#2022-14, May 20, 2022

House Financial Services Committee Advances CU Expansion Bill; MBA Joins State Associations in Opposition

On a party line vote of 27 to 22 earlier this week, the House Financial Services Committee voted to advance H.R. 7003, a bill allowing credit unions to expand their membership and business lending capacity.  In a letter to the Committee prior to the mark-up, MBA joined state banking trade associations from 50 states and the American Bankers Association in strongly opposing the measure, noting that “will not deliver on the purported objective of improving banking access to underserved communities but instead expand taxpayer subsidies of business lending.”

During the committee's debate several Republican members expressed opposition to the bill.  However, the legislation, which was cosponsored by Committee Chair Maxine Waters (D-CA) advanced despite these objections.  Our letter also states that, “The legislation also creates a major new loophole in the credit union business lending cap, long one of the most controversial issues in financial services.”

MBA will continue to work with the national trade associations to oppose H.R. 7003 as it moves through the legislative process.  

To read the letter, click here.  To view an archived webcast of the mark-up, click here.

Fed Issues Final Rule on FedNow Service

This week, the Federal Reserve issued a final rule designed to help the agency implement the real-time FedNow payments service, which is scheduled to launch in 2023.  The rule, which amends Regulation J by creating a new subpart C that applies solely to FedNow transactions, also makes changes to subpart B, which governs Fedwire, to reflect the addition of a new payment service.  In addition, the final rule makes technical updates to subpart A.

The Fed announcement also reiterates that it “is committed to working towards compatible standards and operating procedures with the existing private-sector instant payment service and has already advanced that effort by using the widely accepted ISO 20022 standard for FedNow payment messages and aligning the implementation of the standard very closely to that of the private-sector service.”  The new rules are effective in the first calendar quarter after they are published in the Federal Register.

To read more, click here.

CFPB Releases Interpretive Rule on State Enforcement Authority

The Consumer Financial Protection Bureau (CFPB) recently issued an interpretive rule that details the Bureau’s view that state regulators and state attorneys general have enforcement authority with regard to all provisions of the Consumer Financial Protection Act.  The rule is based on the CFPB’s interpretation of Section 1042 of the CFPA.

The interpretive rule also notes that while the CFPB’s enforcement authority is limited under Sections 1027 and 1029 of the CFPA, such limitations “do not extend to states exercising their enforcement authority under section 1042.”  The rule states that “states can enforce [federal consumer financial laws] to the full extent authorized under those laws . . . including against national banks and federal savings associations.”

In a press release announcing the interpretive rule, the Bureau indicated that it “plans to consider other steps to promote state enforcement of federal consumer financial protection law, including ways to facilitate victim redress.”

To read more, click here.

Senate Confirms Powell to Second Term as Fed Chair

Late last week, the Senate confirmed Jerome Powell to a second term as chair of the Federal Reserve Board of Governors by a vote of 80 to 19.  Powell has led the Fed board since 2018.

The Senate also confirmed Lisa Cook and Phillip Jefferson to serve terms on the Fed board last week. President Biden’s nominee for vice chair for supervision, Michael Barr, had his nomination hearing in the Senate Banking Committee earlier this week.

CSBS Announces Death of President & CEO John Ryan

John Ryan, president and CEO of the Conference of State Bank Supervisors, died unexpectedly Monday in Washington, DC.  Ryan joined CSBS in 1997 and had led the organization since August 2011.

“The Massachusetts banking industry mourns the unexpected passing of Conference of State Bank Supervisors President and CEO John Ryan,” said MBA President and CEO Kathleen Murphy.  “John was a stalwart defender of the important role of state banking commissioners in maintaining a safe and sound state banking system.  Those of us who knew John will never forget his steady leadership and caring approach to even the most challenging issues.  MBA worked closely with John and the CSBS staff during debate on the Dodd-Frank Act to protect the dual banking system.  Following enactment of the law, he led CSBS to being an integral resource to state bankers associations, banks and mortgage lenders alike.  We extend our deepest sympathy to his family and his CSBS colleagues during this time.”

The CSBS board of directors has named EVP James Cooper as acting CEO of CSBS.