#2022-25, September 2, 2022

FedNow Real-Time Payments to Launch by July 2023

The Federal Reserve announced recently that the FedNow payments service will launch between May and July of 2023.  According to the announcement, the existing pilot program, in which more than 120 organizations are participating, will enter technical testing soon.

As we have reported previously, FedNow will be accessible to financial institutions of any size, and participants will be able to provide businesses and consumers with the ability to send and receive instant payments efficiently and securely, and payment recipients will have full access to funds immediately, according to the Fed.

Participants in the pilot will complete a certification process to ensure operational and messaging readiness and then move into production once the service is launched.  As the pilot program moves into the testing phase, the Fed will also engage nonpilot financial institutions and service providers interested in being early adopters.

To read more, click here.

FHFA will Conduct “Comprehensive Review” of Federal Home Loan Bank System

The Federal Housing Finance Agency (FHFA) this week announced it will conduct a “comprehensive review” of the Federal Home Loan Bank (FHLB) System.  As part of the review, the agency is hosting two public listening sessions and a series of regional roundtable discussions to consider and evaluate the mission, membership eligibility requirements and operational efficiencies of the FHLBanks.

FHFA is public feedback in six areas: general mission and purpose in a changing marketplace; FHLBank organization, operational efficiency and effectiveness; the banks’ role in promoting affordable, sustainable, equitable and resilient housing and community investment; their role in addressing the unique needs of rural and financially vulnerable communities; member products, services and collateral requirements; and membership eligibility and requirements.  The first listening session, which will be held in-person in Washington, DC, on September 29 and written comments will also be accepted through October 21.

To read more, click here.

SEC Finalizes New Reporting Requirements for Executive Compensation

The Securities and Exchange Commission recently adopted new requirements for company disclosures concerning executive compensation.  The changes include a new mandate that a reporting company’s proxy statement and other disclosures include a table showing executive compensation and financial performance measures.  In addition, companies must provide the annual total shareholder return and the annual total shareholder returns of a peer group of companies.

The rule that was finalized was originally proposed the rule in 2015.  Under the new rule, large companies would be required to disclose details on executive compensation for the past five fiscal years while small companies need to report on the past three fiscal years.  Small companies would be exempt from disclosing details on pensions and peer groups and from new language requiring companies to list the three to seven most important measures linking executive compensation to company performance.  Emerging growth companies, registered investment companies and foreign private issuers are not required to provide the disclosure.

Companies subject to the rule must begin to comply with the new disclosure requirements in proxy and information statements that are required to include Item 402 executive compensation disclosure for fiscal years ending on or after December 16, 2022

To read more, click here.

ABA Seeking Bankers to Serve as “Small Entity Representatives” for Account Data Access Rule Feedback Process

As we have reported previously, the Consumer Financial Protection Bureau (CFPB) is currently writing a proposed rule implementing Section 1033 of the Dodd-Frank Act, which requires banks to give consumers access to their transaction account data.  As part of the rulemaking process, the Bureau must gather information from a representative sample of small businesses (including banks, credit unions, as well as nonbank data users and data aggregators) that will be impacted by the rule through a Small Business Regulatory Enforcement Fairness Act (SBREFA) review.

The SBREFA review process requires the CFPB to meet with selected Small Entity Representatives (SERs) to solicit feedback on an outline of the proposed rules, the potential economic impacts of complying with the rules, and to explore less burdensome regulatory alternatives.  The meeting is not public but the SERs and a summary of their feedback will be public.

The Bureau has asked the American Bankers Association (ABA) to recommend SER candidates for the SBREFA process, specifically individuals with knowledge of data sharing, privacy and data security as well as the cost of complying with regulations.  Bankers from institutions with less than $750 million in assets are eligible, and there is no requirement for a SER to be a CEO.

The process is expected to begin with a release of an Outline of Proposals later this year or in early 2023.  After the outline is released, the SERs will be expected to participate in approximately three 90-minute pre-meetings in advance of the convening meeting of the SBREFA Panel.  During these meetings, the CFPB will explain the SBREFA review process and may begin to discuss the outline of proposals and solicit feedback.  The convening meeting will be conducted via video teleconference and will include a discussion of the outline of proposals.  ABA will provide information and support to any bankers willing to serve as a SER for this important rulemaking.

Any bankers interested in participating in the SBREFA process for this rulemaking should contact Jon Skarin at the Association office.  Names must be submitted to the CFPB by Friday, September 9, 2022.

FDIC, OCC, and Boston Fed Hosting Webinar on Economic Challenges and Opportunities for Latinos in Massachusetts on September 8

The Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), and the Federal Reserve Bank of Boston are hosting a webinar on the Economic Challenges and Opportunities for Latinos in Massachusetts: Q3 2022 Boston AEI Meeting on September 8 at 10:00 a.m.

The webinar will provide insights into the socio-economic challenges and opportunities facing Latinos in Massachusetts, and offer solutions to address Latino, low- and moderate-income, and underbanked communities, such as partnering with community-based organizations to support community development lending, services, and investment opportunities that may garner favorable Community Reinvestment Act (CRA) consideration.  Details and registration information are below:  

When: Thursday, September 8, 2022 from 10:00 AM to 11:30 AM ET
Where: Webinar, WebEx,

Who should attend: Bank Presidents and Chiefs, CRA Officers, Financial Institutions, CDFIs, Non-profit Organizations, other Community-based Organizations, State and Local Government, and stakeholders interested in the availability of capital serving low- and moderate-income families in diverse populations to promote economic inclusion and mobility.

Registration Information: To register online, please click here.