The Federal Reserve released a final rule expanding Regulation II, the implementing regulation for the Durbin Amendment. The new rule extends the mandate that debit card transactions be processed on at least two unaffiliated payment card networks—for example, a PIN debit and a signature debit network—to card-not-present transactions. The final rule also states that the debit card issuer is responsible for ensuring at least two unaffiliated networks have been enabled and standardized and specifies certain terms and phrases in the Fed’s Reg II commentary.
Sens. Richard Durbin (D-Ill.) and Roger Marshall (R-Kan.) filed an amendment to add S. 4674, the Credit Card Competition Act of 2022, and a related study to the National Defense Authorization Act. The Senate is expected to consider the bill later this month.
The Durbin-Marshall bill would require credit card issuers to add a second network to customers’ cards. In an August letter to Congress, the NBA and other state and national financial trade groups said “...this central planning of the major conduit for money in our economy will reduce access to banking services and harm community financial institutions.”
Bankers are urged to contact their lawmakers and ask them to oppose S. 4674.
Warren Releases Report on Zelle Fraud
A report released this week by Sen. Elizabeth Warren (D-Mass.) says banks are not repaying users who contest “unauthorized” Zelle transactions and claims the banks are potentially violating the Consumer Financial Protection Bureau’s (CFPB) Regulation E. Warren says her findings prove regulatory clarity is necessary to protect the platform’s users and calls on the CFPB to “clarify and strengthen Regulation E and include fraud in the Regulation’s error resolution purview.”
Financial trade groups pushed back, saying Warren’s report “fails to acknowledge that 99.9% of the 5 billion transactions processed on the Zelle network in the past 5 years were sent without any report of fraud or scams.” The groups said Warren’s suggestions for expanded liability would limit consumer access to Zelle services and features.
The Financial Crimes Enforcement Network (FinCEN) issued a final rule establishing a beneficial ownership information reporting requirement. Most corporations, limited liability companies and other entities created in or registered to do business in the United States will be required to report information to FinCEN about their beneficial owners.
The Interagency Community Investment Committee (ICIC) issued a request for information on effective approaches for supporting access to affordable capital and financial services in historically underserved communities, including communities of color, rural communities and tribal communities. The deadline for comment is Dec. 5.
The ICIC is a new initiative aimed at facilitating collaboration and coordination of federal community investment and place-based economic development programs.