NACHA Government Relations Update - Oct. 19, 2017

Posted October, 18 2017

CFPB Releases Principles for Consumer-Authorized Financial Data Sharing and Aggregation
On Oct. 18, 2017, the Consumer Financial Protection Bureau (CFPB) outlined principles for protecting consumers when they authorize third-party companies to access their financial data to provide certain financial products and services. These principles are intended to help foster the development of innovative financial products and services, increase competition in financial markets, and empower consumers to take greater control of their financial lives. This topic will be included in the upcoming Government Relations Advisory Group meeting on Nov. 8, 2017 on Capitol Hill.

Click here to view consumer protection principles and click here to view a summary of stakeholder insights that informed the principles.

Cohn Indicates Increased Asset Threshold for Banks Facing Increased Regulation

On Oct. 16, 2017, National Economic Council Director Gary Cohn announced at an industry event that there is bipartisan support for raising the $50 billion asset threshold above which banks face increased regulation, and that he expects the final number to be at least $200 billion. NACHA believes this relief will likely come from a Senate bill(s) being crafted by Senate Banking Chairman Crapo (R-Idaho) and ranking member Brown (D-Ohio) to ease financial regulations.
Senator Markey Pens Letter to CFPB on Protecting Consumer Data
On Oct. 16, 2017, Sen. Markey (D-Mass.) wrote a letter to the Consumer Financial Protection Bureau to weigh the data security of third-party aggregators allowing consumers to access their financial data. Under a section of the Dodd-Frank law, the CFPB has a mandate to ensure consumer access to financial data. Markey asked the CFPB to consider the security of consumer records when enforcing that mandate. In the letter, Markey stated "The CFPB ought to encourage such solutions which empower the consumer by allowing easy access to innovative third party services while still promoting the safety of consumer data." Markey reiterated that security and transparency must remain priorities for CFPB.
Senator Crapo Questions Regulator Oversight of Credit Reporting Firms
On Oct. 12, 2017, Senate Banking Committee Chairman, Mike Crapo (R-Idaho) sent a letter to heads of the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) expressing concern regarding the level of oversight of credit-reporting firms such as Equifax. He asked if the regulators had the technical capabilities to oversee these firms’ practices in cybersecurity and consumer data protection, in an effort to understand if the agencies "have the authority, or should have the authority" to do so. He also questioned if credit-reporting firms “help ensure the safety and soundness” of financial institutions.
Treasury Releases Second Report on the Administration’s Core Principles of Financial Regulation
On Oct. 6, 2017, the U.S. Department of the Treasury released a report detailing how to streamline and reform the U.S. regulatory system for the capital markets. Treasury’s evaluation of current capital market regulations found that there are significant reforms that can be undertaken to promote growth and vibrant financial markets while maintaining strong investor protections. The released report was in response to Executive Order 13772 issued by President Trump on Feb. 3, 2017 which  calls on Treasury to identify laws and regulations that are inconsistent with a set of Core Principles of financial regulation. This is the second of four reports to ease regulations in the financial sector. The third report on asset management will be released shortly and the final report on fintech will be released near the end of the year.
Senate Confirms Randal Quarles as Federal Reserve Board Governor
On Oct. 5, 2017, the U.S. Senate voted (65-32) to confirm Randal K. Quarles as a Federal Reserve Board Governor and as Vice Chairman for Supervision and Regulation, making him the first person to ever officially hold the position created by the 2010 Dodd-Frank Act. In this role, Mr. Quarles will be required to testify biannually before the Senate Banking Committee and the House Financial Services Committee.
Acting Comptroller of the Currency Rescinds 2013 Deposit Advance Products Guidance
On Oct. 5, 2017, as the CFPB released regulations impacting some small-dollar loans, the Office of the Comptroller of the Currency did the opposite and rescinded 2013 Deposit Advance Products Guidance, thereby making it easier for national banks to make small, short-term loans to customers who regularly receive direct deposits via ACH.
FRB Revises PSR Policy to Allow for Same Day ACH Entries
The Board of Governors of the Federal Reserve System (Board) has revised part II of the Federal Reserve Policy on Payment System Risk (PSR policy) related to the transaction posting times used for measuring balances intraday in institutions' accounts at the Federal Reserve Banks (Reserve Banks) to conform to amendments to regulations governing the use of the Automated Clearing House (ACH) Network by Federal agencies announced by the Department of the Treasury, Bureau of the Fiscal Service (Fiscal Service). Specifically, the amended posting rules conform to the decision of the Fiscal Service to allow Federal agencies to originate and receive same-day entries beginning Sept. 15, 2017.
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