#Zelle – Federal Financial Analytics

15 02, 2024

DAILY021524

Eliza Allen2024-02-15T17:13:22-05:00February 15th, 2024|2- Daily Briefing|

Bowman Focuses on Inclusive Cross-Border Payments

FRB Gov. Bowman today emphasized that national and global payment-system improvements must not only work for the financial system and payment providers, but also for end-users and broader inclusive growth. This is a policy challenge that, she said, cannot be resolved only by technology.

Senate Dems Resume Attack on Zelle

Retreating from his stand during a recent hearing that seemed to absolve Zelle (see Client Report PAYMENT28), Senate Banking Chairman Brown, (D-OH) along with Sens. Warren (D-MA) and Reed (D-RI), today sent a letter reiterating calls for Zelle to clarify its reimbursement policy for impostor scams. The letter also demands that Zelle revise its reimbursement policy to cover other scams and to and streamline its reporting process, demanding a new public commitment to doing so.

Waller Sees Impregnable Dollar Dominance

FRB Gov. Waller today mounted a strong defense not only of the dollar as the globe’s reserve currency under current conditions, but also even as digital currencies become more widely deployed. This stand is consistent with those at the FRB opposing proposals in Congress to advance a CBDC on grounds that it is essential to preserve reserve-currency status (see FSM Report CBDC10) and signals no interest in the U.S. central bank to making any other payment-system changes to press sanctions policy with the dollar’s dominance in mind.

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14 12, 2023

DAILY121423

Arezou Rafikian2023-12-15T17:22:54-05:00December 14th, 2023|2- Daily Briefing|

Top Senate Democrats Heighten Payment App Scrutiny

Continuing to shift their focus from Zelle to payment-service providers, Senate Banking Chairman Brown (D-OH) along with Sens. Reed (D-RI) and Warren (D-MA) today sent letters to Paypal and CashApp urging them to adopt new scam-reimbursement policies.

Treasury Defends Russian Sanctions, Economic-Warfare Clout

Facing increasing assertions that U.S.-led sanctions are not meaningfully affecting Russia, Treasury today issued a blog stoutly defending sanctions effectiveness.

Reed Presses OFR to Subpoena Shadow-Bank Data

The principal sponsor of the Dodd-Frank provisions creating the Office of Financial Research, Sen. Jack Reed (D-RI), today defended the agency on grounds that it lacks a confirmed director, promising to push the appointment on the floor as quickly as possible.

Basel Targets Stablecoin Reserve-Asset Risk

Moving forward with “targeted” changes to current standards, the Basel Committee today outlined revisions to its crypto standards with significant practical implications.

Liang Disputes Over-Arching Need for New AI Regs

Treasury Under Secretary Liang today argued that AI is not fundamentally different than other financial innovations and is already subject to existing consumer-protection, safety-and-soundness, illicit-finance, and financial-stability guardrails.

FRB-NY Official Highlights AI Promise, Problems, Policy Action

Summarizing a recent Federal Reserve Bank of New York AI conference, the Bank’s chief risk officer, Mihaela Nistor, concluded that AI can now identify GSIB and GSIFI risk due to its ability to detect tail behavior not now captured by relevant models.

Democrats Urge CFPB to Take Second Stand Against Forced Arbitration

Sens. Warren (D-MA) and Sanders (I-VT) were today …

3 03, 2023

DAILY030323

Eliza Allen2023-03-03T17:07:43-05:00March 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.

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22 12, 2022

DAILY122222

Eliza Allen2022-12-22T16:43:24-05:00December 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.

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15 12, 2022

DAILY121522

Eliza Allen2022-12-15T17:13:08-05:00December 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.

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12 12, 2022

DAILY121222

Eliza Allen2022-12-12T17:13:47-05:00December 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.

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7 11, 2022

DAILY110722

Eliza Allen2022-11-07T17:22:53-05:00November 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.”

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27 10, 2022

DAILY102722

Eliza Allen2022-10-27T16:55:34-04:00October 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.”

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25 10, 2022

DAILY102522

Eliza Allen2022-10-25T17:08:46-04:00October 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.

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3 10, 2022

DAILY100322

Eliza Allen2022-10-05T10:29:43-04:00October 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.

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