Texas Court Expands 1071 Injunction to Cover All Banks

A Texas court last week expanded a preliminary injunction on enforcement of the CFPB’s Section 1071 small business data collection rule to include all financial institutions covered by the rule. The U.S. District Court for the Southern District of Texas in July granted the injunction to ABA and Texas Bankers Association members in a lawsuit over the rule brought by the associations and the McAllen, Texas-based Rio Bank. ABA and TBA asked at the time for the injunction to apply to all FDIC-insured institutions, but the judge sided with a CPFB request to limit the order to association members.

The expanded injunction, sought by credit unions and banks not covered by the original order, has no such limitations. The relief applies while the U.S. Supreme Court hears a constitutional challenge to the CFPB’s funding structure in a separate case, CFPB v. Community Financial Services Association of America, with a decision possibly coming before the end of June 2024. ABA and TBA in August asked CFPB Director Rohit Chopra to voluntarily delay implementation of Section 1071 for all banks not covered by the original injunction.

“Since we launched our legal challenge over the CFPB's 1071 final rule back in April, TBA and ABA have argued for every bank in the country to get relief from this over-reaching rule, which we firmly believe violates the law and will harm the very small businesses it is intended to help,” ABA and TBA said in response to the most recent court order. The groups added that they welcomed the expansion, “which ensures that every FDIC-insured institution will receive the benefits of this injunction regardless of affiliation.”

SDBA Establishes Peer Group for Education/Training-Related Personnel

We have been asked to establish a peer group of education/training-related personnel to share ideas, exchange thoughts, and network. There is no cost to participate in this group. This will initially be email-based, and, if the desire exists, potentially expand to Zoom/virtual or in-person, when allowed. If you would be interested in connecting, please click here. To start, I will serve as the point of contact for this group. You will receive additional information once the group is established. Please feel free to share this invitation with others in your organization who may be interested in participating.

ABA Experts Webinar: “What You Need to Know about the CRA Final Rule” | Friday, Nov. 3

The federal banking agencies have finalized the long-awaited overhaul of regulations that implement the Community Reinvestment Act. The new rule aims to reflect the digital delivery of financial products and services and enhance economic opportunity for low-and moderate-income individuals and communities. It also has strategic implications for banks that may affect your growth strategy and expansion into new markets.

Join Naomi Camper, ABA’s chief policy officer, and Krista Shonk, ABA’s vice president and senior counsel for fair and responsible banking, regulatory compliance and policy, for a preliminary analysis of the new CRA regulation. This free webinar will discuss top-line takeaways and highlight how it might impact your bank’s business strategy. We will also take your questions!

Note: This free webinar is for bankers only and open to all ABA member and non-member banks.

Questions about the new CRA rule can be submitted in advance by emailing [email protected].

To register for the webinar, click here.

RMA Siouxland Chapter to Host 'Cash Flow Analysis I: UCA Fundamentals' | Dec. 6 & 7, Sioux Falls

Back by popular demand, the Siouxland Chapter is hosting RMA's Cash Flow Analysis I: UCA Fundamentals training course. The 2-day course will be held at The First National Bank in Sioux Falls on December 6 & 7, 2023. Cash Flow Analysis I teaches the fundamentals of constructing and analyzing direct and indirect cash flow statements. Cash Flow Analysis I is designed for credit analysts, loan review personnel, and lenders new to cash flow analysis.

The registration deadline is November 15, 2023. To find more information or to register for the event, click here.

Email [email protected], or contact a member of the local RMA Chapter, if you have any questions.

ABA Offers Women Lead Workshops

Women Lead Workshops help bankers develop critical leadership skills to propel their careers and organizations to the next level. Learn leading practices about how to inspire and motivate, act strategically, build collaborative teams, and champion change. Whether you are an emerging leader or a seasoned leader looking to fine tune your skills, join us to discuss different leadership competencies to grow your skills.

In 2023, we explored how to inspire and motivate teams and how to develop strategic perspective. In the new year, we have added two new workshops: How to Foster Collaboration on Teams and How to Champion Change.

We cap registrations to the first 25 registrants to enable more discussion. Registration is free, and participants receive an ABA Certificate of Completion. Workshop times and registration links are below.

We can also bring these workshops to your bank if you register at least 15 participants. Please reach out to Cathy Nestrick at [email protected] if you have questions or for scheduling bank groups.

Workshop Dates

How to Foster Collaboration on Teams

Great leaders build and lead collaborative teams. Learn these critical leadership skills during one of the following workshops in January. Click on date to register:

How to Champion Change

Great leaders also know how to champion change. Learn the best strategies to manage change during one of the following workshops in February. Click on date to register:

Study: AI-Generated Phishing Emails Almost as Effective as Humans

Phishing emails written by humans trick users into clicking malicious links at a greater rate than emails written by artificial intelligence, but not by much, according to new research by IBM. In an essay for Security Intelligence, Stephanie Carruthers, chief people hacker for IBM X-Force Red, said her team recently created fake phishing emails by writing emails themselves and by using ChatGPT. The human-created emails took about 16 hours to create, but ChatGPT was able to craft convincing emails in about five minutes, she said.

The human-created and ChatGPT-created phishing emails were sent out to roughly 1,600 people at a healthcare organization as part of a test. The human-created emails had a click rate of 14% while the ChatGPT emails had an 11% click rate. Employees also reported ChatGPT emails as phishing at a higher rate than emails written by humans, 59% versus 52% respectively.

“Humans understand emotions in ways that AI can only dream of,” Carruthers said, explaining the results. “We can weave narratives that tug at the heartstrings and sound more realistic, making recipients more likely to click on a malicious link.” She also said that humans were able to make emails more personal—for example, by including a person’s name—and write more succinct subject lines. Still, the results were close, she noted. “As technology advances, we can only expect AI to become more sophisticated and potentially even outperform humans one day.”

CISA News: 60 Minutes Clip

“Five Eyes” intelligence leaders warn of China’s global espionage campaign.

QUESTION OF THE WEEK

Q. If a client withdraws the claim and we have provided them provisional credit, are we still required to comply with the notification and timing requirements if we will be debiting the provisional credit?

A. From the facts provided, the bank would likely want to consider completing its investigation and providing notice to the consumer of the outcome, as well as the debiting of provisional credit if the bank finds there was no error, to ensure that the consumer cannot reassert the dispute within the applicable window under Regulation E:

“1. Withdrawal of error; right to reassert. The financial institution has no further error resolution responsibilities if the consumer voluntarily withdraws the notice alleging an error. A consumer who has withdrawn an allegation of error has the right to reassert the allegation unless the financial institution had already complied with all of the error resolution requirements before the allegation was withdrawn. The consumer must do so, however, within the original 60-day period.” https://www.consumerfinance.gov/rules-policy/regulations/1005/11/#e

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