Apple Pay to Launch Monday with 500 New Banks October 17, 2014
Apple Pay will launch on Monday, Oct. 20, according to Apple CEO Tim Cook. He stated that Apple Pay has signed up 500 new banks in addition to the six largest card-issuing U.S. banks that were included in the original announcement of Apple Pay in September.
Apple Pay will be available Monday with the iOS 8.1 software update for the iPhone 6. The new iPhone is equipped with near field communication technology that allows a user to make payments at participating merchants using the existing card network system.
To increase security, Apple Pay uses tokens that create one-time card numbers for each transaction and requires a biometric fingerprint scan to complete the payment. Even if card transaction data were breached at a point of sale, the card issuer would not need to reissue the card.
AmBA has issued a staff analysis to update bankers on the new payment platform, including cost considerations, revenue projections, security enhancements, customer demand and next steps. Click here to read the analysis.
USDA Guaranteed Farm Loan Scandal Triggers Banker Worries October 17, 2014
Alleged fraud on the part of a nonbank U.S. Department of Agriculture guaranteed farm loan originator has raised concerns that community banks that invest in USDA-guaranteed loans may be on the hook for losses.
The scandal, detailed in the October 16 issue of The American Banker newspaper, involved allegedly fabricated loan guarantee forms issued by a USDA-approved originator and purchased by an investment company in which banks invest. At least one bank has disclosed that it may face fraud losses nearly equivalent to its equity capital, the newspaper reported.
Concerned bankers holding USDA-guaranteed loans are encouraged to contact the entity from which they were purchased, as well as the local USDA office that issued the guarantee, to verify that the loans they hold are genuine.
Keating Discusses Reg Burden, Housing Market on Bloomberg October 2, 2014
The consolidation of community banks is due to excessive regulatory costs, ABA President and CEO Frank Keating said in an appearance on Bloomberg’s “Bottom Line” program yesterday.
Noting that we have lost, on average, one bank per weekday since 2008, he emphasized that “many of them were merged or sold because of the regulatory burden -- 15 to 20 percent of your operating income going to compliance. That’s silly, and I hope the regulators would recognize that to stifle a vital part of the financial services marketplace is not in the country’s best interests.”
Keating also discussed the housing market. He observed that sluggish wage and job growth, as well as student debt, are inhibiting the market, but he also fingered the Dodd-Frank mortgage rules, which he called “pretty strict” in their check-the-box limitations. Watch the video.
ABA, Other Financial Trade Groups to Operate .bank Domain September 30, 2014
ICANN, the international body that governs Internet domains, yesterday authorized fTLD Registry Services to operate the newly created top-level domain “.bank.” fTLD -- founded and operated by ABA, the Financial Services Roundtable and other industry organizations -- expects .bank to be available in 2015 for registration exclusively by verified banking industry participants.
“Our organizations took the lead on this to ensure that the banking industry -- not outsiders -- would operate .bank, and that only legitimate members of the banking community could have a .bank site,” said ABA President and CEO Frank Keating. “We took this on in order to protect the interests of our industry and preserve customers’ trust in banking.”
ABA and FSR established fTLD in 2012 when ICANN signaled that it would accept applicants to operate .bank and an array of new top-level domains being created to join the more familiar .com, .org and .net. fTLD will employ strict standards for registration and security. The new domain, for example, will help prevent users from being redirected to fake bank websites, help make it more difficult for criminals to create spoofed emails from a .bank website and provide a higher level of encryption.
More information is available at aba.com/dotbank. Once the .bank domain is available for registration, fTLD will have a website where banks will be guided through the registration process. Read ABA's FAQs on .bank.
ABA, FS-ISAC, FFIEC Offer Resources on Shellshock Bug September 29, 2014
As businesses and customers respond to the Bash Shellshock bug -- a security vulnerability affecting Unix-based operating systems, such as Linux and Mac OS X -- ABA, the Financial Services Information Analysis and Sharing Center and the Federal Financial Institutions Examination Council offered resources for bankers and their customers.
In a statement, FS-ISAC labeled it a “significant threat to systems and networks” and urged banks and their partners to “identify and remediate vulnerable systems using a prioritized, risk-based approach.” FS-ISAC also warned about “cross-sector exposure” due to the pervasiveness of Unix-based systems.
ABA on Friday issued an FAQ for bankers to use in explaining Shellshock, emphasizing that bank customers are always protected from unauthorized transactions and reminding customers to update their passwords regularly to keep themselves safe online.
The full FS-ISAC statement and sample memos for use by bank risk officers are available exclusively for ABA members at aba.com/cybersecurity. ABA encourages banks to become members of FS-ISAC in order to share and receive up-to-date information about emerging cyber threats. View ABA’s FAQ page here. View the FFIEC advisory information here.
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