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ABA Banking Journal: White House unveils cybersecurity labeling program for internet-connected devices
January 8, 2025
![White House unveils cybersecurity labeling program for internet-connected devices](https://bankingjournal.aba.com/wp-content/uploads/2025/01/internet-of-things-payment-750x536.jpg)
The Biden administration this week announced the official launch of the U.S. Cyber Trust Mark program, a voluntary cybersecurity labeling program for internet-connected devices. The program is managed by the Federal Communications Commission and administered by 11 companies.
According to the White House, the new program allows device manufacturers to test products against established cybersecurity criteria from the National Institute of Standards and Technology through accredited labs. They can then earn the U.S. Cyber Trust Mark label, “providing an easy way for American consumers to see the cybersecurity of products they choose to bring into their homes.”
The White House cited the EnergyStar program for energy-efficient home appliances as a model for the cybersecurity labeling program. Labels will be accompanied by QR codes that consumers can scan to access security-related information about specific products, such as how to change the default password and how to configure the device securely.
Currently, there are no requirements that federal agencies or contractors purchase only U.S. Cyber Trust Mark equipment.
Full Article
ABA Banking Journal: The OCC has lead role in defending our dual banking system
![The OCC has lead role in defending our dual banking system](https://bankingjournal.aba.com/wp-content/uploads/2025/01/state-flags-750x536.jpg)
Amid a raft of state efforts to undermine national bank preemption, the OCC needs to make a proactive case for dual banking.
January 9, 2025 | Dale Baker
America’s dual banking system, which enables banks of all sizes and charters to innovate and offer products and services to consumers and businesses in every market in the United States, is easy to take for granted. The clarity and efficiency that this system offers banks operating across state lines has quietly powered America’s economy for nearly 200 years. But new legislation at the state level threatens to disrupt what makes our dual banking system special.
Recently, several state legislatures have enacted or debated banking legislation that disregards existing federal law and that would notionally give their state regulators authority over basic national bank operations. These state laws have taken a variety of forms — from creating new standards around opening and closing accounts to mandating new operational processes and restructuring specific bank services. But, as the U.S. District Court for the Northern District of Illinois recently acknowledged in an order granting the Illinois Bankers Association and ABA’s motion for a preliminary injunction against enforcement of the Illinois Interchange Fee Prohibition Act, federal law remains clear. Federal regulators retain the authority to supervise nationally chartered banks, and the consequences of these misguided state efforts could damage the banking ecosystem for consumers.
Absent a strong national bank preemption standard — which ensures state and national banks are chartered and supervised by different levels of government — national banks cannot function efficiently across the country as they do today. Instead, national banks would be subject to an unwieldy and sometimes conflicting patchwork of state banking laws. For more than 150 years, Congress has provided the Office of the Comptroller of the Currency ample authority to appropriately shield national banks from state laws that would otherwise materially interfere with core national bank activities. And the OCC has a history of articulating and defending a strong national bank preemption standard, which the Supreme Court has time and again roundly affirmed. Without this commitment, it is unlikely our dual banking system would be so healthy or even have survived so long.
Fortunately, the OCC has taken note of the recent state developments. In a speech at the Exchequer Club in Washington, D.C., in July, Acting Comptroller of the Currency Michael Hsu described the OCC as a bulwark against states’ “performative politics” masquerading as sound banking policy. He emphasized the importance of national bank preemption, stating that “the OCC has and will continue to vigorously defend preemption, as it is central to the dual banking system and cuts to the core of why we exist and who we are.” And the OCC’s amicus brief in support of IBA and ABA’s motion for a preliminary injunction was nothing less than a full-throated defense of national bank preemption.
However, absent more decisive OCC action, these threats to our dual banking system will likely spread quickly and compound already obvious risks. Other states may enact banking laws that directly conflict with these early state laws, forcing national banks into the untenable position of being compelled to engage in certain activities in some states and prohibited from engaging in identical activities in other states. But state banking laws that intrude on national bank supervision and examination authorities risk more than making it impractical — or even altogether impossible — for national banks to serve consumers and businesses in multiple states.
Industry and federal lawmakers and agencies have identified risks some state banking laws pose to national security. In response to a recent bipartisan letter from Reps. Josh Gottheimer (D-N.J.) and Brad Sherman (D-Calif.) and now former Rep. Blaine Luetkemeyer (R-Mo.), Treasury Under Secretary for Terrorism and Financial Intelligence Brian E. Nelson expressed Treasury’s concern that state banking laws “severely restricting the factors banks may consider when assessing risks . . . create uncertainty and may inhibit effective anti-money laundering and countering the financing of terrorism and sanctions compliance programs, undermining efforts to promote national security.” Further, state banking laws requiring the state to “issue investigative reports following complaints of account closures or restrictions directly to the individuals who submitted them risk[s] disclosing sensitive information regarding suspicious activity reports, which must be kept confidential under federal law.”
However tempting it may be to take well-functioning parts of the American economy for granted, the consequences can be enormous. That’s why it’s incumbent that the OCC’s current and incoming leadership remain keenly attentive to state legislatures’ dangerous overstepping – whatever its pretext – and exhibit the resolve necessary to timely and forcefully protect the dual banking system. The costs of doing anything less are far too high.
Dale Baker is VP for trust policy in ABA’s Office of Financial Institution Policy and Regulatory Affairs.
CISA News: AI data centers could be ‘distorting’ the US power grid
December 29, 2024 | Anthony Ha
The proliferation of data centers aiming to meet the computational needs of AI could be bad news for the U.S. power grid, according to a new report in Bloomberg.
Using the 1 million residential sensors tracked by Whisker Labs, along with market intelligence data from DC Byte, Bloomberg found that more than half of the households showing the worst power distortions live within 20 miles of significant data center activity.
In other words, there appears to be a link between data center proximity and “bad harmonics” — a term for the less-than-ideal flow of electrical power into homes.
Bloomberg says this “distorted” power could eventually destroy plugged-in appliances, increase vulnerability to electrical fires, and even lead to brownouts and blackouts. And AI data centers could be even more problematic because of their volatile energy requirements.
“No grid is designed to be able to handle that kind of load fluctuation not only for one data center but for multiple data centers at the same time,” said Bloom Energy’s chief commercial officer Aman Joshi.
A spokesperson for Chicago’s Commonwealth Edison told Bloomberg the utility “strongly questions the accuracy and underlying assumptions of Whisker Labs’ claims.”
Full Article
ABA Banking Journal: CFPB proposes to regulate large nonbanks in personal loan market
January 8, 2025
![CFPB proposes to regulate large nonbanks in personal loan market](https://bankingjournal.aba.com/wp-content/uploads/2025/01/online-loan-750x536.jpg)
The Consumer Financial Protection Bureau announced today that it will pursue rulemaking to allow it to regulate large nonbanks that provide personal loans. The proposed rulemaking is in response to a petition filed by the Consumer Bankers Association and Center for Responsible Lending.
In a letter to the petitioners, the CFPB’s general counsel noted the agency has supervisory authority over nonbanks and large banks in most segments of consumer lending, but not the entirety of the personal loan market, “where the CFPB generally only has supervisory authority over large banks and nonbank payday lenders.” The nonbank segment of the personal loan market consists of 85 million accounts and more than $125 billion in outstanding balances, according to the bureau.
“Your concerns about the existence of an unlevel playing field in the market for personal loans have merit,” the CFPB said. “In particular, banks that offer credit cards and nonbanks that offer payday loans (including traditional payday loans or online or app-based payday loans that are sometimes marketed as ‘earned wage’ products) are subject to CFPB supervision, while other nonbanks in the personal loan market (e.g., buy-now-pay-later and installment lenders) generally are not.”
The CFPB said it plans rulemaking in response to the petition. However, while CFPB Director Rohit Chopra has not announced plans to step down, President-elect Trump is expected to appoint a new bureau director with policy priorities different from those of the current administration. It is uncertain whether the next CFPB director will pursue the rulemaking.
ABA Banking Journal: CFPB finalizes rule removing medical bills from credit reports
January 7, 2025
![CFPB warns against collection of ‘legally invalid’ medical debt](https://bankingjournal.aba.com/wp-content/uploads/2024/10/medical-debt-750x536.jpg)
The Consumer Financial Protection Bureau today finalized a rule removing medical debt and medical bills from credit reports. The rule also prohibits lenders from considering medical information when making lending decisions.
In 2003, Congress restricted lenders from obtaining or using medical information, including information about medical debts, but gave regulators the authority to issue a rule to protect lenders’ legitimate risk, consumer, and other needs. Federal regulators subsequently issued a rulemaking to protect lenders’ ability to use medical debts in their credit decisions pursuant to Regulation V, which implements the Fair Credit Reporting Act, or FCRA. The CFPB’s new rule amends Regulation V to remove that protection.
The American Bankers Association and other groups raised numerous concerns about the rule after it was first proposed, saying it would increase credit risk and reduce credit availability for consumers. ABA also said the rule violates the Administrative Procedure Act because the CFPB is giving itself authorities that Congress did not intend and the rule is not supported by adequate evidence or reasoning.
“Prohibiting consideration of medical debt in credit underwriting would reduce lenders’ ability to understand consumers’ credit risk and ability to repay,” the ABA said in comments to the bureau, with harmful consequences including “triggering tighter credit standards, higher prices, and reduced lending, and ultimately reducing access to consumer credit.”
Full Article
Order your 2025 South Dakota Bank Directory
The South Dakota Bank Directory provides detailed information on all South Dakota banks including addresses, telephone numbers, important contact names and additional pertinent information. The directory also contains information on the SDBA, banking associations, regulatory agencies, endorsed vendors, associate members and South Dakota officials.
Place your order for your 2025 SD Bank Directory!
All member branches and endorsed vendors receive one complimentary copy. Associate members also receive a complimentary copy once they pay their 2025 dues.
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The SDBA offers holiday signs that banks can print and display to notify customers when the bank will be closed for standard holidays. The signs are set up to be printed on 8.5” x 11” paper and are provided as a high-resolution pdf file. Banks can print the signs and use them how they see fit. www.sdba.com/holiday-signs
ABA Washington Summit
April 7-9, 2025 | Washington DC
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Join the biggest annual gathering of bank leaders in Washington to push for a bank policy framework that lets your bank stay focused on serving your customers, clients and communities. Hear directly from the key players in the 119th Congress and the new administration on what the future holds for banks of all sizes.
The SDBA is currently planning to attend the Summit and would like to invite you and your staff to participate as well. Registration is free and you can learn more and sign up here. Join us as we hear from top-notch speakers, connect with our congressional delegations' offices and dine with our friends at the NDBA. You won’t want to miss this opportunity to engage on multiple levels.
If you or one of your staff would like to attend, the SDBA will provide a $500 stipend (1 per member bank) to help defray the costs of any banker attending from a member bank not currently represented on the SDBA Board. There will also be an Emerging Leaders’ Forum and a Women’s Leadership Forum held in conjunction with the Summit.
Information and Registration
Breaking Into Banking 101 & 201
101: February 26, 2025 | 201: March 26, 2025
Breaking Into Banking 101: Commercial banking can be intimidating because of its complexity and the risk-oriented nature of the work. This course is a clear and thorough introduction to the key concepts, terminology, and processes involved in credit and lending. It doesn’t assume much prior knowledge of the topic, so it’s ideal for those in their first year in the industry. Learners will walk away with a clear understanding of their job and how their specific role fits into the bank’s overall profitability goals.
101 Information & Registration
Breaking Into Banking 201: This 9-module online course is a “sequel” to the 101 course and is best taken after completion of that course, though it is not a prerequisite. The 201 course includes a case study and dives deeper into topics covered in modules 4, 6, and 8 of the 101 course: analyzing a borrower’s balance sheet, income statement, collateral, and risk ratings.
201 Information & Registration
2025 Midwest Economic Forecast Forum
Prepare for 2025 by joining an economic discussion with Federal Reserve Bank President Austan Goolsbee. Time will be allowed for open Q&A during this virtual event. Bankers are encouraged to invite their business clients and local community leaders to tune in to these economic insights together. Individuals or group registration rates are available.
Information and Registration
Online Education
Participating in learning opportunities outside the bank can be challenging. Take advantage of the SDBA's extensive selection of webinars and on-demand training to enhance your banking expertise directly from your computer.
GSB Online Seminars OnCourse Learning SBS Institute
ABA Training
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Question of the Week
Q: What are some of the differences between a revocable and an irrevocable trust?
A: As trust laws (and the governing documents themselves) tend to be very nuanced and vary from state-to-state, the following is intended only to be a non-exhaustive, high-level view at some of the basic distinctions between a revocable and irrevocable trust.
Revocable trusts, broadly, are legal instruments / entities that can be amended, altered, or terminated (revoked) during the life of the trust subject to the wishes of the grantor of the trust. The beneficiaries of these trusts will most often be the grantor themselves, along with immediate family members or descendants (i.e. spouse, children, grandchildren, etc.). They are often called “living” trusts or “inter vivos”, as they exist during the lifetime of the grantor.
Irrevocable trusts, on the other hand (and as their name suggests) are generally much more “set in stone.” The grantor cannot modify, change, or terminate the trust or its terms after its creation. This is not exactly an absolute rule, as an irrevocable trust can in many cases be amended, but generally this can only be done via court order; moreover, this can usually only be done if all parties (the settlor, trustee, and beneficiaries) agree on the modification, if some of the parties (i.e. all of the beneficiaries but not the settlor, or even some of the beneficiaries and the settlor) agree. It can also be done circumstantially – that is, if the nature / purpose of the trust has changed / been undermined, or if the trust is no longer fiscally feasible. Lastly, you may see in a trust a clause called the “power of appointment” – this is a contingency granted to the settlor or trustee to change the trust (in likely very limited ways) per the terms of the trust – most often to select / add new trustees. These are often “testamentary” trusts, meaning that they are created via the Will of the settlor, and triggered upon their death.
Learn how to put compliance management solutions from Compliance Alliance to work for your bank, by contacting (888) 353-3933 or [email protected] and ask for our Membership Team. For timely compliance updates, subscribe to Bankers Alliance’s email newsletters.
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