The Society for Worldwide Interbank Financial Telecommunication, or SWIFT, provides an organizational platform for facilitating international payments.  U.S. and foreign financial institutions use SWIFT messages to initiate, process, receive, and settle payment orders.  The amount of information exchanged via SWIFT is immense.  More than 9,000 financial institutions in 209 countries rely on SWIFT to process international payments, and an average of 17,000,000 SWIFT messages are sent in a given day.  SWIFT messages contain sensitive financial information about consumers, businesses, and governments and for that reason raise unique financial privacy concerns.

In recent years, governments such as the United States have obtained access to the SWIFT database, including transactions involving citizens as well as foreign residents, in order to combat terrorism.  However, certain countries have criticized and pushed back against such access out of concerns for their citizens’ privacy.  In 2010, the United States and European Union reached an agreement whereby SWIFT message information will be made available only for the purpose of preventing, detecting, and prosecuting terrorism and only upon a showing that such information is necessary.

More broadly, the Dodd-Frank Act provides for Federal Reserve supervision of systemically important payment and settlement activities, and it is generally expected that the international payments system will receive more attention from regulators in the future.  For instance, recent Treasury rulemakings have requested further comment on the subject of non-U.S. payment and settlement providers. 

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Photo of Mike Nonaka Mike Nonaka

Michael Nonaka is co-chair of the Financial Services Group and advises banks, financial services providers, fintech companies, and commercial companies on a broad range of compliance, enforcement, transactional, and legislative matters.

He specializes in providing advice relating to federal and state licensing and…

Michael Nonaka is co-chair of the Financial Services Group and advises banks, financial services providers, fintech companies, and commercial companies on a broad range of compliance, enforcement, transactional, and legislative matters.

He specializes in providing advice relating to federal and state licensing and applications matters for banks and other financial institutions, the development of partnerships and platforms to provide innovative financial products and services, and a broad range of compliance areas such as anti-money laundering, financial privacy, cybersecurity, and consumer protection. He also works closely with banks and their directors and senior leadership teams on sensitive supervisory and strategic matters.

Mike plays an active role in the firm’s Fintech Initiative and works with a number of banks, lending companies, money transmitters, payments firms, technology companies, and service providers on innovative technologies such as bitcoin and other cryptocurrencies, blockchain, big data, cloud computing, same day payments, and online lending. He has assisted numerous banks and fintech companies with the launch of innovative deposit and loan products, technology services, and cryptocurrency-related products and services.

Mike has advised a number of clients on compliance with TILA, ECOA, TISA, HMDA, FCRA, EFTA, GLBA, FDCPA, CRA, BSA, USA PATRIOT Act, FTC Act, Reg. K, Reg. O, Reg. W, Reg. Y, state money transmitter laws, state licensed lender laws, state unclaimed property laws, state prepaid access laws, and other federal and state laws and regulations.