NACHA Releases Q4 2014 Government Relations Digest

Posted January 8, 2015

NACHA’s quarterly Government Relations Digest reflects current payments system policy issues of potential impact to the ACH Network and other retail payment channels. The following are some highlights most relevant to NACHA Members.

Payments System
  • On December 5, 2014 the Federal Reserve Board announced the adoption of changes to part II of the Federal Reserve Policy on Payment System Risk (PSR policy) that are designed to enhance the efficiency of the payment system. The new rules change when the Fed will post ACH transactions and checks to banks’ accounts at the Reserve Banks. (See page 1 for more information)
  • On October 3, 2014, the Federal Reserve Financial Services announced that, effective January 2, 2015, the Federal Reserve Banks will introduce a 12:00 noon ET deadline for the FedForward Regular Mixed, Premium Mixed D, and Select Mixed deposit options. (See page 1 for more information) 
Electronic Payments
  • On November 13, 2014 the CFPB released its long awaited prepaid card rule in conjunction with a field hearing in Wilmington, Delaware.  Note is this rule would apply to all prepaid accounts, such as loadable digital wallets, and not just accounts associated with a physical prepaid card. (See page 6 for more information)
  • On October 28, 2014 the CFPB issued its fall 2014 Supervisory Highlights report that gives an overview of recent supervisory observations by the Bureau's supervision program. In it, the Bureau discusses observations made in the areas of consumer reporting, debt collection, deposits, mortgage servicing, and student loan servicing. (See page 6 for more information)
  • On October 17, 2014 President Obama issued an Executive Order announcing the replacement of roughly nine million government-issued payment cards with EMV chip-and-PIN versions in a push to increase security of consumer financial transactions. (See page 10 for more information) 
Operation Choke Point
  • On December 8, 2014 the House Oversight and Government Reform Committee published a report detailing the FDIC’s involvement in Operation Choke Point. Among other things, the report finds that the FDIC targeted legal industries and intended its list of “high risk merchants” to influence banks’ business decisions. (See page 11 for more information) 
  • On October 20, 2014 the CFPB issued a final rule to promote more effective privacy disclosures from financial institutions to their customers. The new rule, proposed in May 2014, allows financial institutions to post annual privacy notices using an alternative online delivery method versus traditional mailed disclosures. The rule became effective October 28, 2014 upon publication in the Federal Register. (See page 13 for more information) 
Regulatory Relief
  • On October 8, 2014 the CFPB issued a proposed Policy on No-Action Letters and asked for public comment. In the proposed policy, the CFPB could, in its discretion, issue no-action letters to specific applicants involving innovative financial products or services that promise substantial consumer benefit where there is uncertainty how statutes or regulations implemented by the Bureau would be applied. The purpose of the policy would be to reduce uncertainty and thus foster innovation.  The comment period ended December 15, 2014. (See page 16 for more information)
  • On December 18, 2014 H.R. 3329 was signed into law becoming P.L. 113-250. The bill directs the Federal  Reserve to apply its Small Bank Holding Company Policy Statement on Assessment of Financial and Managerial Factors to institutions under $1 billion, up from $500 million. (See page 18 for more information)
  • On December 18, 2014 H.R. 3468 was signed into law becoming P.L. 113-252. The bill creates parity in deposit insurance coverage for IOLTA accounts housed in banks and credit unions. (See page 19 for more information) 
Money Transfers
  • On November 10, 2014 FinCEN published a statement on providing banking services to money services businesses. On the same day, Under Secretary of the Treasury for Terrorism and Financial Intelligence David Cohen gave a speech to a joint conference held by the American Bankers Association and the American Bar Association on the same topic. (See page 21 for more information) 
Debt Collection
  • In its most recent rulemaking agenda the CFPB pushed back the estimated release of its debt collection rule until April 2015. (See page 22 for more information) 
Cyber and Data Security
  • On December 17, 2014 CSBS released Cybersecurity 101: a Resource Guide for Bank Executives as, according to their accompanying press release, a non-technical resource that bank CEOs, board members and other senior executives can read to help mitigate cybersecurity threats at their banks. (See page 26 for more information)
  • On December 18, 2014 S. 2519, the Cybersecurity Protection Act of 2014, was signed into law. The bill would codify the National Cybersecurity and Communications Integration Center (NCICC) as the Federal-civilian information sharing portal. (See page 29 for more information)
  • On December 18, 2014 S. 1353, the Cybersecurity Act of 2013, was signed into law. The bill directs the National Institute of Standards and Technology (NIST) to facilitate and support the development of a voluntary, industry-led set of standards and procedures to reduce cyber risks to critical infrastructure. (See page 31 for more information) 
Money Laundering and other Financial Crimes
  • On October 23. 2014 Rep. Maxine Waters (D-CA) introduced H.R. 3317, the Holding Individuals Accountable and Deterring Money Laundering Act, which would increase civil penalties for violations of money laundering laws, impose penalties on partners, directors, officers, or employees of a financial institution for such violations, and impose a 20-year maximum prison term for individuals who facilitate evasion of anti-money laundering program or control. (See page 36 for more information) 
  • On October 10, 2014 the Treasury announced that all of its non-SDN sanctions lists are available in a consolidated set of data files, "the Consolidated Sanctions List." (See page 36 for more information) 
Virtual Currencies
  • On December 18, 2014 New York Department of Financial Services Superintendent Benjamin Lawsky gave a speech at the Bipartisan Policy Center outlining revisions his Department intends to make on a proposal creating a framework for the regulation of virtual currencies. (See page 37 for more information)
  • On December 16, 2014 CSBS published its Draft Model Regulatory Framework for States virtual currency regulation regimes. The Draft Model Regulatory Framework includes licensing, consumer protection, market stability, anti-money laundering, and cybersecurity requirements for state licensed virtual currency firms. (See page 37 for more information)
View the right-hand bar for the full Q4 2014 GR Digest.
Tagged: Article
Access: Public