Suzanne Alwan

2 proposed rules today

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Is the Consumer Financial Protection Bureau overstepping (again)? The CFPB ensures that federal consumer financial laws are enforced consistently so that consumers may access markets for financial products, and so that these markets are fair, transparent, and competitive. Dodd-Frank carved out existing consumer financial laws, created new #UDAAP enforcement powers, and transferred authority to the Bureau with respect to largest categories of providers of such products and services. But does that authority extend to rewards programs such as points and other non-core card benefits? And is the CFPB relying too much on a small body of consumer complaints to justify systemic corrections? Just last year, the #CFPB and Office of the Comptroller of the Currency brought #enforcement actions against Bank of America (link: https://lnkd.in/g8JqCyjc), in which the #OCC and #CFPB recovered a collective $150 in penalties from the bank, in part because of alleged rewards program issues. Of course, the OCC's role makes sense: As the bank's prudential regulator, it broadly supervises national banks such as BofA. But the jurisdiction is arguably less clear for the CFPB although the marketing of such ancillary benefits to lure customers to a financial product might be a sufficient hook. #enforcement #creditcards #rewardsprograms

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At Georgia Primary Bank, we get it, but at the end of the day you should have a community banker you can rely on verses a digital bank, when you will need one. Gen Z’s Digital Lifestyle and Payment Choices are different and we get it. As the first U.S. generation to be considered true “digital natives,” this well-educated, 68 million strong cohort has no memory of a world that existed before smartphones or social media. Growing up with a smartphone no more than an arm’s length away, Gen Z uses their devices in ways formerly associated with traditional physical wallets. Thanks to third-party apps, documents such as driver’s licenses, passports, concert tickets and insurance cards can all be downloaded and stored digitally alongside their debit and credit cards. So they say 'Minimize My Life': The convenience of consolidating everything in one place reflects the minimalist lifestyle preferences of this generation. Whether they’re hopping on a bus, entering a busy venue, shopping online or in-store, Generation Z prefers the ease and convenience of completing a transaction with a few taps on their smartphone over the cumbersome process of rummaging through a wallet or purse. Moreover, the seamless integration of payments into digital platforms and services that Generation Z relies on daily, such as social media, messaging apps and e-commerce platforms, further underscores the alignment of their shopping and communication habits with their overall lifestyle preferences. The problem is when a Gen Z needs a banker. The digital world, as wonderful as it is, deals with you as an algorithm, not as a person. At Georgia Primary Bank, you are a person and when you truly need something other than making a deposit, we are there to serve you. 😀

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CTA Tip of the Day #20 Today FinCEN released an updated FAQ with new items C.12, C.13, C.14 and D.17. New FAQs C.12-14 provide clarity on how to treat reporting companies dissolved in 2024. According to the FAQs, an entity dissolved in 2024 must still file an initial BOI report. This is true whether that entity was formed before January 1, 2024 or after. Even if an entity is formed in 2024 and dissolved within 90 days (meaning before the initial BOI report would be due) there is still an obligation to file an initial BOI report. FAQ C.14 also makes clear there is no requirement to file a BOI report indicating an entity has ceased to exist. That FAQ does not, however, clarify if you need to file a report indicating a change of beneficial owners which occurred as part of the dissolution process. For example, senior officers may resign or someone who owned 25% of the reporting company may cease to do so. With regard to FAQ D.17, it provides some guidance on who should be reported as beneficial owners when an entity is partially or fully owned by an Indian Tribe. A portion of this FAQ has broader application, however, since it speaks to what should be done when a reporting company is partially owned by an exempt entity (like an Indian Tribe). FAQ D.17 says, “A non-exempt entity partially owned by an Indian Tribe should report as beneficial owners all individuals exercising substantial control over it, including individuals who are exercising substantial control on behalf of an Indian Tribe or its governmental authority.” This concept should apply to any exempt entity that partially owns a reporting company, meaning employees of an exempt entity or others may need to be disclosed as beneficial owners because they exercise substantial control over a reporting company that is only partially owned by that exempt entity. For example, assume a publicly traded company forms a joint venture LLC with a partner that is not itself and exempt entity. In that case the publicly traded company would need to identify as beneficial owners of that LLC employees who are exercising substantial control over joint venture LLC. https://lnkd.in/g2d4sepD

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S&P Global Ratings' Quarterly Banking Update is loaded with insights and snazzy charts. The two parts that really spoke to me were: 🔶 Slides 9-10 show continuing #NIM compression. Banks should be looking to #CRT as a way to grow higher rate lending capacity without having to recognize unrealized losses in their existing book. 🔶 Slide 22 shows the increase in lending to nonbank financials (e.g., fund finance, warehouse, private credit, indirect consumer). Banks that have not converted these asset classes to securitization structures should look into it as an easy way to optimize capital. https://lnkd.in/eMna4r-D

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The regulatory agendas are out! SEC, CFTC, FinCEN, FRB, FDIC, OCC, and CFPB release their Spring 2024 agendas – what made the “leaner” lists? Check out upcoming actions in such areas as AML/financial crime and cybersecurity. #KPMGRegulatoryAlert #Regulatory #AML #FinancialCrime #Cybersecurity https://dy.si/ZHjWY

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Dive into how the Future Bank Leaders Program is bridging the gap in the banking sector by fostering diversity and financial education! Read this interview with James Sills, CEO of M&F Bank NC, to discover why this innovative initiative is making waves across NC -> https://lnkd.in/ek3qtDdc   Don’t miss out—shape the future of finance today with #FutureBankLeaders!

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This news isn’t new, but still well worth remembering—last week the Supreme Court ruled CFPB’s funding is constitutional. CFPB Director Rohit Chopra hit the nail on the head when describing the organization's importance, stating "This ruling upholds the fact that the CFPB’s funding structure is not novel or unusual, but in fact an essential part of the nation’s financial regulatory system, providing stability and continuity for the agencies and the system as a whole.” With the CFPB fueling many of the new BaaS regulations and reshaping compliance for sponsor banks and fintechs, it’s important to remember that won't change in the future. The time to adapt and get compliant is right now. #cfpb #fraudprevention #fraudtech #fraudstrategy #bankingfraud

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On today’s Fintech Spotlight, Virginia Heyburn takes a deep dive into the fallout from the Synapse bankruptcy. The failure of Synapse has raised questions about the future of banking as a service, highlighting the need for specific regulation and the importance of trust and safety in the financial services industry. Listen to Virginia’s take on it here... #FintechSpotlight #Fintech #Synapse #BaaS #Regulation

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My statement on today's U.S. Supreme Court decision affirming the constitutionality of the #CFPB's funding structure: “Today’s decision by the U.S. Supreme Court to uphold the funding structure of the Consumer Financial Protection Bureau (CFPB) will help safeguard the financial wellbeing of everyday Americans. This ruling ensures that the significant progress made by the agency over the last decade to increase trust, transparency, and clarity in our country’s financial system remains intact. In its relatively short existence, the CFPB has achieved an impressive record of reform and enforcement, redirecting a whopping $17.5 billion back into the pockets of American consumers. It has curbed unfair and deceptive financial practices and enacted rules to strengthen transparency. Yet the banking sector, as a whole, has subjected the agency to consistent legal challenges and public pushback. This ruling resolves one looming threat to the only federal regulator specifically focused on protecting consumers, but opposition remains. I urge legislators to take further steps to strengthen the CFPB and create a banking system that is more healthy, resilient, and conducive to fair competition and innovation.” https://lnkd.in/g858QYSM

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Gain valuable insights into the current state of the economy. Our analysis delves into crucial aspects such as GDP, employment, and Federal Reserve policy. Check out the latest edition.

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Evolve Bank & Trust ("Evolve") was issued a C&D order today from the FRB and Arkansas State Department. The full order is attached and hits on different areas. What I found of interest and wanted to share is the very first item of the BSA/AML Compliance section, scroll to page 11 of the C&D. Essentially, at the top of the BSA/AML and OFAC deficiencies, the Regulators indicate that Evolve has to "identify all Fintech partners, business lines, activities and products" and ensure that these Fintech partners, business lines, activities and products are "appropriately risk-rated and included in the Bank's BSA/AML compliance program, policies and procedures."  Since a "Fintech partner" may not be viewed as a "customer" in the traditional sense and therefore may not be subject to the traditional "risk-rating" approach, it's interesting how the BSA/AML requirements are applied. Curious to know how others are handling such relationships?

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Gain valuable insights into the current state of the economy. Our analysis delves into crucial aspects such as GDP, employment, and Federal Reserve policy. Check out the latest edition.

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Broker-dealer friends: Check out our take on FINRA's recently issued cybersecurity case. As we say in the piece, it seems like the gloves are off. #finra #enforcement #brokerdealers

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