May 15, 2019
Community Bank Services

Argent Money


Require Safeguards on Personal Info for All Entities

ICBA urged Congress to require all entities that are responsible for handling personal consumer information to be held to the same standards as financial institutions.
In a statement for a Senate Banking Committee hearing on data collection and privacy, ICBA advocated extending privacy standards like those mandated under the Gramm-Leach-Bliley Act. The safeguards should apply to third-party contractors, credit bureaus such as Equifax, retailers and other non-bank entities, and federal regulators themselves, ICBA said.
ICBA's statement also calls for non-bank entities that access customer account information to be held responsible for ensuring the security of the customer information they are accessing and liable for any data breach and consumer harm they cause. It also continues ICBA's support for a single national breach notification standard to replace the current patchwork of state laws.
Statement >> 

Debt Collection Rule Proposed 
The Consumer Financial Protection Bureau issued a notice of proposed rulemaking to implement the Fair Debt Collection Practices Act. Under its proposal, debt collectors would be restricted in how frequently, and the way in which they contact consumers. The proposal also provides additional information to consumers to help them identify debts and respond to collection attempts.
Proposal  >> 
Feedback on Proposed Call Report Revisions Sought

The FDIC is requesting feedback on proposed revisions to the call report. The revision introduces reporting requirements on the proposed Community Bank Leverage Ratio.
The proposed call report revisions also address proposed amendments to the FDIC's regulations that would apply the CBLR framework to the deposit insurance assessment system. Comments are due June 18, 2019.
Community bankers can use ICBA's Be Heard grassroots action center to tell regulators that their proposed 9 percent community bank leverage ratio is too high and to call for an 8 percent CBLR.
ICBA Be Heard  >> 

Regulation Can Cause a Liquidity Crunch for Smaller Banks

In a comment letter to the FDIC, CSBS suggested changes to the regulatory treatment of brokered deposits and deposit interest cap methodology.
Brokered deposits can be a source of supplemental funding for banks in rural areas or markets that lack local deposits to meet community needs and are a critical credit to agriculture customers and small businesses. However, the FDIC has generally viewed brokered deposit waivers as increasing the risk to the Deposit Insurance Fund. 
State regulators have long been concerned that the current supervisory approach can cause a liquidity crunch for already struggling banks. If a bank falls under the prompt corrective action (PCA) framework, it is immediately prohibited from renewing or issuing brokered deposits. This creates an unnecessary strain on liquidity, destabilizes the institution and increases the risk to the Deposit insurance Fund.
If a bank triggers PCA by falling below "well capitalized," state regulators recommend it should be able to reduce its brokered deposits over time. Rather than increasing the risk to the deposit insurance fund, a more gradual approach lowers the risk by placing the bank on a "glide path" for easing their dependence on brokered deposits. CSBS recommends that banks be allowed to develop a plan to unwind their brokered deposit positions over 12 to 24 months, which would avoid a liquidity crunch as the bank works to enhance capital and reduce its risk profile. 
CSBS also recommended changing how the national interest cap is determined to account for fluctuating interest rates. Under the current methodology, banks subject to rate restrictions are unable to reasonably compete for deposits. One option recommended by CSBS would generally allow for a higher rate cap in a falling rate environment, while another recommended alternative would allow for a higher rate cap in a rising rate environment.

The Overdraft Rule

The CFPB is also announcing the launch of its first RFA 610 review, which is of the 2009 Overdraft Rule. 
In 2009, the Federal Reserve Board issued a rule that limits the ability of financial institutions to assess overdraft fees for paying automated teller machine (ATM) and one-time debit card transactions that overdraw consumers' accounts. The rule amends Regulation E, which implements the Electronic Fund Transfer Act (EFTA). The Bureau recodified Regulation E, including the amendments made by the Overdraft Rule, in 2011 when the Bureau assumed rulemaking responsibility under EFTA.  
The notice seeks comment on the economic impact of the Overdraft Rule on small entities. The public will have 45 days to comment after publication of the notice in the Federal Register.

State AGs Call for Legal Clarity on Banking Legitimate Cannabis Businesses

In a letter to congressional leaders, a bipartisan group of 38 state attorneys general urged lawmakers to advance legislation allowing banks to serve marijuana-related businesses in states where the drug is legal.


The AGs noted that limited access to financial services has forced many legal cannabis businesses to operate in cash, which creates tax-related challenges in addition to being a public safety risk. They expressed support for the SAFE Banking Act, a bill that was recently approved by the House Financial Services Committee, or similar legislation that would provide a safe harbor for depository institutions serving legal MRBs.


"Our banking system must be flexible enough to address the needs of businesses in the various states and territories. . . while protecting the interests of the federal government," the AGs wrote. "This includes a banking system for marijuana-related businesses that is both responsive and effective in meeting the demands of our economy." 

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Compliance Conference  -  September 10 & 11