#Zelle

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3 03, 2023

DAILY030323

2023-03-03T17:07:43-05:00March 3rd, 2023|2- Daily Briefing|

Senate Dems Demand Bank, Service-Provider Regulation of EWS

Regardless of recent bank changes to Zelle policy, Senate Banking Democrats yesterday sent a letter to the heads of the banking agencies urging them to examine the customer reimbursement and AML practices of banks using Zelle and for the Fed and OCC also to monitor Early Warning Services (EWS).

SEC Custody Bulletin Under Renewed Attack

Senate Banking Member Lummis (R-WY) and HFSC Chairman McHenry (R-NC) late yesterday sent a letter to top banking regulators taking serious issue with an SEC accounting bulletin requiring custodians to recognize digital assets on their balance sheets.

Biden Backs CFPB Late-Fee Proposal

President Biden today reiterated his commitment to targeting “junk fees” in a proclamation announcing this week as National Consumer Protection Week.  The statement highlights overdraft fees as unfair and endorses the CFPB’s NPR (see FSM Report CREDITCARD36) cutting credit card late fees to $8.

Daily030323.pdf

22 12, 2022

DAILY122222

2022-12-22T16:43:24-05:00December 22nd, 2022|2- Daily Briefing|

Waters Blasts ICE/BKI Merger

Although HFSC Chair Waters (D-CA) frequently opposes large-bank mergers, her stand today against the ICE/Black Knight deal is the first time we can recall her taking a public stand on a transaction before the Federal Trade Commission (outside HFSC’s jurisdiction).

Toomey Sets Agenda for GOP Fed Reform

Among his parting shots, Senate Banking Ranking Member Toomey (R-PA) yesterday introduced legislation to reform the Federal Reserve System.

Toomey Also Tries to Set Stablecoin Agenda

In another effort to set the terms of debate before he departs, Senate Banking Ranking Member Toomey (R-PA) also introduced a new version of his initial stablecoin legislation (see FSM Report CRYPTO27).

Warren Doubts Zelle’s Fraud Policy Changes

Continuing her campaign against Zelle fraud, Sen. Warren (D-MA) today sent a letter to the CEO of Zelle’s parent company demanding a briefing on pending efforts to compensate consumers for fraudulent transfers.

CFPB Cites ARM Risks, Rewards

The CFPB today issued a consumer alert describing the risks associated with various mortgage products during a period of rising interest rates.

Project Hamilton Ducks CBDC-Feasibility Decision

The Federal Reserve Bank of Boston today announced the completion of its Project Hamilton work with MIT on a U.S. CBDC.

Fed to Reconsider Key Bank-Control Criteria

Although the banking agencies today reiterated that their policy is not generally to require reporting of loans to potentially controlling principal-fund complexes or banks that meet passivity requirements, the Fed will now reconsider relevant rules in this sector.

Daily122222.pdf

15 12, 2022

DAILY121522

2022-12-15T17:13:08-05:00December 15th, 2022|2- Daily Briefing|

FinCEN Advances Beneficial-Ownership Privacy Constraints

Following its finalization of the beneficial ownership reporting rule, FinCEN today issued a notice of proposed rulemaking that would clarify how beneficial ownership information (BOI) must be acquired, used, and stored.  The proposal limits BOI access to only federal national security agencies, law enforcement authorities with a court order, financial institutions with customer due diligence requirements, and certain foreign and Treasury officials, all of which are subject to stringent security protocols aligned with the scope of the information request.

Chopra Defends Nonbank Repeat-Offender Registry, Confirms Zelle Watch-and-Wait

Today’s Senate Banking hearing repeated much of what HFSC and Director Chopra said yesterday (see Client Report CONSUMER45), with Democrats lauding the Bureau and Republicans condemning it for politicization, poor administrative process, and an unconstitutional construct. Ranking Member Toomey (R-PA) grilled Director Chopra on the Bureau’s new proposal requiring certain nonbank financial firms to report enforcement actions, asking him what he would do if a nonbank said it was compliant with a consent order and the CFPB disagreed.

Comment Deadline Extended For Controversial DSIB-Resolution Standards

Reflecting continuing controversy, the Federal Reserve Board and FDIC today announced that they will extend by one month the comment deadline for their ANPR on large bank resolvability standards.  The former deadline was December 23; the new deadline is January 23.

Daily121522.pdf

12 12, 2022

DAILY121222

2022-12-12T17:13:47-05:00December 12th, 2022|2- Daily Briefing|

FTX Hearings Promise to be Explosive but Preliminary

Our review of HFSC’s final staff memo for tomorrow’s FTX hearing confirms our forecast that it will be a lengthy, contentious affair at which Sam Bankman Fried will be raked over the coals after current management that has already excoriated him completes its testimony.  We will monitor this hearing as well as Wednesdays before Senate Banking, but we expect that policy and political implications will come clear only after Members of Congress have finished attempting to score points specific to FTX.

HFSC Previews Chopra Hearings

In addition to high-profile crypto hearings, both HFSC and Senate Banking will also have lively sessions with CFPB Director Chopra later this week as he presents his agency’s semi-annual report.

CFPB Again Targets Repeat Offenders in Nonbank Registry Proposal

Taking another shot at repeat offenders, the CFPB today proposed requiring certain nonbank financial firms to report any agency or court orders, which would then be incorporated in a public data registry to create a comprehensive and easily accessible information equivalent to that readily to be found on banking organizations.  Larger, supervised nonbanks will also be required to designate a senior executive to provide a written attestation of the firm’s compliance with covered orders.

Daily121222.pdf

7 11, 2022

DAILY110722

2022-11-07T17:22:53-05:00November 7th, 2022|2- Daily Briefing|

Toomey Calls for More Fed Transparency

Sen. Toomey (R-PA) continued Republican demands for still more Fed transparency, sharply criticizing the Fed’s Friday proposal to provide some transparency into which institutions are granted master accounts.

Sweeping CFPB Fee Restrictions Now Effective

The Federal Register today includes the CFPB’s circular on Unanticipated Overdraft Fee Assessment Practices and a bulletin now effective on Unfair Returned Deposited Item Fee Assessment Practices.

CFPB Advances Bigtech Market Power Campaign

Continuing its campaign against bigtech’s market power, the Federal Register today includes the CFPB’s notice and request for comment on what fees bigtech payment operators levy on users for violations of acceptable use policies and whether their policies include provisions to restrict user platform access.

Fed Staff Paper Tries To Gauge Social Welfare Impact Of Liquidity, Capital Regs

A new Fed staff study attempts to lay out the social costs and benefits of large-bank liquidity and capital regulation.

Warren Continues Campaign Against Wells Fargo, Zelle

Sen. Warren (D-MA) today continued her campaign against Zelle by sending letters to its parent company and Wells Fargo, taking particular aim at what she deems the latter’s failure to provide adequate claims and reimbursement data and labelling responses to previous letters “insulting.”

Warren Denounces Fed “Culture of Corruption”

Sen. Warren (D-MA) today also continued her campaign against Chairman Powell, sending him a letter alleging “another set of egregious and embarrassing ethics breaches.”

Daily110722.pdf

27 10, 2022

DAILY102722

2022-10-27T16:55:34-04:00October 27th, 2022|2- Daily Briefing|

CFPB Seeks Comment on Consumer Data Rights, Market Power

Following remarks from Director Chopra earlier this week, the CFPB today announced a formal kick-off of its consumer data-rights rulemaking.

Gruenberg Reminds Markets of TLGP Backstops at Time of Liquidity Stress

In remarks today, Acting FDIC Chairman Gruenberg stoutly defended the agency’s final rule hiking DIF premiums (see Client Report DEPOSITINSURANCE115).

Warren Reignites Anti-Zelle Campaign

In another appeal to the CFPB to tackle Zelle, Sen. Warren (D-MA) today sent a letter to Director Chopra calling on the Bureau to increase consumer protections in peer-to-peer lending platforms and curtail what she again describes as “rampant” fraud.

Democratic Pressures Grow Against Fed Rate Hikes

Adding to critiques from Sens. Brown (D-OH) and Warren (D-MA), Sen. Hickenlooper (D-CO) today called on the Fed to halt interest-rate increases.

Fed Study Details QE Alternatives, Expanded Fed Role

A new FRB staff paper explores the past, present, and future as an approach to achieving the Fed’s increasingly-problematic monetary-policy transmission: “funding for lending.”

Daily102722.pdf

25 10, 2022

DAILY102522

2022-10-25T17:08:46-04:00October 25th, 2022|2- Daily Briefing|

Setting Stage for US Action, UK Regulators Target Bigtech Consumer-Finance Market Power

Focusing principally on competition, the UK’s Financial Conduct Authority (FCA) today released a discussion paper investigating bigtech’s entry into payments, deposit, consumer-credit, and insurance.

With Yellen Backing, SEC Central-Clearing NPR Advances

The Federal Register today includes the SEC’s proposal requiring that market clearinghouses submit certain secondary-market transactions for clearing along with the small percentage now already centrally-cleared.

FDIC Reports Significant Financial Inclusion Progress

Showing significant improvements in financial inclusion, the FDIC today released its biennial under- and unbanked household survey.

CFPB to Require Almost-Open Banking

At long last and as recently promised, the CFPB later this week will start a rulemaking process that would ultimately require financial institutions to share personal data with a consumer upon his or her request.

Democrats Get Ready To Blame The Fed

Continuing progressive critiques of the FOMC’s anti-inflation fight, Senate Banking Chairman Brown (D-OH) has written to FRB Chairman Powell sharply protesting current Fed policy.

Daily102522.pdf

3 10, 2022

DAILY100322

2022-10-05T10:29:43-04:00October 3rd, 2022|2- Daily Briefing|

Gruenberg Commits to Climate-Risk Standards, Cautious on Premium Hike

Acting FDIC Chairman Gruenberg today strongly defended banking-agency action addressing climate risk, indicating that the FDIC will advance pending risk-management principles akin to those pending from the OCC (see FSM Report GREEN12) along with working with the Fed.

FRB-Chicago Study: Big U.S. Banks are Oligopolists

A new Federal Reserve Bank of Chicago working paper finds that U.S. banking has become increasingly concentrated judged by the top-five bank’s market share and a standard market-power index, concluding that this “oligopolistic” sector is thus able to charge undue fees to weaker corporate customers.

Warren Zelle Report Finds “Rampant” Fraud, Slams Banks

Following the hearing with large-bank CEOs (see Client Report REFORM213), Sen. Warren (D-MA) released a scathing report concluding that Zelle is plagued by “rampant and increasing fraud.”

Board Defies Critics, Demands Two Networks for Online Debit Transactions

Ahead of possible Congressional action on legislation to restrict credit-card interchange fees (see FSM Report INTERCHANGE10), the FRB today voted 6-1 to finalize its controversial proposal (see FSM Report INTERCHANGE8) requiring debit-card issuers to enable at least two unaffiliated payment-card networks, including with regard to “card not present” transactions.

FSOC Presses New Law, Rule, Supervisory Standards to Tackle Crypto Systemic Risk

As anticipated, the FSOC today approved a sweeping report on cryptoasset financial stability, finding that interconnectedness between this sector and the financial system poses significant risk that warrants structural action.

Daily100322.pdf

22 09, 2022

REFORM213

2022-10-12T17:04:04-04:00September 22nd, 2022|5- Client Report|

Senate Republicans Tackle Woke Banking; Democrats Turn Again to Zelle, Fees

Senate Banking’s hearing with big-bank CEOs proved much more combative than HFSC’s session yesterday (see Client Report REFORM212).  From the outset, Republican Senators condemned what they characterized as serious threats of banking politicization around social and cultural issues, with Ranking Member Toomey (R-PA) predicting a Republican counter-offensive should his party regain control.  He also said that the Fed’s decision to join other central banks and supervisors in implementing climate scenario analysis is a precursor to regulatory edicts pressuring banks to divest from energy companies.  Republicans also emphasized that high regulatory-capital requirements have undue macroeconomic effects.  As predicted, Democratic focused extensively on Zelle and bank fees.

REFORM213.pdf

21 09, 2022

DAILY092122

2022-09-27T16:31:10-04:00September 21st, 2022|2- Daily Briefing|

Liang Emphasizes Fed CBDC Views vs. Treasury Report

In remarks last night, Treasury Under-Secretary Liang took a decidedly more cautious stand on CBDC than Treasury’s recent report, emphasizing its caveats rather than over-arching conclusions.  Differing from the report (see Client Report CBDC14), she reiterated Fed concerns that CBDC might undermine financial intermediation even as the report argues that it might well not do so if nonbanks were given access to it and to instant payments.

Senate Democrats Lambast More Big Banks

Ahead of their hearing with big-bank CEOs tomorrow, Senate Banking Democrats today released additional “snapshots” similar to those published earlier this week, this time highlighting Wells Fargo and JP Morgan Chase. These “megabank” snapshots follow the same format as those for the large regional banks, providing a list of headlines highlighting not only alleged instances of consumer discrimination and abuse, but also Wells Fargo’s fake accounts scandal and JP Morgan’s oil lending practices.

Daily092122.pdf

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