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15 08, 2022

DAILY081522

2023-01-04T12:03:15-05:00August 15th, 2022|2- Daily Briefing|

FDIC Study Finds Changing Assessment Rates Had Procyclical Effects During the Financial Crisis

A new FDIC staff study tackles an immediate concern in the wake of the FDIC’s proposal to raise DIF premiums (see FSM Report DEPOSITINSURANCE114): procyclicality.  In what its authors describe as one of the first studies to provide large-scale empirical evidence on deposit insurance’s procyclical effects, this model-driven study looks at the effect of changing deposit insurance assessment rates during the period between 2009 and 2011.  Using credit unions as a control group, it finds a 1.6 percent decrease in bank lending after a 7 bp increase in the assessment rate and a 0.3 increase after a 5-10 bp rate decrease.

Fed Tries to Sooth Payment-Access Critics with New Policy

Doubtless reflecting all the political pressure it’s under regarding payment-system access, the FRB today not only finalized its payment-system access rules, but also made sure to use an e-mail subject line containing the release that these rules are “transparent, risk-based, and consistent.”  The board also states that the final standards are consistent with both its 2021 proposal (see FSM Report PAYMENT22) and the 2022 “supplemental” proposal (see FSM Report PAYMENT24) even though the supplemental was considerably more detailed than the initial attempt to give the Reserve Banks broad discretion without the appearance of inconsistent or even insider decision-making.

Daily081522.pdf

25 07, 2022

DAILY072522

2023-01-04T15:47:24-05:00July 25th, 2022|2- Daily Briefing|

Stablecoin Bill Still in Limbo

As we noted last week, the fate of stablecoin legislation at this week’s HFSC mark-up has been uncertain.  The committee staff memo today does not include a bill in this area; it is our understanding that negotiations continue on a draft amenable to both Chairwoman Waters (D-CA) and Ranking Member McHenry (R-NC).

OCC Seeks Fintech, Nonbank Analyses

The OCC today calls for academic and policy-focused papers on the impact of fintech and nonbanks on banking and the markets for lending, deposit-taking, and payment services.  This sweeping inquiry is designed to inform the agency as policy continues to take shape in these high-profile areas, with the announcement today providing no insight into whether these papers – which will doubtless come also from trade associations and other advocacy groups – will do more than provide a symposium’s worth of discussion.

Stablecoin Rules – or Lack Thereof – Likely to Remain

As noted in media this afternoon, HFSC will in fact not mark up a stablecoin bill on Wednesday.  Instead, some staff indicate that a discussion draft will be released so that the process of crafting a bill can continue in August in hopes of a September vote.  However, even if one were to occur, the odds of legislation in this Congress are slim to none at so late a date in the absence of any meaningful Senate Banking action in this arena.

Daily072522.pdf

16 06, 2022

FedFin On: Big-Bank Consumer Service

2023-01-26T13:35:54-05:00June 16th, 2022|The Vault|

Combining some of its outstanding initiatives and adding new ones, the CFPB is seeking information on how well larger banks and credit unions serve consumers and what steps may be needed to make them do better.  The focus of the inquiry is response time, content, and methodology following consumer inquiries based on provisions in the agency’s mandate allowing it to require that banks with assets over $10 billion and their affiliates provide timely responses to consumer requests for information about their accounts.  This was included in the Dodd-Frank Act because of ….

The full report is available to retainer clients. To find out how you can sign up for the service, click here and here.…

16 06, 2022

CONSUMER43

2023-01-26T13:35:49-05:00June 16th, 2022|1- Financial Services Management|

Big-Bank Consumer Service

Combining some of its outstanding initiatives and adding new ones, the CFPB is seeking information on how well larger banks and credit unions serve consumers and what steps may be needed to make them do better.  The focus of the inquiry is response time, content, and methodology following consumer inquiries based on provisions in the agency’s mandate allowing it to require that banks with assets over $10 billion and their affiliates provide timely responses to consumer requests for information about their accounts.  This was included in the Dodd-Frank Act because of many instances in which borrowers had so much difficulty finding out about their mortgages that foreclosure loomed or even occurred.  The Bureau is now inferring a broader rationale for these requirements:  the need to preserve relationship banking via the “human touch” rapid responses ensure so that high-quality banking services are readily available in all markets, including those characterized as “banking deserts.”

CONSUMER43.pdf

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