NACHA Government Relations Update

Posted May 28, 2015

NACHA Activity
On May 21, 2015 NACHA hosted its first Capitol Hill Day event of 2015 in Washington, D.C., facilitating a day-long series of meetings between members of NACHA’s Government Relations Advisory Group (GRAG) and congressional staff members from the Senate Banking Committee and House Financial Services Committee, representing two Payments Caucuses – the Senate Payments Innovation Caucus and the Congressional Payment Technology Caucus. GRAG Members continued their outreach and education efforts regarding the ACH Network with particular emphasis on the value of private sector rulemaking and NACHA’s role in governing the Network. Other discussion topics included the recent Same Day ACH ballot, plans to leverage the ACH to move payments faster for end users, ACH network quality and enforcement, data security and patent protection. GRAG members also reminded staffers of the resources that NACHA and our Membership can provide for payments-related training and education. Collectively, the group participated in 12 meetings in addition to a breakfast meeting at The Capitol Hill Club and a lunch meeting with Congressman Gerald E. “Gerry” Connolly (D-VA).
 
During his lunch meeting with GRAG Members and NACHA GR staff, Congressman Connolly informed the group that he had issued a proclamation praising NACHA for moving ACH payments faster. In addition to recognizing Direct Deposit and Direct Payment via ACH Month, the Congressman commended “NACHA’s commitment to enhancing the versatility and improving the strength of the ACH Network for consumers, businesses and governments that rely on the Network to move their money via ACH.” The proclamation cited the introduction of Same Day ACH as “an immediate action undertaken by financial institutions to modernize the payments system, and [create] a building block for a variety of products and services.”
 
NACHA Capitol Hill Day events are held semiannually. The next outreach event will be held in Q3 2015. 
 
Industry Leadership
On May 20, 2015 Benjamin M. Lawsky announced his intent to step down from his position as first superintendent of the New York State Department of Financial Services (NYDFS) this June. After four years in his current role, Lawsky is reported to be working towards opening up a private law firm.
 
Legislative Outreach
GR staff has been monitoring and supporting legislative efforts pertaining to data security and patent protection.
 
Data Security
 
NACHA is advocating that data security legislation:

  • Include full federal preemption to create one high standard for the entire country instead of a patchwork of state laws.
  • Include a uniform data breach standard that creates certainty and predictability for both businesses and consumers.
  • Should only require notification when there is risk of consumer harm and not overburden businesses and consumers with unnecessary notification.
  • Recognize that an entity's mandated information security requirements should be scalable and appropriate for the institutions size, complexity and scope of the activities in which it engages.
  • Should not dictate a specific technology.
  • Should be flexible enough to evolve with technology. Requiring a specific technology would hurt innovation in the marketplace and ultimately put more consumer information at risk.Patents and the Financial Services Industry

 
Litigation by patent trolls against financial services companies has grown at a staggering rate—almost 290% from 2009 to 2013, based on a review of court records. Moreover, a study by Harvard Business School Professor Josh Lerner found that financial patents are 27 to 39 times more likely to be asserted in a lawsuit than non-financial patents. Staff is advocating that any legislation should:
 

  • Include full federal preemption to create one high standard for the entire country instead of a patchwork of state laws.
  • Ensure that demand letters include clear and detailed information, such as the owner of the patent, what entities have a financial interest in the patent, what product or service is allegedly being infringed and how such product or service infringe the patent.
  • Include language that would make the Covered Business Method (CBM) patents program permanent. The CBM program will expire in 2020. Preserving CBM ensures that there is an efficient, cost-effective alternative to litigation for the review of business method patents, and that CBM review will not subject patent holders to harassment or abuse. 

GR Releases Congressional Outlook for June Work Period
NACHA’s GR team has compiled a summary of the Congressional work period for the month of June.  The summary highlights anticipated congressional activity leading up to the August recess. (See the Related Materials in the right side bar)

Legislative Tool Kit
House 2015 Calendar (in the right hand bar)
Senate 2015 Calendar (in the right hand bar)​​
 
Follow NACHA Government Relations on twitter: @GR_NACHA for additional coverage of events and industry participation – now with more than 600 subscribers!

Access: Public