Posted February, 1 2016NACHA Files Comments Supporting Fed Payments Study but Has Concerns with Survey Instrument
On Jan. 22, 2016, NACHA filed comments on the Federal Reserve’s triennial payments survey. The comments support the need for the survey but NACHA raised issues on the survey questions that paralleled recent discussions with the Fed about the survey questions. The Federal Reserve’s triennial payments study serves as a benchmark for the payments industry and provides data that is otherwise unavailable. This unique information identifies industry trends and shapes new opportunities. NACHA views the proposed collection of information as consistent with and central to the Federal Reserve’s functions as they relate to the promotion of the safety and efficiency of the domestic payments system, which is integral to the national economy. The information that is collected and publicly shared by the Federal Reserve is used in whole or in part by diverse parties in the private and public sectors that have an interest in the continued use and development of solutions that leverage the domestic payments system in a safe and efficient manner.
In the comment letter, NACHA raises specific detailed concerns it has with certain aspects of the ACH Payments Survey regarding the questions on ACH including return volume and originating return entries, fraud detection by RDFI’s, ACH value, volume and returns, on-us transactions and unauthorized third-party payments fraud.
NACHA Visits Members of House of Representatives
In late January, NACHA visited the offices of several members of the House Financial Services Committee including Rep. Marlin Stutzman (R-IN), Rep. Scott Tipton (R-CO), Rep. Randy Hultgren (R-IL) and Rep. Mick Mulvaney (R-SC), as part of the association’s ongoing engagement with policymakers. Topics of discussion included Same Day ACH, faster and real time payments initiatives, data security and protection of consumer information, the newly established Task Force on Terrorism Financing and the activities of the Congressional Payments Technology Caucus.
House Members Urge Trans-Pacific Partnership Fix for Financial Services
A bipartisan group of 63 House members, including Ways and Means Trade Subcommittee Chairman Dave Reichert (R-WA), are urging senior administration officials to "use all available measures" to address what they view as a major shortcoming in the financial services provisions of the Trans-Pacific Partnership (TPP). The TPP was negotiated between the United States and 11 Pacific Rim trading partners and will be considered by Congress in the coming months.
The final TPP draft includes rules prohibiting countries from preventing the free flow of data or forcing local storage of data, but those provisions in the deal's e-commerce chapter don't cover financial data.
"Omission of these disciplines in the Trans-Pacific Partnership is a missed opportunity to ensure that all U.S. companies benefit from strong rules prohibiting localization requirements," the lawmakers write in the letter. "We note that such disciplines can be included in trade agreements while maintaining the ability of U.S. regulators to protect consumers through prudential regulation."
2016 Election Outlook – Senate Races of Note
For a third consecutive election cycle, there is a real possibility that control of the United States Senate could change come November. The 2010, 2012, and 2014 cycles all saw extensive changes in the composition of the Senate, with Republicans growing their representation from 40 to 54 Seats. The 2016 cycle represents the first time the Class of 2010, the wave of Republicans voted into office in the wake of passage of the Affordable Care Act, will stand for reelection. Given the wave nature of 2010, Republicans are defending several seats in Purple and Blue states, creating a wide and competitive Senate playing field. Of the 34 seats that will be contested in 2016, there are 24 that are currently Republican and 10 that are currently Democratic. Please note, it is still early in the cycle and electoral events at the presidential level will impact nearly all of these races.
2016 Senate Outlook
Full Agenda for the CFPB in 2016
The CFPB has quite a full agenda in 2016 as it is expected to push forward with some long-awaited rules. With an average rulemaking period lasting 18 months, and the November elections looming, the CFPB is motivated to tie up several significant rulemakings carried over from 2015, especially considering a possible Republican victory which could lead to complete restructuring of the bureau. Many of the rulemakings still wouldn’t be effective until 2017 or later. Some of what’s on the table:
- Prepaid products: Director Cordray expects to finalize a rule addressing prepaid products in the “February-March-April 2016” timeframe. In November 2014, the CFPB proposed a rule for prepaid financial products, including both cards and certain digital/mobile wallets. The proposed rule would apply the protections of the Electronic Funds Transfer Act (Regulation E) to most consumer prepaid accounts. It would also extend CARD Act credit card requirements to prepaid products that offer credit features.
- Overdraft policies: The CFPB is currently engaging in pre-rule activities relating to bank overdraft policies. The CFPB is considering whether rules governing overdraft and related services are warranted, and if so, what rule would be appropriate. According to the CFPB's Fall Regulatory Agenda, work on this issue will continue in early 2016. The agenda also says the Bureau "is continuing to engage in additional research and has begun consumer testing initiatives related to the opt-in process." Earlier this year the CFPB also sought approval from OMB to conduct a survey as part of its study on ATM/debit card overdraft disclosure forms, with further surveys expected on overdraft issues. The surveys follow a June 2013 white paper and a July 2014 report on checking account overdraft services.
- Payday lending: The CFPB's Fall Regulatory Agenda indicates, and Director Cordray has confirmed, that a Notice of Proposed Rulemaking on payday lending is expected in the February-March 2016 timeframe. The Bureau also held a Small Business Regulatory Enforcement Fairness Act (SBREFA) review panel on the topic in April 2015. At Cordray’s most recent appearance before the Senate Banking Committee, Senators from both sides of the aisle cautioned that any payday rule should not restrict access to credit for people who live on the economic margins.
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Senate 2016 Calendar (also in bottom right hand bar)