Digital Article Repository: Regulatory Story Archive

Week of February 11, 2022

Filene Outlines ODP Best Practices in an Ever-changing Environment

Overdraft protection programs (ODP) have been under increased scrutiny in the wake of the pandemic and grabbing headlines as large banks, such as Capital One, pledge an end to overdraft fees and publicize significant revenue losses to bring “humanity to banking.” (Forbes 2021)

Additionally, in December 2021, the CFPB explored ongoing concerns on the impacts of overdraft fees by publishing their research demonstrating the revenue three large banks (JPMorgan Chase, Wells Fargo, and Bank of America) brought in as a result of collecting on these fees.

Credit unions, who have a consistent history of helping those in the most need, particularly with lower incomes and weaker credit histories, will need to adjust to stay competitive in the marketplace.

How should credit unions and regulators approach this changing dynamic?

The Filene Research Institute took this challenge head-on and examines best practices for credit unions rethinking noninterest income sources as well as the consumer behaviors that contribute to competitive entities (fintechs) increasing market share. Their guidance features key findings and takeaways from 16 in-depth interviews with credit union leaders on the forefront of reimaging a solution that works for everyone.

This analysis outlines:

  • ODP user demographics and characteristics
  • Action steps for credit unions to protect their members and bottom line
  • Defines the goal: “understand the most vulnerable member and proactively diversify sources of noninterest income.”

 For more information, read Filene’s Study “Overdraft Protection Programs: Credit Union Best Practices.”

Related: NASCUS’s Summary on CFPB 2022-0003: Request for Information Regarding Fees Imposed by Providers of Consumer Financial Products/Services here.



Capital Adequacy Framework Webinar
2:00 pm (EST) | Wednesday, February 23, 2022

A final Risk-Based Capital (RBC) rule effective for January 2022 and a final rule approved by the Board at the December 2021 meeting for the Complex Credit Union Leverage Ratio (CCULR) will transform the regulatory capital framework for the credit union industry. The implementation of RBC and CCULR will require complex credit unions to understand how to evaluate regulatory capital, Risk-Based Capital standards, and how the new Subordinated Debt rule intersects with the Capital standards. Credit Unions will also be trained on the Call Reporting requirements for both the RBC and CCULR forms and instructions.



SEC’s Crypto Crusade at Risk in Looming Legal Battles

Courtesy of Sam Sutton, Politico – JAN. 29, 2022

Cryptocurrency payments firm Ripple has started to rack up procedural court victories as it fends off the SEC in a case that could redefine how the agency polices digital assets.

In 2021, the SEC went after crypto. In 2022, crypto is coming for the SEC.

Securities and Exchange Commission Chair Gary Gensler has vowed to rein in what he’s dubbed “Wild West” abuses in the $1.6 trillion market. Industry leaders, flush with cash and deep-pocketed investors following a trading boom in Bitcoin and other digital assets, are aiming their lawyers at the sheriff of Wall Street in an intensifying legal fight.

Cryptocurrency payments firm Ripple, the de facto leader of the revolt, has started to rack up procedural court victories as it fends off the SEC in a case that could redefine how the agency polices digital assets. Grayscale Investments, which wants to launch a Bitcoin fund for the masses, tapped the white-shoe law firm Davis Polk to publicly outline a legal case that could be brought against the agency if it obstructs the company’s ambitions. The CEO of another startup, Terraform Labs, sued the SEC after it tried to serve him with a subpoena.

The emerging legal assault, which is being cheered on by crypto-friendly lawmakers who say the agency is overstepping its authority, could limit the SEC’s reach for years to come and remove what many in the industry see as their biggest regulatory obstacle to launching even more virtual currency products.

Read More at Politico Here



An Interesting Read: What Banks Need to Know About New Data Breach Notification Requirements
Courtesy of David J. Oberly, American Bankers Association – FEB. 04, 2022

Given the omnipresent concern about cyber attacks targeting the banking industry, the FDIC, OCC and Federal Reserve recently published a new joint final rule establishing enhanced security incident notification requirements for banking organizations and their service providers.

The final rule is designed to improve the sharing of information about cyber incidents that may impact the nation’s banking system and requires banks to notify their primary federal regulator within 36 hours of determining that a “significant” computer-security incident has occurred. Similarly, bank service providers are now required to notify impacted bank customers as soon as possible of any incident that could materially impact their operations for four hours or more.

Read More at the American Bankers Association Here