ABA Raises Concerns About Digital Asset Regulation Bill

Sens. Kirsten Gillibrand (D-N.Y.) and Cynthia Lummis (R-Wyo.) today introduced the Responsible Financial Innovation Act—a bill that would create a regulatory framework for digital assets.

Among other things, the legislation would assign regulatory authority for digital asset spot markets to the Commodity Futures Training Commission, creating a new advisory committee focused on developing guideline principles, empowering regulatory agencies and advising lawmakers on fast-developing technology. It would also establish 100% reserve, asset type and detailed disclosure requirements for all payment stablecoin issuers. Importantly, the bill would not require that all payment stablecoin issuers become depository issuers, as some other policymakers have recommended.

The American Bankers Association has long advocated for providers of digital assets to be subject to the same regulatory framework as banks and raised concerns about today’s legislation, noting that it “would effectively create a parallel supervisory and regulatory structure that holds non-bank firms to lesser standards than banks, and therefore offers their customers and our financial system fewer protections. We believe [Federal Reserve Chairman Jerome] Powell’s principle of ‘like activity, like regulation’ should guide this debate, and we look forward to sharing our perspective as the legislative process plays out.”

ABA Credit Conditions Index: Credit Market Conditions Expected to Weaken in Months Ahead Amid High Inflation

While the consumer and business credit markets remain on generally solid footing, bank economists expect credit conditions to weaken over the next six months, according to the American Bankers Association’s latest Credit Conditions Index released today.

The latest summary of ABA’s Credit Conditions Index examines a suite of indices derived from the quarterly outlook for credit markets produced by ABA’s Economic Advisory Committee (EAC), which is comprised of chief economists from major banking institutions across North America. Readings above 50 indicate that, on net, the economists expect business and household credit conditions to improve, while readings below 50 indicate an expected deterioration.

The third quarter 2022 report finds that near-term expectations for credit quality and availability fell sharply for the second consecutive quarter for both consumers and businesses. The latest readings offer a strong contrast to the credit market conditions in 2021 and early 2022 and reflect ongoing headwinds stemming from inflation and supply chain disruptions. EAC members downgraded their forecasts for real economic growth in 2022 from 2.5% to 1.6% (Q4/Q4).

“While consumers continue to benefit from an exceptionally strong labor market, Russia’s invasion of Ukraine and China’s ‘zero-COVID’ policy are adding to inflationary pressures and increasing economic uncertainty,” said ABA Chief Economist and Head of Research Sayee Srinivasan.

In the third quarter:

The Headline Credit Index fell again in Q3, dropping 20.1 points to 20.8, the weakest reading since the end of 2020. The sub-50 reading indicates that bank economists expect credit market conditions to deteriorate over the next six months.
The Consumer Credit Index fell 15.7 points to 22.9 in Q3. Half of EAC members expect consumer credit availability to fall over the next two quarters, while only one expects it to strengthen. Regarding consumer credit quality, two-thirds expect credit quality to deteriorate over the next two quarters, while none expect it to improve. Overall, the sub-50 reading indicates that EAC members expect consumer credit conditions to weaken over the next six months.
The Business Credit Index fell 24.4 points to 18.8 in Q3. Half of EAC members expect business credit availability to fall over the next two quarters, while only one expects it to strengthen. Meanwhile, all but two EAC members expect business credit quality to deteriorate over the next six months, and none anticipate an improvement. Overall, the sub-50 reading indicates that EAC members expect business credit conditions to weaken over the next six months.

“As the Fed raises rates to combat inflation, the outlook for credit markets has unsurprisingly weakened,” said Srinivasan. “The good news, however, is that jobs are plentiful, consumer demand is strong and companies continue to invest at a healthy clip. For these reasons, most bank economists remain cautiously optimistic about the trajectory of the U.S. economy over the remainder of the year.”

The full report with detailed charts and a discussion of the broader economic context is available here

Bank Partnerships to Protect Seniors

America’s seniors hold nearly two-thirds of all deposit balances and comprise about half of bank depositors. Every day criminals target our vulnerable seniors and their hard-earned financial assets. Effectively protecting older customers requires multifaceted approaches and community partnerships with law enforcement and adult protective services.

Join ABA Foundation on June 15, World Elder Abuse Awareness Day, to hear a panel of experts talk about connecting with community partners to help safeguard seniors from financial exploitation. Register here for this free webinar.

Community Commitment Awards Entry Forms

The ABA Foundation in 2022 is proud to mark 10 years of celebrating America’s banks and their dedication to the people and places they serve. Banks across the industry are now helping their communities recover and thrive after an unprecedented pandemic. The Community Commitment Awards spotlight banks that continue the tradition of excellence in community outreach.

The 2022 entry period opened May 2 and closes July 1 at 11:30 p.m. EST. The winners will be notified approximately 8 weeks from the close of the entry period. The awards will be presented at the ABA Annual Convention in October.

2022 Entry Forms

Community Commitment Award - Recognizes banks of all sizes for programs and initiatives that showcase the creativity and compassion of the industry, and its commitment to serving customers and communities in need.
George Bailey Award Nomination - Recognize an individual non-CEO banker, demonstrating extraordinary commitment to their community.

CISA News: State and Local Governments Eye Collective Cybersecurity Measures

A number of state and local governments have announced plans to create and expand collaborative cybersecurity efforts due to manpower and budgetary constraints, smaller local governments may not be able to fully staff dedicated response teams or implement all available defense technologies and techniques. Funding from 2021’s Infrastructure Investment and Jobs Act, which allotted $1 billion for cybersecurity-related state and local government tech improvements over the next few years, may eventually help local and other government organizations enhance their overall security capabilities.

Click here to read the full article.

Kyle Pickner Named to 40 Under 40 Emerging Community Bank Leaders

Congratulations, Kyle Pickner on being recognized nationally as a leader in community banking! Independent Community Bankers of America (ICBA) named Kyle to its list of 40 under 40 Emerging Community Bank Leaders.

Kyle joined Plains Commerce Bank as Chief Trust Officer in early 2021 and has been blazing a trail ever since. He believes education is the best strategy for bridging the gap between traditional finance and cryptocurrency. With his extensive expertise in blockchain technology and digital assets, he will lead the Plains Commerce team in bringing to market industry-first digital asset solutions. Pickner aims to instill a public confidence in cryptocurrency to launch a new era of innovation and efficiency for the bank.

“Being a community bank means being an institution who can be forward thinking and a leader in the transformation of financial services. My mission lies in providing education to all ages-from children to professionals-on the ever-changing world that is finance.” – Kyle Pickner

Click here to read more about Kyle and watch his three-minute interview.

SDBA Staff Out of Office

The South Dakota Bankers Association staff will be out of office next week attending the 2022 NDBA/SDBA Annual Convention in Bismarck, ND. We will return on Thursday, June 16th. We will have limited access to email. If your business is urgent, please email us at [email protected], and we will respond to your message ASAP.

Juneteenth Day of Observance

South Dakota Bankers Association and South Dakota Bankers Insurance and Services will be closed on Monday, June 20th in observance of the Juneteenth National Independence Day. We will re-open at 8 a.m. CDT on Tuesday, June 21st.

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