#2023-05, March 3, 2023

Washington Summit and Visits to Capitol Hill, March 20-22

Following up on the Association’s Virtual Washington Visit, staff and bank members will attend the American Bankers Association (ABA) Washington Summit later this month.  Beyond the conference agenda and networking sessions, Association staff is coordinating visitations to Capitol Hill.

Please contact Brad Papalardo with any questions about the trip to Washington, D.C.  Additionally, to read the ABA’s full conference agenda, please click here.

Check Fraud on the Rise

On February 27th, The Financial Crimes Enforcement Network (FinCEN) issued a nationwide alert describing a massive surge in mail theft-related check fraud schemes, specifically targeting the U.S. Postal Service.  Fraud remains the largest source of illicit proceeds in the U.S. and remains an Anti-Money Laundering / Countering the Financing of Terrorism (AML / CFT) National Priority.  The alert is brief, but most notably it includes the following language:

“In addition to filing a Suspicious Activity Report (SAR), when suspecting this type of fraud, financial institutions should refer their customers who may be victims of mail theft-related check fraud to the U.S. Postal Inspection Service (USPIS) at 1-877-876-2455 or by Web Form.”

The Association is engaged with our partners across state and national trade associations to coordinate strategy moving forward, and the Association’s Security & Loss Prevention Committee will meet and discuss improved Points of Contact (POC) on check fraud across membership.  Members banks have been instrumental in raising the awareness of this high priority issue.

The American Bankers Association also has a survey link project underway to gather Points of Contact at financial institutions, which concludes on Monday, March 6th.  Survey responses will be anonymous, and the survey asks that banks ensure only one response is submitted per bank.

To read the FinCEN Alert, please click here.

To submit information to the ABA’s information gathering process on check fraud, please click here.

Supreme Court Agrees to Hear Case Challenging CFPB Constitutionality

The Supreme Court on Monday agreed to hear arguments in a case that challenges the constitutionality of the funding mechanisms for the CFPB.  This development comes after a federal appeals court panel ruled four months ago – in a unanimous decision – that the mechanism was unconstitutional.  The CFPB was created by the Dodd-Frank Act (DFA) following the global financial crisis, and the Democratic-controlled Congress, at the time, ensured that funding came from the Federal Reserve, not Congress itself.  Of note, CFPB Director Rohit Chopra welcomed the news in several media appearances this week, as the ruling will provide greater clarity to financial institutions and consumers.

To read a more detailed, summary media piece by CNBC, please click here.

Joint Agency Statement on Liquidity Risks Resulting from Crypto-Asset Market Vulnerabilities

On February 23rd, the federal regulatory agencies issues a joint statement highlighting liquidity risks to banking organizations associated with certain sources of funding from crypto-asset related entities.  The joint statement also included potentially effective practices in managing these risks.  The agencies indicated that recent events in this asset sector have underscored the heightened liquidity risks presented by certain sources of funding.

As you know, banking organizations are neither prohibited nor discouraged from providing banking services to customers or any specific class or asset type, as permitted by law and regulation.  This joint statement does not create any new risk management principles.

To read the joint statement, please click here.