Posted August, 9 2017NACHA Supports McWilliams to be Trump Administration's Pick to Chair the FDIC
NACHA supports Jelena McWilliams as the potential Federal Deposit Insurance Corp (FDIC) Chair. McWilliams, a friend of NACHA and very knowledgeable in payments, is currently an Executive Vice President, Chief Legal Officer and Corporate Secretary at Fifth Third Bank. Prior to her move to Fifth Third, McWilliams served as Chief Counsel to Sen. Mike Crapo (R-Idaho), now the Chairman of the Senate Banking Committee, and as Deputy Staff Director to onetime Senate Banking Chairman Richard Shelby (R-Ala.) She was also previously an attorney for the Federal Reserve Board of Governors.
If nominated, McWilliams would round out President Donald Trump's bank regulatory team. The importance of the FDIC grew after the 2010 Dodd-Frank Act, which gave the agency a key role in determining how banks should plan for the possibility of bankruptcy. In addition, McWilliams would also have a significant voice in discussions on how to revise the Volcker rule, which has drawn much attention in recent confirmation hearings with the Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board of Governors.
CFPB Releases Prototype Model Disclosures & Report on Overdraft Costs
On Aug. 4, 2017, CFPB released prototype model disclosures aimed at helping consumers better understand the pros and cons of optional overdraft coverage for checking accounts. These model disclosures are not mandated but are meant to serve as a tool for financial institutions and credit unions.
CFPB also released a report on overdraft costs. The report states that consumers who frequently overdraw their checking accounts typically pay almost $450 more in annual fees by opting into coverage for debit card and ATM overdrafts. Frequent overdrafters, which the CFPB defines as people with more than 10 overdrafts or rejected transactions a year, account for only 9 percent of all account holders but paid 79 percent of overdraft and bounced-check fees, according to a Bureau’s report.
A potential rule on overdraft practices has been delayed several times since CFPB first inquired in 2012. Cordray told NACHA’s GRAG in an in-person meeting that they were still looking at overdraft in a pre-rule environment. GR staff doubts that any action on overdraft will occur during Director Cordray’s remaining months at CFPB (term expires in a year and he is likely to resign this Fall to run for Governor).
Rep. Luetkemeyer Asks Federal Financial Regulators to Harmonize Financial Services Cyber Regulation
Before Congress recessed on Aug. 3, 2017, Financial Institutions Subcommittee Chair Luetkemeyer (R-Mo.) sent a letter asking the federal financial regulators to harmonize the cyber security regulatory regimes for the financial services sector. The letter relates to the Treasury recommendation report, issued in June, from the reducing regulatory banking report on the need for harmonizing cyber regulations and creating a common lexicon.
OCC Solicits Public Comments on Revising the Volcker Rule
On Aug. 2, 2017, the Office of the Comptroller of the Currency (OCC) published a notice that solicits public input on whether certain aspects of the implementing the Volker Rule regulation should be revised to in order to decrease the compliance burden on banking entities and fostering economic growth. In particular, the OCC invites input on ways to tailor the rule’s requirements and clarify key provisions that define prohibited and permissible activities. The agency also seeks input on how the federal regulatory agencies could implement the existing rule more effectively without revising the regulation. The public is invited to provide supporting data that can inform specific changes to the regulation, and help assess the effectiveness of implementation efforts to date.
This has been a common theme in recent confirmation hearings on Capitol Hill. NACHA expects other federal agencies to seek input during 2017.
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