#2023-27, November 17, 2023

Government Shutdown Averted

The U.S. Congress passed a second continuing resolution earlier this week to fund the federal government until early 2024. President Biden is expected to sign the bill today. Read more about this week’s votes to avert the shutdown here.

Massachusetts Bankers Association, Members Go to Washington, D.C.

Last week, the Massachusetts Bankers Association and members joined the Connecticut Bankers Association and Rhode Island Bankers Association in Washington, D.C. for a legislative summit. Over the course of two days, attendees heard from policy experts from the American Bankers Association and the Independent Community Bankers of America on a range of topics including the ACRE Act, SAFER Banking, the recent CRA final rule and more. 

On Thursday, attendees met with and engaged in thoughtful discussions with Michael Hsu, Acting Comptroller of the Office of the Comptroller of the Currency, Jonathan McKernan, Director, Board Member of the Federal Deposit Insurance Corporation, and officials from the Consumer Financial Protection Bureau on a range of topics including the issues mentioned above and more. 

We had the opportunity to visit the U.S. Capitol and meet with Congressman Richie Neal (D, MA-1) and the office of Congressman Jim McGovern (D, MA-2), as well as an impromptu meeting with Senator Warren (D, MA) at the terminal while waiting to board the plane back to Massachusetts, to discuss issues impacting the banking industry and your clients.

Special thanks to Association members Julianne Thurlow, President and Chief Executive Officer Reading Cooperative Bank, Reading, MA, Chair, American Bankers Association; Casey Brouthers, Esq., VP/Associate General Counsel BayCoast Bank, Swansea, MA; Patrick Gaughen, President and COO Hingham Institution for Savings, Hingham, MA; Joanne Sullivan, VP, Director, Government and Community Relations Federal Home Loan Bank of Boston, Boston, MA; and, Gary Vierra, Senior Vice President & Chief Risk Officer BayCoast Bank, Swansea, MA for joining us in Washington, D.C. and for your advocacy on behalf of the MA banking industry.

View of the U.S. Capitol Building from the balcony off Congressman McGovern’s (D, MA-2) Office

Meet & Greet with Congresswoman Katherine Clark (D, MA-5), U.S. House Minority Whip

Congresswoman Katherine Clark (D, MA-5) recently met with Association leadership and member banks headquartered and/or with branches established in her district to discuss a variety of issues facing the banking industry and its customers in Massachusetts and across the country. Congresswoman Clark serves as the U.S. House Minority Whip and is the second-highest ranking Democrat in the U.S. Congress. 

We are grateful to Congresswoman Clark and her team, and to the Association members who took time to join us for this important advocacy event. The Association is proud to coordinate these events to connect our members with our elected leaders and build upon our strong relationships with them. Special thanks to East Cambridge Savings Bank for hosting us.

Association Members pictured with Congresswoman Katherine Clark (D, MA-5)

FHFA Releases FHLBank System at 100: Focusing on the Future Report

Last week, the FHFA released its FHLBank System at 100: Focusing on the Future report. The report takes a full look at the history of the FHLBank system with an eye toward ensuring “the FHLBanks remain well positioned to meet the needs of their members and the communities they serve.” MBA is still reviewing the report in its entirety and will provide members with important updates when available. A letter from the Council of Federal Home Loan Banks is also included here for your review.

To review the FHFA press release, click here.
To review the Report, click here.
To review a FHLBank Fact Sheet, click here.

Consumer Financial Protection Bureau Unveils CRA State Laws Summary

The CFPB recently released a report that analyzed and summarized several states’ community reinvestment acts, which included Massachusetts. The CFPB report “focuses on state CRA laws that provide an affirmative obligation for financial institutions to meet the lending, services, and/or investment needs of their communities” and summarizes “key factors of each of these laws, organizes them into ten issue groups, and identifies five findings that inform how states could consider establishing reinvestment obligations.”

Click here to read the report.

U.S. Treasury Issues Final Rule for Treasury Check Returns

The U.S. Treasury recently issued a final rule holding financial institutions liable if canceled Treasury checks are paid without taking “reasonable efforts” to ensure checks are authentic. 

Among the changes included in the final rule is the definition of “reasonable efforts” as outlined below: 

“The final rule amends the definition of “reasonable efforts” found at 31 CFR 240.2 to include a requirement that financial institutions wait for check return information within the time periods set out by Regulation CC to help verify that a Treasury check is valid [2] and authentic. It is also making conforming changes to 31 CFR part 240 to require that financial institutions ensure a Treasury check has not been canceled before making the funds associated with that check available for withdrawal.

In those instances where a financial institution has taken reasonable efforts but check return information for a POC on a properly presented check is not transmitted to the financial institution prior the funds availability timeframe specified in Regulation CC, the financial institution would not be liable for releasing the funds associated with the Treasury check. While Fiscal Service expects this circumstance to be uncommon, it understands that compliance with Regulation CC requires the release of the funds within certain timeframes, and thus under the final rule a financial institution will not be liable for a POC due to complying with Regulation CC.”

The final rule takes effect on Friday, December 1, 2023.

For more information on the U.S. Treasury final rule click the links below: 

• Federal Register :: Indorsement and Payment of Checks Drawn on the United States Treasury
• A Guide to Regulation CC Compliance (federalreserve.gov)
• Regulators tighten liability standards for Treasury check returns | ABA Banking Journal 

No Washington Update Next Week

There will not be a Washington Update next week due to the Thanksgiving holiday. On behalf of the Massachusetts Bankers Association, we wish you a safe and Happy Thanksgiving!