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National Credit Union Administration (NCUA)
NCUA and CDFI Hosting Nov. 8 Webinar on Small Dollar Lending Program
Credit unions interested in the Community Development Financial Institutions Fund Small Dollar Loan Program can get valuable information on a Nov. 8 webinar hosted by CDFI and the National Credit Union Administration. CDFI Fund associate program manager Julie Sandler and Amy Apitz, management and program analyst at the Fund, will discuss how CDFI-certified credit unions use award funds to help unbanked and underbanked members build credit, acquire affordable capital, and gain greater access to the mainstream financial system.
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Consumer Financial Protection Bureau (CFPB)
CFPB Report Finds Credit Card Companies Charged Consumers $130 Billion in Interest and Fees in 2022
The CFPB released its biennial report to Congress on the consumer credit card market. The report found that in 2022 credit card companies charged consumers more than $105 billion in interest and more than $25 billion in fees. Total outstanding credit card debt eclipsed $1 trillion for the first time since the CFPB began collecting this data. The report highlights areas of concern, including more consumers carrying balances month to month, with many falling deeper into debt over time, while credit card company profits remained significantly above pre-pandemic levels.
The report also highlighted that of the $25 billion in fees, $14.5 billion of that was for late fees.
Small Business Lending Data Collection Rule Stayed
On Thursday October 26, 2023, the U.S. District Court for the Southern District of Texas issued an order that expanded its initial partial injunctive relief to include all financial institutions. This means that the CFPB’s 1071 rule for the collection and reporting of small business lending data is stayed for all financial institutions, including credit unions.
The injunction relies heavily on the U.S. 5th Circuit Court of Appeals decision in Community Financial Services Association (CFSA) v CFPB, which found the CFPB’s funding structure unconstitutional and, therefore, rules promulgated by the CFPB invalid. On October 3rd, 2023, the Supreme Court of the United States (SCOTUS) heard oral arguments on the appeal of the 5th Circuit Court ruling. The injunction would dissolve if SCOTUS reversed the 5th Circuit Court in the CFSA case.
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Federal Reserve Board (FRB)
Agencies Issue Principles for Climate-Related Financial Risk Management for Large Financial Institutions
The FRB, FDIC, and OCC jointly issued finalized principles that provide a high-level framework for the safe and sound management of exposures to climate-related financial risks for large financial institutions.
The principles are consistent with the risk management framework described in the agencies' existing rules and guidance. The principles are intended for the largest financial institutions, those with $100 billion or more in total assets, and address physical and transition risks associated with climate change.
The principles are intended to support efforts by the largest financial institutions to focus on key aspects of climate-related financial risk management. General climate-related financial risk management principles are provided with respect to a financial institution's governance; policies, procedures, and limits; strategic planning; risk management; data, risk measurement, and reporting; and scenario analysis. Additionally, the principles describe how climate-related financial risks can be addressed in the management of traditional risk areas, including credit, market, liquidity, operational, and legal risks.
FRB Proposed Rule to Lower Maximum Interchange Fee That Large Debit Card Issuers Can Receive
The FRB issued a proposed rule that would reduce the interchange fee cap for debit card issuers with $10 billion or more in assets. Under the current rule, for a debit card transaction that does not qualify for a statutory exemption, the interchange fee can be no more than the sum of a base component of 21 cents, an ad valorem component of 5 basis points multiplied by the value of the transaction, and a fraud-prevention adjustment of 1 cent if the issuer meets certain fraud-prevention- standards. Under the proposal, the base component would be 14.4 cents, the ad valorem component would be 4.0 basis points (multiplied by the value of the transaction), and the fraud-prevention adjustment would be 1.3 cents for debit card transactions performed from the effective date of the final rule to June 30, 2025.
For example, the cap on an average-sized $50 debit card transaction would decline from 24.5 cents under the current rule to 17.7 cents under the proposal.
e a connection between the suspicious activity being reported and this alert.
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