#2022-26, September 23, 2022

House Version of Durbin-Marshall Bill Introduced

Earlier this week, Representatives Peter Welch (D-VT) and Lance Gooden (R-TX) introduced a companion bill to the Credit Card Competition Act of 2022, MBA-opposed legislation to expand routing mandates to credit cards that was introduced in the Senate by Senators Dick Durbin (D-IL) and Roger Marshall (R-KS).

Specifically, the measure requires covered credit card issuers to add a second network to their customers’ cards.  However, banks could only choose from certain options set by the Federal Reserve, which is more restrictive than the rules for debit card transactions under the Dodd-Frank Act’s Durbin Amendment in 2010.  The bill also requires that banks accept virtually any kind of transaction, regardless of the security or fraud recourse it carries, forcing banks to onboard potentially many more than two networks.

MBA continues to oppose these bills, which were filed to benefit the largest retailers and provide no benefit to consumers.

Large Bank CEOs Testify Before House Financial Services; Senate Banking Committees

Executives from the nation’s largest banks testified this week before both the House Financial Services Committee and the Senate Banking Committee.  During questioning, members of the committees raised a number of issues, including the Federal Reserve’s increase in the federal funds rate, fraud related to the Zelle payments network, overdraft protection, and Environmental, Social and Governance (ESG) matters.

To read testimony and view an archived webcast of the House hearing, click here.  To read testimony and view the Senate hearing, click here.

Treasury Issues Reports Calling for Digital Asset Regulation

According to a series of interagency reports released by the US Department of the Treasury, federal regulators should “aggressively” pursue enforcement against illegal practices in digital asset markets and redouble efforts to monitor consumer complaints about bad actors.  The nine reports, which are the result of a March 9 executive order by President Biden, call on federal agencies to take steps to increase regulation and educate the public about the risks associated with cryptocurrencies and other digital assets.  They also call for further research into the creation of a central bank digital currency, or CBDC.

The Administration plans to take several actions in response, including directing the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC) and other regulators to “aggressively pursue” investigations and enforcement against unlawful practices in the digital assets space; urging the CFPB and Federal Trade Commission to monitor consumer complaints; and directing the Financial Literacy Education Commission to lead a public-awareness effort to help consumers understand the risks involved with digital assets.

In addition, the Administration will evaluate whether to ask Congress to amend the Bank Secrecy Act, anti-tip-off statutes and laws against unlicensed money transmitting to apply explicitly to digital asset service providers.  The president will also explore whether to urge Congress to raise the penalties for unlicensed money transmitting to match the penalties for similar crimes, and to amend relevant federal statutes to let the Justice Department prosecute digital asset crimes in any jurisdiction.

To read the Treasury Fact Sheet, click here.

Biden Nominates Two for FDIC Board

President Biden recently nominated two Republicans to fill the vacant seats on the five-member Federal Deposit Insurance Corporation (FDIC) board of directors.  Travis Hill, who worked at the agency for four years as senior adviser to the chair and deputy to the chair for policy, was nominated to be vice chair.  In addition, Jonathan McKernan, who is currently senior counsel at the Federal Housing Finance Agency, was also nominated for a board slot.  McKernan previously was a senior policy adviser at the US Department of the Treasury and to former Senator Bob Corker (R-TN).

By law, the FDIC Board cannot have more than three members from the same party, with two seats filled by the comptroller of the currency and the director of the CFPB. The Senate must approve the nominations.

To read more, click here.

MCBC Hosting Financial Equity Summit on October 3-4: Members Encouraged to Participate

The Massachusetts Community and Banking Council (MCBC) is hosting its first Financial Equity Summit the mornings of October 3-4.  The Summit features local and national speakers focusing on closing our racial wealth gap in Massachusetts and thinking proactively about how best to deliver financial services to lower income consumers in an ever-changing landscape.

Confirmed speakers include Grace Lee, Eastern Massachusetts Regional President at M&T Bank; Lisa Rice, CEO of the National Fair Housing Alliance; Samir Goel, co-founder of Esusu; Dedrick Asante-Muhammad, Chief of Membership, Policy and Equity at the National Community Reinvestment Coalition; Lauren Saunders, Associate Director of the National Consumer Law Center; Ken Willis, Senior Vice President at Federal Home Loan Bank of Boston; Glynn Lloyd, CEO of Mill Cities Community Investments; and many more.

There will also be panel discussions on mortgage lending, small business lending, FinTech and Special Purpose Credit Programs with industry experts and community partners.  There is no cost to register, and we encourage all member institutions to participate.

To view a flyer for the event, click here.