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Banking News

CFPB Outlines Principles for Third-Party Data Access October 19, 2017

The Consumer Financial Protection Bureau yesterday issued nine guiding principles for protecting consumers that choose to share their financial data with third parties and data aggregators. The principles were released after the CFPB last year conducted a formal investigation into “screen scraping,” a process in which consumers provide their online banking credentials to a third-party app or tool. The principles do not reflect new or alter any existing guidance.

While the CFPB affirmed that consumers should generally have the ability to share their financial data, it noted that consumers should not be required to give up their banking credentials to do so. The principles establish that third parties that are granted access to customer data should use it only to the extent necessary to provide the products and services selected by the customer, and that the data should be accessed, stored and used safely and securely. In addition, the CFPB emphasized that consumers should have the ability to quickly review who has access to their data and have disputes over unauthorized access resolved in a timely manner.

ABA welcomed the CFPB’s commitment to protecting consumer financial data as new technologies continue to emerge, and noted that the principles incorporate several recommendations the association made in previous comments to the bureau. “Customers deserve bank-level security wherever they share their financial information, and the CFPB principles pay particular attention to protecting this sensitive data,” said ABA VP Rob Morgan. “ABA believes customers should understand and control how third parties use their information.”

Morgan added that per ABA’s recommendation, “CFPB recognized that customers should not be required to share their online banking username and password to facilitate data sharing. There are technologies that can facilitate more secure access, and the banking industry will continue to work closely with technology companies to give customers the ability to share their financial data securely.” View the principles.



State Associations Call for Continued Bipartisan Work on Reg Reform October 17, 2017

Fifty-one state bankers associations yesterday wrote to members of the Senate Banking Committee encouraging lawmakers to continue pursuing the goal of bipartisan regulatory reform. The associations called on the committee to include in its overall proposal for regulatory reform several bills that are part of ABA’s Blueprint for Growth, including those that would allow regulators to tailor actions based on banks’ business models and risk profile, revise capital and liquidity requirements and allow mortgage loans held in portfolios to be considered “qualified mortgages.”

In addition, the associations noted that several other legislative proposals for regulatory reform have support on both sides of the aisle, such as a bill to recalibrate the systemic risk designation process and a bill to allow banks to hold municipal bonds and accept municipal deposits. They also called for legislative action on stress testing and the Volcker Rule, both of which were highlighted in the recent Treasury Department report on regulatory reform.

“The cumulative weight of thousands of pages of new regulations and guidance has overwhelmed many of America’s financial institutions, resulting in the loss of 2,800 banks -- most of them community banks -- in the last decade,” the associations wrote. “It is of the utmost importance that our remaining member banks are able to provide products and services to consumers that are affordable and help grow communities.” Read the letter.



Cohn Slams Arbitrary Thresholds, Hints at $200B+ SIFI Level as Compromise October 17, 2017

Congressional leaders and the Trump administration are working on a plan to raise the asset threshold for systemically important financial institutions to at least $200 billion, Gary Cohn said yesterday at ABA’s Annual Convention -- while emphasizing the need to move beyond artificial thresholds altogether.

“We do think there is some real agreement on raising levels,” he said. “I think the $50 billion level has an enormous amount of traction in raising that from a legislative perspective,” adding that “there’s a shot” at accomplishing it in 2017 in a bipartisan way. “What we’re arguing about is where we’re going to end up,” he said, hinting that the threshold would be set at a level of “two plus two more numbers”; he later cited $225 billion as a point in the “middle” of discussions.

In conversation with Cohn, ABA President and CEO Rob Nichols emphasized that ABA is “pushing to get rid of these artificial asset thresholds ultimately,” but noted that raising them now would be a positive “interim step.”

“I don’t love the fact that we’re creating an artificial line,” Cohn replied. “The idea a bank would turn away a deposit because their balance sheet would get grossed up and be subject to more regulation is a little bit wacky.”

Cohn also discussed tax reform -- emphasizing President Trump’s commitment to lowering corporate rates and growing middle-income wages -- infrastructure permitting changes and the economic situation.



Top Trump Adviser: President Close to Filling Community Bank Seat on Fed Board October 17, 2017

The White House is close to naming a community banker to the Federal Reserve Board of Governors, National Economic Council Director Gary Cohn told ABA’s Annual Convention yesterday in Chicago. The candidate is currently receiving a federal background check, one of the final steps before the nominee can be announced.

“We’re going to fill the Fed seat for community banks,” Cohn said to applause. “We have someone that’s going through the FBI approval process and when they get through they’re going to be nominated.”

Noting that the personnel situation is “taking far longer than we thought it would,” Cohn urged the Senate to move on already-announced nominees for the OCC as well as commissioners on the Securities and Exchange Commission and the Commodity Futures Trading Commission. “We need to get the Senate to get our regulatory nominees approved,” he said. “That will do more to help the regulatory process than anything else we can do.”



House Panel Passes Eight ABA-Backed Bills October 13, 2017

The House Financial Services Committee yesterday advanced eight ABA-backed regulatory reform bills, including several that ABA and the state bankers associations have long championed as part of ABA's Blueprint for Growth. The Tailor Act (H.R. 1116), which would require regulators to tailor their actions to meet the diverse characteristics of different banks, cleared on a bipartisan 39-21 vote. The Systemic Risk Designation Improvement Act (H.R. 3312) -- which would replace the automatic $50 billion asset threshold to be designated a systemically important financial institution with a more nuanced, customized measurement -- sailed through on a 41-19 vote.

“We hope the full House will move quickly to approve these important bills, and that the Senate will also act expeditiously to approve commonsense regulatory reform that will allow America’s banks to do even more to grow the economy and create jobs,” said ABA EVP James Ballentine.

Also passing with bipartisan support were ABA-supported bills that would provide relief for smaller banks from new Home Mortgage Disclosure Act reporting (H.R. 2954), offer relief for smaller lenders with respect to escrow practices (H.R. 3791) and provide technical clarifications on privacy notices (H.R. 2396).

Other ABA-backed bills passed with unanimous or near-unanimous votes, including measures that would address custody bank issues (H.R. 2121) and ensure Operation Choke Point is never repeated (H.R. 2706). A bill that would repeal the Department of Labor’s fiduciary rule (H.R. 3857) passed on a party-line vote.



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Hurricane Response Video


The American Bankers Association was proud to join with banks across the country in supporting disaster relief after Hurricanes Harvey, Irma and Maria.

Here are a just a few of the stories of banks stepping up in Texas and Florida.

FS-ISAC Security Update

FS-ISAC Security Information Available to ABA Members

ABA members can now access FSā€ISAC security threat information via the FS-ISAC Weekly Risk Summary Report, designed for community institutions to deliver timely and actionable information on significant security threats.

Click here to access the most recent Weekly Risk Summary Report.