ABA Newsbytes: CFPB Warns Against Certain Terms in Financial Service Contracts

The CFPB yesterday released a circular that warns against unlawful or unenforceable terms and conditions in contracts for consumer financial products or services. In a statement, the bureau said that many contracts include terms and conditions claiming to limit consumer rights and protections. One such term is a general liability waiver, “which purports to fully insulate companies from suits even though most states have laws that create hosts of exemptions to these waivers.”

Under the Dodd-Frank Act, “a representation or omission is deceptive if it is likely to mislead a reasonable consumer and is material,” according to the CFPB. The bureau said that its examiners have identified several violations in contract terms and conditions.

“For example, the CFPB found that a respondent bank engaged in a deceptive practice under the [Dodd-Frank Act] when it represented to consumers that because they signed a deposit agreement including broad language directing the bank not to contest legal process, consumers had waived their right to hold the bank liable for improperly responding to garnishment notices; in fact, regardless of the language in the account agreement, consumers had the right to challenge the garnishments,” it said. Read more.

ABA Suggests Further Refinements to Generative AI Framework

A draft framework to help organizations incorporate trustworthiness considerations into the design and implementation of generative artificial intelligence is a welcome start, but the document is too dense and could use further refinement, ABA said in comments to the National Institute of Standards and Technology.

NIST is developing the voluntary framework as part of an executive order by President Biden directing federal agencies to implement policies to promote the safe deployment of AI technologies in the U.S. economy. In its comments, ABA said its members found the draft framework for generative AI very comprehensive, and that it adequately captures risks created or exacerbated by the technology. However, some of the information in the document is laid out “in an extremely dense manner,” the association said. ABA also suggested refinements to the risk types identified in the document so they better suit the specific needs and challenges encountered by financial institutions.

“These materials will serve as an ideal starting point for businesses looking to stand up their governance and will also be a benchmark for maturing existing practices,” ABA said. Read the letter. Read the draft framework.

CISA NEWS: NSA Warns iPhone and Android Users to Turn It Off and On Again

Davey Winder | June 4, 2024

cisa

Although some people might worry about the National Security Agency itself spying on their phones, the NSA has some sage advice for iPhone and android users concerned about zero-click exploits and the like: turn it off and on again once per week.

How often do you turn off your iPhone or android device? Completely turn it off and then reboot it, rather than just going into standby mode, that is. I suspect that the answer for many people is only when a security or operating system update requires it. That, according to the NSA, could be a big mistake.

ABA Banking Journal: CFPB to require nonbanks to register consumer protection orders

June 3, 2024
ABA banking journal The Consumer Financial Protection Bureau today finalized a rule requiring certain nonbanks to register information about their company with the bureau along with any agency or court orders concerning consumer protection violations, with that information to be kept by the bureau in a public registry. The CFPB will also require covered nonbanks to file annual reports regarding compliance with the orders issued against them.

In a statement, the CFPB said that while banks, credit unions and many mortgage companies are known to regulators and the public, many other financial companies are not licensed or registered. The bureau added that Congress gave it the authority to register nonbanks, with the rule the first time it has exercised that authority. The rule is effective Sept. 14, with registration to begin Oct. 16.

In comments last year while the rule was still under review, the American Bankers Association raised concerns about CFPB statements that it may next consider imposing similar reporting requirements on banks. The Dodd-Frank Act exempts depository institutions from the CFPB’s registration authority, the association said. There is also no need for such requirements, it added, as the bureau has acknowledged there already are four regulatory agencies that regularly publish consumer compliance information on banks and credit unions, and the largest banks are subject to CFPB supervision.

Full article

2024 SDBA Ag Credit Conference | July 17-18 | Pierre

The 2024 SDBA Agricultural Credit Conference brings together key stakeholders in the financial and agricultural sectors to address pertinent issues surrounding agricultural financing and credit access. This conference serves as a platform to explore emerging trends, address common challenges, and identify opportunities for collaboration and partnership to support the long-term success and resilience of the agricultural sector. Through expert presentations, insightful discussions, panel discussions and a robust exhibit hall, attendees will gain valuable insights into navigating the challenges of agricultural lending, mitigating risks, and maximizing opportunities for growth in this vital sector of the economy.

Hotel blocks will release June 14.

Information & Registration

2024 SBA Minnesota Lenders Conference | September 12 | Bloomington, MN

The SBA Minnesota Lenders Conference is now the Minnesota Small Business Lenders Conference! The SBA loan programs should be a key part of every lender’s strategy. They are a proven tool for attracting new customers with competitive loans for business expansion and working capital needs. Don’t miss this full day of premier education sessions designed specifically to help you optimize your organization’s participation in SBA’s lending programs and build your network of SBA program and industry experts.

Book your room by September 13.

Information & Registration

Virtual Understanding Bank Performance

Providing a Strong Foundation for the Next Generation of Bankers

July 9, 11, 16, 18, 23, 25, 30, Aug 1 | 10 a.m. - 12 p.m. CDT

Participants will learn how to assess and analyze a bank’s financial performance by working with data from real institutions. Using financial statements from one sample financial institution along with statements from their own banks, participants will become familiar with the ins and outs of balance sheets and income statements and learn how to apply key performance metrics to the data presented in these documents.

Having learned how to interpret and analyze a bank’s financial statements, participants will gain deeper insight into the factors affecting bank performance. Later sessions in this course will address ways in which performance may be hindered or improved by funding strategies and risk management. Ultimately, participants will be able to review a bank’s financial statements to identify strengths and weaknesses and be able to recommend changes that will lead to improved performance.

In the final session of this course, participants will put what they have learned into practice. Participants will analyze a new data set, rate the bank’s performance and suggest strategic adjustments that might benefit the bank.

Information & Registration

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