRWP requirement without permission.  The paper will satisfy the LLM writing requirement.

Enrollment Pre-/Co- Requisite Information

Prior or current registration in a financial regulatory course (e.g., Big Bank Regulation; Securities Regulation) or permission of the instructors.

Course Areas of Practice
Evaluation Methods
  • Research paper, 25+ pages
  • Class participation
Degree Requirements
Course Type
  • Lecture
Learning Outcomes
  • Knowledge and understanding of substantive and procedural law

Sample Syllabi

Spring 2022

2022
Course Number Course Credits Evaluation Method Instructor Meeting Days/Times Room

581.01 2
  • Research paper, 25+ pages
  • Class participation
Linda Jeng, Greg Xethalis W 7:00-9:00 PM Online
Updated: November 12, 2021

The Internet, the increased power of computing and new technology are driving the decentralization of all aspects of the global economy, including financial services. Today, we can surf the Internet, download apps, listen to music, shop, send money to friends and family, manage our financial accounts, and buy bitcoin – all from our smartphones.

For decades, banks had been one-stop shops for financial services. Financial technology firms (fintechs), leveraging the sharing of personal customer bank account data, have quickly emerged to unbundle aspects of financial services and rebundle them on platforms. The pace of platformization has picked up since the Global Financial Crisis of 2008, yet financial laws and regulations have not kept pace. Data protection laws were passed in the 1970s long before the advent of fintech services and products, and customer liability protections do not fully extend to nonbank-provided mobile payment transactions.

Meanwhile, money is making a leap in evolution. From commodity-based currencies to fiat-based currencies that support commercial bank money and mobile payments, we now see an emergence in cryptocurrencies beginning with Bitcoin launched in 2009. Questions about whether central banks should issue their own form of digital currency became more pressing when Facebook announced its plans in 2020 to issue a digital currency: Libra. Now central banks around the world are exploring issuing central bank digital currencies or CBDCs. These developments raise important questions of how best to design CBDCs and what kinds of personal data can be collected on users transacting in CBDCs.

New technologies such as blockchain are driving further innovation in financial services. After the advent of native cryptocurrencies like Bitcoin and Ethereum with high price volatility, stablecoins were developed with the goal of being more “stable”. However, it is uncertain under US laws or regulations if these digital assets are commodities, securities, or currency. These blockchain technologies are driving decentralization of financial services, and perhaps the largest legal and policy question of all is how should decentralized finance, or DeFi, fits in our current framework of laws and regulations.

This course aims to provide you with an understanding of legal and policy issues raised by tech-driven financial innovation. You will learn about the critical legal, regulatory, and policy issues associated with cryptocurrencies, initial coin offerings, online lending, new payments technologies, and financial account aggregators. In addition, you will learn how regulatory agencies in the U.S. are continually adjusting to the emergence of new financial technologies.

This course will be delivered online.  Students will be assessed on class participation and a 25-30 page research paper. This paper may not be used to satisfy the JD SRWP requirement without permission.  The paper will satisfy the LLM writing requirement.

Pre/Co-requisites

Prior or current registration in a financial regulatory course (e.g., Big Bank Regulation; Securities Regulation) or permission of the instructors.

Fall 2020

2020
Course Number Course Credits Evaluation Method Instructor Meeting Days/Times Room

581.01 3
  • Research paper, 25+ pages
  • Oral presentation
  • Class participation
Lee Reiners Tu/Th 2:00 PM-3:25 PM

In 2016, few people had ever heard of Bitcoin or blockchain, initial coin offerings were non-existent, and U.S. financial regulatory agencies had yet to react to the emergence of non-bank financial services providers. The FinTech industry has changed dramatically since then: Bitcoin has captured the public imagination and spawned new derivatives products, central banks are considering launching their own digital currency, you can apply for a mortgage on your smartphone, and the Office of the Comptroller of the Currency proposed a new kind of bank charter specifically for FinTech firms. While many have focused on the technologies underpinning the FinTech revolution, less attention has been placed on how these technologies fit within the current financial regulatory framework. Understanding this framework is critical to the long-term success of any FinTech startup. While technology startups in other sectors may predicate their business on breaking rules and ignoring regulations, such a strategy is sure to fail if deployed by a FinTech firm. This is because the financial industry is heavily regulated by multiple state and federal agencies that often have overlapping authority. Being a successful FinTech firm requires more than just great technology; it also requires an understanding of the laws and regulations applicable to your business.

This course aims to provide you with that understanding. You will learn about the critical legal, regulatory, and policy issues associated with cryptocurrencies, initial coin offerings, online lending, new payments and wealth management technologies, and financial account aggregators. In addition, you will learn how regulatory agencies in the U.S. are continually adjusting to the emergence of new financial technologies and how one specific agency, the Office of the Comptroller of the Currency, proposed a path for FinTech firms to become regulated banks. The course will also address the role FinTech has played during the pandemic; from FinTech lenders administering small business loans, to a Congressional proposal to administer stimulus payments through Federal Reserve digital wallets.  You will also learn the basics of how banks are regulated in the U.S.

If you are unfamiliar with how these new financial technologies work, fear not. We will begin each new course section with a high-level overview of the underlying technology.

Due to the pandemic, course content will be delivered online, but in person office hours will be held for those interested. Class participation will remain a required and graded component of the course. To help facilitate class participation, each student will be required to deliver a company profile presentation during the semester. In addition, each student, as part of a team, will deliver a presentation related to an assigned case study. Class participation will account for 40% of your grade and a final paper will make up the remaining 60%.

Pre/Co-requisites

Prior or current registration in a financial regulatory course (e.g., Big Bank Regulation; Securities Regulation). Please discuss with instructors if you think your prior course might be eligible

Fall 2019

2019
Course Number Course Credits Evaluation Method Instructor Meeting Days/Times Room

581.01 3
  • Research paper, 25+ pages
  • Oral presentation
  • Class participation
Lee Reiners Tu/Th 2:00-3:25 PM 3000

In 2016, few people had ever heard of Bitcoin or blockchain, initial coin offerings were non-existent, and U.S. financial regulatory agencies had yet to react to the emergence of non-bank financial services providers. The FinTech industry has changed dramatically since then: Bitcoin has captured the public imagination and spawned new derivatives products, you can now apply for a mortgage on your smartphone, initial coin offerings are now a viable alternative to venture capital funding, and the Office of the Comptroller of the Currency has proposed a new kind of bank charter specifically for FinTech firms.While many have focused on the technologies underpinning the FinTech revolution, less attention has been placed on how these technologies fit within the current financial regulatory framework. Understanding this framework is critical to the long-term success of any FinTech startup. While technology startups in other sectors may predicate their business on breaking rules and ignoring regulations, such a strategy is sure to fail if deployed by a FinTech firm. This is because the financial industry is heavily regulated by multiple state and federal agencies that often have overlapping authority. Being a successful FinTech firm requires more than just great technology; it also requires an understanding of the laws and regulations applicable to your business.

This course aims to provide you with that understanding. You will learn about the critical legal, regulatory, and policy issues associated with cryptocurrencies, initial coin offerings, online lending, new payments and wealth management technologies, and financial account aggregators. In addition, you will learn how regulatory agencies in the U.S. are continually adjusting to the emergence of new financial technologies and how one specific agency, the Office of the Comptroller of the Currency, has proposed a path for FinTech firms to become regulated banks. You will also learn the basics of how banks are regulated in the U.S.

If you are unfamiliar with how these new financial technologies work, fear not. We will begin each new course section with a high-level overview of the underlying technology.

Pre/Co-requisites

Prior or current registration in a financial regulatory course (e.g., Big Bank Regulation; Securities Regulation). Please discuss with instructors if you think your prior course might be eligible

Fall 2018

2018
Course Number Course Credits Evaluation Method Instructor Meeting Days/Times Room

581.01 3
  • Research paper, 25+ pages
  • Oral presentation
  • Class participation
Lee Reiners Tu/Th 2:00-3:25 PM 3000

In 2016, few people had ever heard of Bitcoin or blockchain, initial coin offerings were non-existent, and U.S. financial regulatory agencies had yet to react to the emergence of non-bank financial services providers. The FinTech industry has changed dramatically since then: Bitcoin has captured the public imagination and spawned new derivatives products, you can now apply for a mortgage on your smartphone, initial coin offerings are now a viable alternative to venture capital funding, and the Office of the Comptroller of the Currency has proposed a new kind of bank charter specifically for FinTech firms.While many have focused on the technologies underpinning the FinTech revolution, less attention has been placed on how these technologies fit within the current financial regulatory framework. Understanding this framework is critical to the long-term success of any FinTech startup. While technology startups in other sectors may predicate their business on breaking rules and ignoring regulations, such a strategy is sure to fail if deployed by a FinTech firm. This is because the financial industry is heavily regulated by multiple state and federal agencies that often have overlapping authority. Being a successful FinTech firm requires more than just great technology; it also requires an understanding of the laws and regulations applicable to your business.

This course aims to provide you with that understanding. You will learn about the critical legal, regulatory, and policy issues associated with cryptocurrencies, initial coin offerings, online lending, new payments and wealth management technologies, and financial account aggregators. In addition, you will learn how regulatory agencies in the U.S. are continually adjusting to the emergence of new financial technologies and how one specific agency, the Office of the Comptroller of the Currency, has proposed a path for FinTech firms to become regulated banks. You will also learn the basics of how banks are regulated in the U.S.

If you are unfamiliar with how these new financial technologies work, fear not. We will begin each new course section with a high-level overview of the underlying technology.

Syllabus: 581.01.Fall2018-syllabus.docx34.22 KB

Pre/Co-requisites

Prior or current registration in a financial regulatory course (e.g., Big Bank Regulation; Securities Regulation). Please discuss with instructors if you think your prior course might be eligible

Fall 2017

2017
Course Number Course Credits Evaluation Method Instructor Meeting Days/Times Room

581.01 2
  • Research paper, 25+ pages
  • Oral presentation
  • Class participation
Lee Reiners W 8:30-10:20 AM 2211 (Fite Room)

Financial services have been dramatically impacted by the deep technology revolution. Transactions, including payments and trading, have become almost instantaneous, validated by electronic signatures. Financial services are available anywhere, anytime, accessible from cards or devices in customer pockets.  As a result of all this "electronification," traditional bank "back rooms" and old-fashioned trading pits have disappeared, to be replaced by "clouds," iPhones, infrared beams, and so on.  Customer data, once safe in the hands of bankers, is now frequently compromised in massive electronic breaches.  We have no way of knowing whether state agencies or criminals now hold this information in their possession.  Seldom do financial firms attempt to deliver services on their own anymore; instead the end result is the result of behind-the-scenes collaboration among numerous market participants, the quality and capabilities of which varies widely.  It is a world of the future present, with which we are only starting to come to grips. The automation of financial services is also having an impact on regulators: the newly emerging concept of 'RegTech,' which focuses on how regulatory monitoring and assessment can themselves be automated, has been given a huge boost with the recent acquisition by IBM of The Promontory Interfinancial group, bringing the immense artificial intelligence power of "Watson" to bear on regulatory assessment and decision making

FinTech and the Law will review the origins of these developments.  We will seek to understand the architectures, principal legal and regulatory issues, and the dynamics of modern financial marketplaces as these are shaped by technology.  The seminar will help prepare students for a rapidly evolving framework in which successful business and legal practice must become technologically "bilingual."

The course is a seminar based on a compilation of readings provided during the course.  Enrollment is strictly limited to 12 students.

Pre/Co-requisites

Prior or current registration in a financial regulatory course (e.g., Big Bank Regulation; Securities Regulation). Please discuss with instructors if you think your prior course might be eligible

Spring 2017

2017
Course Number Course Credits Evaluation Method Instructor Meeting Days/Times Room

581.01 2
  • Research paper, 25+ pages
  • Oral presentation
  • Class participation
Lawrence G. Baxter, Lee Reiners Tu 10:30-12:20 PM 4046

Financial services have been dramatically impacted by the deep technology revolution. Transactions, including payments and trading, have become almost instantaneous, validated by electronic signatures. Financial services are available anywhere, anytime, accessible from cards or devices in customer pockets.  As a result of all this "electronification," traditional bank "back rooms" and old-fashioned trading pits have disappeared, to be replaced by "clouds," iPhones, infrared beams, and so on.  Customer data, once safe in the hands of bankers, is now frequently compromised in massive electronic breaches.  We have no way of knowing whether state agencies or criminals now hold this information in their possession.  Seldom do financial firms attempt to deliver services on their own anymore; instead the end result is the result of behind-the-scenes collaboration among numerous market participants, the quality and capabilities of which varies widely.  It is a world of the future present, with which we are only starting to come to grips. The automation of financial services is also having an impact on regulators: the newly emerging concept of 'RegTech,' which focuses on how regulatory monitoring and assessment can themselves be automated, has been given a huge boost with the recent acquisition by IBM of The Promontory Interfinancial group, bringing the immense artificial intelligence power of "Watson" to bear on regulatory assessment and decision making

FinTech and the Law will review the origins of these developments.  We will seek to understand the architectures, principal legal and regulatory issues, and the dynamics of modern financial marketplaces as these are shaped by technology.  The seminar will help prepare students for a rapidly evolving framework in which successful business and legal practice must become technologically "bilingual."

The course is a seminar based on a compilation of readings provided during the course.  Enrollment is strictly limited to 12 students.

Pre/Co-requisites

Prior or current registration in a financial regulatory course (e.g., Big Bank Regulation; Securities Regulation). Please discuss with instructors if you think your prior course might be eligible

Spring 2016

2016
Course Number Course Credits Evaluation Method Instructor Meeting Days/Times Room

581.01 2 Lawrence G. Baxter Tu 1:45-3:35 PM 4046

Financial services have been dramatically impacted by the deep technology revolution. Transactions, including payments and trading, have become almost instantaneous, validated by electronic signatures. Financial services are available anywhere, anytime, accessible from cards or devices in customer pockets.  As a result of all this "electronification," traditional bank "back rooms" and old-fashioned trading pits have disappeared, to be replaced by "clouds," iPhones, infrared beams, and so on.  Customer data, once safe in the hands of bankers, is now frequently compromised in massive electronic breaches.  We have no way of knowing whether state agencies or criminals now hold this information in their possession.  Seldom do financial firms attempt to deliver services on their own anymore; instead the end result is the result of behind-the-scenes collaboration among numerous market participants, the quality and capabilities of which varies widely.  It is a world of the future present, with which we are only starting to come to grips.

FinTech and the Law will review the origins of these developments.  We will seek to understand the architectures, principal legal and regulatory issues, and the dynamics of modern financial marketplaces as these are shaped by technology.  The seminar will help prepare students for a rapidly evolving framework in which successful business and legal practice must become technologically "bilingual."

The course is a seminar based on a compilation of readings provided during the course.  Enrollment is strictly limited to 12 students.

Pre/Co-requisites

Students must have completed either Big Banking Regulation or Securities Regulation as a prerequisite.  Each student will be required to undertake a substantial research assignment, prepare a detailed and up-to-date reading list of the results of the research, and write a memo (30 pages) for oral presentation to the class at the appropriate time.  JD writing credit will be available to the first five students who present research proposals, approved by the instructor, complete paper drafts by Wednesday March 9 for grading and comments, and submit their final drafts in response to comments by last day of classes (when all papers will be due).

*Please note that this information is for planning purposes only, and should not be relied upon for the schedule for a given semester. Faculty leaves and sabbaticals, as well as other curriculum considerations, will sometimes affect when a course may be offered.