#2022-21, July 29, 2022

Senators Introduce MBA-Opposed Legislation Expanding Durbin Amendment

This week, Senators Dick Durbin (D-IL) and Roger Marshall (R-KS) introduced legislation effectively expanding the deeply flawed Durbin amendment to credit cards.  Introduction of the measure comes after merchant groups and big box retailers increased their lobbying on the issue earlier this year.

Specifically, the MBA-opposed bill requires certain credit card issuers to add a second network to their customers’ cards.  The Federal Reserve would be charged with developing a list of options, which is more intrusive than the current rules in place for debit card transactions under the Dodd-Frank Act’s Durbin Amendment in 2010, where a bank could choose any two unaffiliated networks.  The bill also includes a requirement that banks accept virtually any kind of transaction, functionally requiring banks to onboard potentially many more than two networks.  As we have reported previously, research by the Fed and others has shown that the Durbin amendment has not led to any cost savings for consumers while having a negative effect on banks under $10 billion.

A broad coalition of banking and financial industry groups, including the American Bankers Association (ABA) and the Independent Community Bankers of America (ICBA) issued a statement condemning the new legislation, stating that the new mandates would fall “disproportionately” on small card issuers, including community banks.   The groups’ statement also notes that, “The proposed legislation is a clear attempt to secure yet another windfall for the largest multinational retailers and e-commerce giants at the expense of the security of the payments ecosystem and the financial health of everyday Americans.”

MBA will be working with the national trade groups and other stakeholders to strongly oppose this bill in the coming months.

To read the industry statement, click here.

Senate Reconciliation Package Does Not Include Bank Tax Provisions

Senate Democrats announced that they had reached an agreement on a massive reconciliation package that addresses portions of the Biden administration’s agenda for climate, health, deficit reduction and taxes.  If the Senate parliamentarian agrees the bill meets the requirements for the reconciliation process, it can then advance with a simple majority vote instead of the two-thirds vote to overcome a filibuster.

According to the summary provided by Senate leadership, the draft legislation will raise approximately $739 billion in revenue through a combination of tax increases on corporations and selected taxpayers, prescription drug pricing reform and IRS tax enforcement.  Approximately $433 billion will be expended on energy security and climate change and an extension of Affordable Care Act subsidiaries with $300 billion earmarked for deficit reduction.

While the bill does include a 15 percent corporate book minimum tax for businesses with more than $1 billion in revenue, several other provisions opposed by the Association are not in the draft, including additional IRS reporting requirements and a corporate tax increase.  The Senate is expected to debate the measure next week before the August recess.

To read a one-page summary of the legislation, click here.

OCC Releases Infographics to Assist Bankers in Understanding Proposed CRA Rules

Earlier this week, the Office of the Comptroller of the Currency (OCC) released a series of infographics to assist bankers and other stakeholders in understanding the interagency notice of proposed rulemaking to modernize and strengthen the Community Reinvestment Act.  The infographics include key information from the proposal regarding performance standards; data collection, maintenance and reporting; assessment areas; community development; and retail lending products.

The infographics are detail how the CRA changes will affect small banks, intermediate banks, large banks, and wholesale or limited purpose banks.  The large bank infographic includes an additional section on data reporting.  Comments are due by Friday, August 5 and MBA is preparing a comment letter and bankers with questions regarding the proposal or issues to highlight in our letter should contact Ben Craigie at the Association office.

For more information and to view the infographics, click here.

SBA Now Accepting Requests for Loan Reviews from PPP Borrowers

The Small Business Administration (SBA) recently announced that it is now accepting requests from Paycheck Protection Program (PPP) borrowers for SBA to conduct a review of a lender’s forgiveness decision when the lender provided only partial forgiveness of the loan.

As we reported previously, SBA issued a procedural notice in January stating that the agency will allow borrowers to request an SBA loan review of partial approval forgiveness decisions issued by the borrower’s PPP lender.  A borrower may submit these requests to SBA through the borrower’s PPP lender.  The announcement also notes that the agency will conduct a manual review of all forgiveness decisions where the lender did not forgive any amount of the PPP loan.  No action is required by lenders until contacted by SBA.