In This Issue

• House Members Nudge Agencies on Tailored Regulation
• ABA's Rob Nichols to Host Webinar on 'Power Up' Initiative
• GAO Report: U.S. Regulatory Structure Complex, Fragmented
• CardHub: Retailers Lag in EMV Adoption
• Learn About New CIP Rules on Prepaid Cards
• CFPB Prepard Card Rules to be Delayed

House Members Nudge Agencies on Tailored Regulation

 
In a letter to the federal banking agencies Tuesday, a bipartisan group of 133 House members, including South Dakota Congresswoman Kristi Noem, asked what regulators are doing to tailor their rules to the diverse entities they supervise and to identify areas where they need additional legislative authority to tailor rules.

Led by Reps. Scott Tipton (R-Colo.) and David Scott (D-Ga.), the lawmakers emphasized that “the failure to effectively calibrate the regulatory response to match the level of risk posed by the institutions has had a real impact on the ability of institutions to serve their communities.” Tipton is the lead sponsor of the TAILOR Act, which would require regulators to take factors like asset size, business models and risk profiles into account when developing regulations.

The TAILOR Act, which recently cleared the House Financial Services Committee and is waiting for a floor vote, is a key part of ABA’s Agenda for America’s Hometown Banks. ABA and state association advocacy helped build support for Tuesday's bipartisan letter. Read the letter.

ABA's Rob Nichols to Host Webinar on 'Power Up' Initiative

ABA President and CEO Rob Nichols will host a webinar on Wednesday, April 6, at 1 p.m. CDT to give an overview of ABA’s new “Power Up” initiative. ABA encourages all bank CEOs to participate in the webinar to learn more about this important new initiative and how to get involved.

The “Power Up” program was created as a way to increase bankers’ clout and voice with policymakers. To “power up” banker advocacy, ABA is asking that all bank CEOs engage in grassroots leadership, join BankPac or a state association’s federal PAC and donate to the Fund for Economic Growth.

In a recent CEO email, Nichols highlighted the important role of grassroots action in building invaluable personal relationships with lawmakers. “All of these steps are aimed at dramatically expanding bankers’ participation in the political process and thereby increasing our political strength,” he wrote. Register for the webinar.

GAO Report: U.S. Regulatory Structure Complex, Fragmented

The U.S. financial regulatory structure could be streamlined to improve effectiveness, according to a report published Monday by the U.S. Government Accountability Office. The GAO said that overlap and fragmentation have led to inefficient regulatory processes, as well as inconsistencies in the oversight of similar institutions and in consumer protection. These inefficiencies are likely to be resolved only through congressional action, the report said.

Among other things, the GAO recommended that Congress work to streamline collaboration between the Financial Stability Oversight Council, the Treasury Department’s Office of Financial Research and the Federal Reserve with respect to the monitoring of systemic risk. Congress should consider legislative changes that would better align FSOC’s authorities with its mission, the GAO said.

Additionally, lawmakers should ensure that the Fed and OFR jointly articulate individual and common goals for their systemic risk monitoring activities; engage in collaborative practices in support of these goals; and share tools, assessments and results with the FSOC’s Systemic Risk Committee. Read the full report.

CardHub: Retailers Lag in EMV Adoption

Six months after the EMV card fraud liability shift, more than four in 10 retailers have not updated terminals in any of their stores, and an additional quarter of retailers have completed updates of less than half of their terminals, according to a survey by the website CardHub. Only about one-third of retailers have fully or nearly finished upgrading card terminals.

Even at retail chains that have experienced a card data breach in the past five years, 43 percent have not yet implemented the more secure EMV technology. According to CardHub, these stores include major retail names such as Costco, Kmart, Albertsons, Staples and Neiman Marcus.

However, many consumers continue to be unaware of the security benefits chip technology provides. More than half of respondents to a CardHub poll said they don’t care if store terminals are chip-enabled, and just 4 percent said it would be a decisive factor in whether they would shop there. Additionally, 12 percent of customers said a chip offers no additional protections over a magnetic stripe, and half of customers said they didn’t know which was safer. Six in 10 respondents said they had received a chip card in the past year.

ABA continues to offer materials to help bankers educate their customers on chip card use and security benefits, including a chip card infographic and talking points at aba.com/PRtools.

• Read the CardHub survey.
• View ABA's infographic.
• Read ABA's talking points.

Learn About New CIP Rules on Prepaid Cards

 
Total Training Solutions has added a hot topic webinar to its May lineup. New rules have just been released for prepaid cards, so "Alert! New CIP Rules on Prepaid Cards" will be presented on May 23.

New customer identification program rules on prepaid cards came out through interagency guidance to clarify that a bank’s customer identification program (CIP) should apply to the cardholders of general purpose prepaid cards that have the features of an account and are issued by a bank.

This guidance states that a general purpose prepaid card should be treated as an account if it provides a bank’s customer with (1) the ability to reload funds or (2) access to credit or overdraft features. The guidance applies to these cards even if they are sold, distributed, promoted, or marketed by third-party program managers.

This program will review this new interagency guidance for financial institutions from start to finish. You'll also receive a sample policy change and sample procedures. Learn more and register for the webinar.

CFPB Prepaid Card Rules to be Delayed

The Consumer Financial Protection Bureau is expected to delay the release of its new rules for prepaid cards until later in the second quarter, Beltway publication Politico reported on Monday. According to sources, the rules -- which were expected to be finalized earlier this month -- will not be released until May or June.