Weekly RoundUp
June 29, 2023

FDIC Refines Supervisory Strategy Concerning Multiple Re-Presentment NSF Fees Guidance

In this Weekly Roundup Issue. The Federal Deposit Insurance Corporation (FDIC) refined its supervisory strategy concerning multiple re-presentment non-sufficient funds fees; the Office of the Comptroller of the Currency (OCC) announced its new Cybersecurity Supervision Work Program and issued its updated Asset Management Booklet; and the Consumer Financial Protection Bureau (CFPB) released its annual report on the top financial concerns facing military families. These and other developments are discussed in more detail below.

In observance of Independence Day, our newsletter will be on hiatus next week. Our distribution will resume the week of July 10.

Regulatory Developments

FDIC Refines Supervisory Strategy Concerning Multiple Re-Presentment NSF Fees Guidance

On June 16, the FDIC revised its Supervisory Guidance on Multiple Re-Presentment Non-Sufficient Funds (NSF) Fees (FIL-40-2022). The revised guidance applies to all FDIC-supervised financial institutions, and specifically focuses on potential corrective actions following any discovered legal violations. This update comes in the wake of the FDIC's efforts to address the consumer harm resulting from re-presentment fees. The FDIC has based its updates on the collected data and the experience gained over time. As a result, according to the revised guidance, unless there's a considerable likelihood of substantial consumer harm, the new supervisory approach will not mandate an institution to perform a lookback review.

OCC Announces New Cybersecurity Supervision Work Program

On June 26, the OCC released a bulletin announcing the recent development and distribution the Cybersecurity Supervision Work Program (CSWP). The CSWP is intended to be used by examiners. The OCC recognized the need to update its approach to cybersecurity assessment because cyberattacks continue to evolve and banks should consider various standardized tools and frameworks to assess cybersecurity preparedness. The CSWP provides high-level examination objectives and procedures that are aligned with existing supervisory guidance and the National Institute of Standards and Technology Cybersecurity Framework. The CSWP does not establish new regulatory expectations, and banks are not required to use the CSWP to assess cybersecurity preparedness. Instead, the OCC simply encourages but does not require the use of standardized approaches to assess and improve cybersecurity preparedness and banks may choose from a variety of tools and frameworks.

OCC Issues Updated Asset Management Booklet

On June 22, the OCC issued its updated Asset Management booklet. The booklet, which is part of the Comptroller’s Handbook, applies to the OCC’s supervision of national banks, including limited purpose trust banks, and federal savings associations. The booklet describes the OCC’s supervisory processes and provides guidance on sound risk management processes for the asset management industry.

The new version of the booklet clarifies the OCC’s expectations with respect to fiduciary audit requirements and significantly expands the audit section.

These changes are only an initial update, and the OCC intends to publish a more comprehensive update to the entire booklet at a later date.

CFPB Report on Servicemembers Makes Recommendations for Digital Payment App Providers

On June 20, the CFPB released its annual report on the top financial concerns facing military families, including increased digital payment app usage in the servicemember community. Based on the risk to military families from fraud, scams, identity theft, and unauthorized account access when using digital payment apps, the CFPB recommended that digital payment app providers:

  1. Invest in privacy and security technology to safeguard their networks to prevent, identify, and limit fraudulent activity, including detecting and removing repeat offenders from their systems;
  2. Resolve servicemember complaints and reports of fraud in a timely and effective manner, coordinating closely and quickly with other parties, as needed; and
  3. Maintain policies that take a comprehensive approach to reimbursement when fraud occurs and that account for the unique circumstances of military families.

“Today's results confirm that the banking system remains strong and resilient. At the same time, this stress test is only one way to measure that strength. We should remain humble about how risks can arise and continue our work to ensure that banks are resilient to a range of economic scenarios, market shocks, and other stresses.”
- Michael S. Barr, Vice Chair for Supervision, Federal Reserve, commenting on the results of annual bank stress tests

Fintech Flash – Colorado Opts Out of Federal Interest Exportation for Consumer Credit: 3 Things Credit Card and Lending Programs Need to Know

Colorado House Bill 23-1229 (the Bill) was signed into law on June 5,2023. As part of the Bill, Colorado opted out of the federal interest exportation right granted to federally insured, state‐chartered banks under the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA). In this Fintech Flash, Goodwin’s team spotlights three important things you should know for credit card and lending programs. Read more here.

Nevada Enacts First-Of-Its-Kind Licensing Law For Earned Wage Access Services

Nevada has become the first state to enact a law that establishes a financial services licensing regime for earned wage access services (aka on-demand pay services), which allow workers to access earned but unpaid income before payday. The legislation (SB 290) passed with strong support in both Nevada’s assembly and senate, and the governor approved the law on June 15, 2023. The law imposes licensing, reporting, examination, and other substantive requirements on providers, and it provides important regulatory certainty for these innovative financial services. The law may shape similar legislation in other states.

A recent client alert shares insight on this new licensing law for EWA services.

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