ABA Bank Insurance Connection

DOL Seeks Feedback on Fiduciary Rule

noreply@blogger.com (ABIA Staff 3) — Wed, 05 Jul 2017 16:19:00 +0000

The Department of Labor last week issued a request for information on the fiduciary rule as part of its ongoing review of the rule in response to an executive order by President Trump. The rule, which greatly expanded the definition of who counts as a “fiduciary” under the Employee Retirement Income Security Act and the Internal Revenue Code, took effect June 9.

DOL is seeking input that could form the basis of new exemptions or other revisions to the rule, as well as input on the advisability of extending the Jan. 1, 2018, compliance deadline for certain provisions of the rule. Comments on the compliance deadline extension will be due 15 days after the notice is published in the Federal Register; all other issues in the RFI have a 30-day comment period.

ABA has strongly advocated for significant revisions to the fiduciary rule to achieve functionality, facilitate compliance, and ensure it does not negatively affect retirement products and services available to bank customers.

Read the request for information.

House Passes Five Flood Insurance Bills

noreply@blogger.com (ABIA Staff 3) — Thu, 22 Jun 2017 14:20:00 +0000

The House Financial Services Committee yesterday approved five bills as part of a legislative package intended to reauthorize the National Flood Insurance Program.

Lawmakers unanimously approved two American Bankers Association-supported bills: H.R. 2875, the National Flood Insurance Program Administrative Reform Act of 2017, which would make administrative changes to the NFIP to increase fairness and accuracy, and decrease taxpayer risk; and H.R. 1422, the Flood Insurance Market Parity and Modernization Act, which would encourage development of a robust private flood insurance market as an alternative to the NFIP. The committee also approved by a voice vote H.R. 1558, a bill introduced by Rep. Ed Royce (R-Calif.) to amend the National Flood Insurance Act of 1968 to ensure community accountability for areas repeatedly damaged by floods.

Additionally, the committee passed two bills introduced by Rep. Blaine Luetkemeyer (R-Mo.), H.R. 2264 and H.R. 2565, both of which ABA strongly supported. H.R. 2264, the Taxpayer Exposure Mitigation Act of 2017, would enable the NFIP to engage in private-sector risk transfer deals and would allow the development of private or community flood maps as an alternative to NFIP’s outdated maps. H.R. 2565 would require the NFIP to study how it uses replacement costs in setting premiums.

Together with H.R. 2874 and H.R. 2868, which were passed by the committee last week, the bills will now move to the full House for consideration. ABA will continue to work closely with lawmakers to ensure that the NFIP is renewed prior to its expiration date on Sept. 30.

Read more.

Trump Names Banking Lawyer to Lead FDIC

noreply@blogger.com (ABIA Staff 3) — Tue, 20 Jun 2017 14:23:00 +0000

On June 16, President Trump said he would nominate James Clinger to serve as FDIC chairman. According to the White House, Clinger will be nominated first to fill the long-vacant director position on the FDIC board and then nominated to serve a five-year term as chairman after Martin Gruenberg's term ends in November.

Clinger has been chief counsel to the House Financial Services Committee for a decade. During the George W. Bush administration, he served as a deputy assistant attorney general, prior to which he was a staffer on the Financial Services Committee for another decade. He began his legal career in private practice.

The announcement comes as Trump continues to fill out his financial regulatory team. The president recently announced that he would name Joseph Otting as comptroller of the currency. There are several vacancies on the Federal Reserve Board of Governors, and nominees are expected to be named soon for at least one of those posts.

ABA, Financial Trade Groups Meet with Trump Team on Tax Reform

noreply@blogger.com (ABIA Staff 3) — Tue, 20 Jun 2017 14:22:00 +0000

As the Trump administration works to advance its tax reform initiative, ABA yesterday took part in a meeting with representatives from the National Economic Council, Treasury Department and other financial industry groups to provide feedback.

ABA President and CEO Rob Nichols, who attended the meeting on behalf of ABA, expressed his support for pro-growth tax reform that includes lower rates and simplification. Nichols emphasized that the administration must carefully analyze the potential direct and indirect effects of certain proposals, such as those that would restrict the deductibility of net business interest expense. ABA continues to engage with the administration and take part in discussions with policymakers as tax reform moves forward.

House Passes Financial Choice Act

noreply@blogger.com (ABIA Staff 3) — Fri, 09 Jun 2017 14:42:00 +0000

The House yesterday passed the Financial Choice Act by a mostly party line vote of 233 to 186. The legislation is Financial Services Committee Jeb Hensarling’s sweeping, 600-page bill aimed at reforming parts of the Dodd-Frank Act’s extensive supervisory regime and providing regulatory relief for banks.

The bill includes a number of regulatory relief provisions long sought by ABA as part of its Blueprint for Growth, including a Qualified Mortgage safe harbor for mortgage loans held in portfolio, more tailored supervision based on an institution’s risk profile and business model, greater flexibility for savings associations, relief from various reporting requirements, and repeal of the Volcker Rule.

Included in the bill is a “regulatory off-ramp” for larger institutions subject to DFA’s heightened prudential standards and Basel III’s capital and liquidity standards, provided those institutions elect to maintain a 10 percent non-risk weighted leverage ratio. The Choice Act also focuses on ending “too big to fail” by replacing DFA’s Orderly Liquidation Authority with a new Bankruptcy Code designed to accommodate the failure of a large, complex financial institution.

Also targeted for reform by the bill is the Consumer Financial Protection Bureau, which would be renamed the Consumer Law Enforcement Agency and stripped of its examination powers and “UDAAP” enforcement authority. The agency would be led by a single director removable at will by the president, and subject to the congressional appropriations process.

The bill’s passage reflects an important step toward providing meaningful regulatory reform that will help America’s banks better serve their customers and communities, ABA President and CEO Rob Nichols said, though he noted that the bill “would have been much stronger had a provision to repeal the Durbin Amendment been retained.” With the bill’s passage, the fight for regulatory reform now shifts to the Senate.

Read ABA's statement.

Acosta: No Additional Delay for Fiduciary Rule

noreply@blogger.com (ABIA Staff 3) — Tue, 23 May 2017 14:15:00 +0000

Labor Secretary Alexander Acosta today announced that the Department of Labor will not delay the June 9 effective date for the fiduciary rule, which greatly expanded the definition of who counts as a “fiduciary” under the Employee Retirement Income Security Act and the Internal Revenue Code. Acosta wrote in a Wall Street Journal op-ed printed this morning that the Administrative Procedures Act, which governs federal rulemaking, would not allow a further delay.

"We...have found no principled legal basis to change the June 9 date while we seek public input," he wrote. "Respect for the rule of law leads us to the conclusion that this date cannot be postponed." While the new definition takes effect June 9, additional conditions -- such as specific disclosures and representations -- are not required until Jan. 1, 2018.

DoL issued a bulletin on its “temporary enforcement policy” of phased implementation. “The department has repeatedly said that its general approach to implementation will be marked by an emphasis on assisting (rather than citing violations and imposing penalties on) plans, plan fiduciaries, financial institutions, and others who are working diligently and in good faith to understand and come into compliance with the fiduciary duty rule and exemptions,” DoL said. “Accordingly, during the phased implementation period ending on Jan. 1, 2018, the department will not pursue claims against fiduciaries who are working diligently and in good faith to comply with the fiduciary duty rule and exemptions, or treat those fiduciaries as being in violation of the fiduciary duty rule and exemptions.”

Although Acosta declined to authorize a further delay, he said that DoL will continue its review of the final rule pursuant to an executive action by President Trump. "The Labor Department has concluded that it is necessary to seek additional public input on the entire fiduciary rule, and we will do so," he wrote. "Trust in Americans' ability to decide what is best for them and their families leads us to the conclusion that we should seek public comment on how to revise this rule."

ABA has strongly advocated for an additional delay and revisions to the rule to facilitate compliance and ensure it does not negatively affect the services available to bank customers. The association expressed disappointment that DoL decided to pursue implementation of a rule that it has said remains “fundamentally flawed and unworkable in critical areas.”

Read the enforcement policy bulletin.

Read FAQs on compliance.

Mnuchin: Administration Seeking Growth through Tax Reform, Reg Relief

noreply@blogger.com (ABIA Staff 3) — Fri, 19 May 2017 14:20:00 +0000

Testifying before the Senate Banking Committee yesterday, Treasury Secretary Steven Mnuchin said he is hoping to collaborate with senators on financial regulatory relief and housing finance reform. “This committee has done extensive work on [housing finance reform] along with your work on community financial institution regulatory relief,” he said. “I look forward to working with the Congress to develop a solution.”

The Treasury Department will soon release its first report responding to President Trump’s executive order outlining principles for regulatory reform, which Mnuchin said will include “recommendations to provide relief for community banks and make regulations more efficient, effective and appropriately tailored.” He added that a likely recommendation would be an exemption from Dodd-Frank Act supervisory requirements for banks with less than $10 billion in assets.

Regarding the nation’s largest banks, Mnuchin noted that “I do not believe that any [bank] is ‘too big to fail,’” and signaled that the administration is not in favor of breaking up large banks or returning to the Glass-Steagall Act’s separation of commercial and investment banking. Such a return could create significant issues for financial markets, liquidity and the economy, he said.

The administration will also continue moving forward with its tax reform plan as it pursues economic growth, Mnuchin said, adding that he believes a goal of 3 percent GDP or higher economic growth is achievable. “It is our goal to bring meaningful relief to middle income Americans and make American businesses competitive again. We will do this all while simplifying the system.”

In addition to tax reform and reg relief efforts, the administration will also ramp up its efforts on housing finance reform in the second half of the year, Mnuchin said. He committed to working with lawmakers on both sides of the aisle to find a workable solution for Fannie Mae and Freddie Mac, create greater liquidity in the housing market and minimize taxpayer risk.

ABA Calls for Revisions to Cyber Standards for Insurers

noreply@blogger.com (ABIA Staff 3) — Wed, 17 May 2017 13:01:00 +0000

ABA yesterday submitted comments to the National Association of Insurance Commissioners on its draft of the insurance data security model law, which would establish data security and data breach notification standards for insurance licensees (insurers and insurance agencies). ABA requested that the association add language to the draft stating that bank-affiliated insurance agencies be considered in compliance with the model law if their bank affiliates are in compliance with existing interagency data security standards.

ABA noted that the proposed model law for insurance licensees is very similar to existing guidance already followed by banks, and that in most cases, banks and their affiliated insurance agencies use the same information system to manage their customer data. By adding the proposed language, bank-affiliated insurance agencies would be allowed to comply with one set of requirements regarding cybersecurity, ABA said.

In addition, ABA requested that the model law be revised to allow insurance licensees more time to report a cybersecurity event to an insurance regulator. As currently drafted, they have only 72 hours to report an incident.

For more information, contact ABA's Sarah Ferman.

Covering Bank Risk - the basics of P&C coverage for banks

noreply@blogger.com (ABIA Staff) — Tue, 09 May 2017 18:20:00 +0000

Invite your bank risk managers to participate in a webinar that covers the basics of P&C coverage for banks. This P&C webinar presented by ABA Insurance Services is a must for anyone responsible for a bank's insurance program, where they will gain an understanding of the following:

Key terminology and definitions
Coverage options and other important policy provisions
Best practices to prevent common P&C claims
Purchasing considerations and other points of interest

ABA Insurance Services - an ABA subsidiary - is a managing general agency, program administrator and wholesale brokerage that offers professional and management liability lines, financial institution bonds, surety bonds, property and casualty liability insurance to banks and small businesses. Contact ABA's Steve Polestak with questions. 202.663.5577 https://aba.webex.com/aba/onstage/g.php?MTID=ea7d1b6ea2d0b4f1aad0accb77a29c1a4

House Health Care Bill Includes Several HSA Provisions

noreply@blogger.com (ABIA Staff 3) — Mon, 08 May 2017 13:46:00 +0000

The American Health Care Act of 2017, which was passed by a 217 to 213 vote in the House on Thursday, contains several provisions that would expand Americans’ ability to access health savings accounts.

Among other things, the bill would increase the annual HSA contribution limit; allow both spouses to make catch-up contributions to one HSA beginning in 2018; lower the tax penalty for non-qualified HSA distributions made after Dec. 31, 2017; and delay the so-called Cadillac tax on high-cost employer-sponsored health plans until 2026. It would also repeal the prescription requirement for over-the-counter medications, making withdrawals from HSAs tax-free beginning in the 2018 tax year.

Committee Approves Financial CHOICE Act to End Bank Bailouts, Promote Economic Growth

noreply@blogger.com (ABIA Staff 3) — Thu, 04 May 2017 17:49:00 +0000

Legislation to end bank bailouts, toughen penalties for wrongdoing on Wall Street, promote economic growth, and provide desperately needed regulatory relief for small community banks and credit unions passed the House Financial Services Committee 34-26 today.

The legislation – the Financial CHOICE Act – ends the Dodd-Frank Act’s taxpayer-funded bailouts of large financial institutions and imposes the toughest penalties in history on those who commit fraud and insider trading. The bill also demands greater accountability from Washington regulators and relieves well-capitalized banks from growth-strangling regulations that slow the economy and harm consumers.

Housing and Insurance Subcommittee Chairman Sean Duffy (R-WI) said, "Millions of Americans are still suffering from President Obama’s economic policies, and the disastrous Dodd-Frank Act. Since it was shoved through Congress, bank fees have gone up, free checking is all but gone, and small community banks have been choked out of existence. Dodd-Frank’s regulations have made it harder to achieve the American Dream. Thankfully, under Chairman Hensarling’s leadership, there is a better way. The Financial CHOICE Act is an off-ramp from Dodd-Frank’s rules and regulations, will help restore our small community banks and credit unions to their important role in our communities, and will jumpstart economic growth. I am pleased that several of my ideas are incorporated into the bill, including reining in the CFPB by prohibiting them from soliciting information on non-public personal information without your permission, putting a stop to the CFPB's wasteful use of taxpayer dollars, and making significant changes to the SEC on the registration of proxy advisory firms that prohibit unfair, coercive, and deceptive practices."

Read more.

Lawmakers Call for Further Delay of Fiduciary Rule

noreply@blogger.com (ABIA Staff 3) — Wed, 03 May 2017 13:10:00 +0000

In a letter yesterday to Labor Secretary Alexander Acosta, a group of more than 100 Republican lawmakers called for a delay to the fiduciary rule, which expands the definition of “fiduciary” under the Employee Retirement Income Security Act and the Internal Revenue Code. The implementation of the rule was recently postponed for 60 days following a White House memorandum.

Lawmakers expressed concern that the rule would affect small- and medium-sized investors’ ability to access financial advice, pointing to several brokerage firms and insurance companies that have already exited business lines or scaled back product offerings as a result of the rule.

ABA has long advocated for changes to the fiduciary rule and a longer implementation period to allow banks of all sizes time to comply. Together with several other trade associations last week, ABA requested a meeting with Acosta to determine a path forward to ensure that retirement savers are not negatively affected by the rule.

Read the congressional letter.

Read ABA's letter.

Luetkemeyer Introduces Flood Insurance Reform Bill

noreply@blogger.com (ABIA Staff 3) — Tue, 02 May 2017 20:33:00 +0000

Rep. Blaine Luetkemeyer (R-Mo.) yesterday introduced the Taxpayer Exposure Mitigation Act, which includes several flood insurance reform policies. The bill includes provisions to require risk transfer from the National Flood Insurance Program to the capital markets, in line with similar programs in place at Fannie Mae and Freddie Mac, and would exempt commercial loans from the mandatory purchase requirements, a concept that ABA generally supports but which may require further refinement to ensure adequate consumer protections.

ABA staff are working closely with members of the House and Senate on flood insurance reform, as the NFIP expires on Sept. 30. Sens. Bill Cassidy (R-La.) and Kirsten Gillibrand (D-N.Y.) recently introduced a separate flood insurance reauthorization bill, and ABA has expressed support for a proposal from Reps. Dennis Ross (R-Fla.) and Kathy Castor (D-Fla.) to develop a more robust private flood insurance market.

Read more.

TCPA - Bank Insurance Sales Conference

noreply@blogger.com (ABIA Staff) — Tue, 02 May 2017 17:42:00 +0000

Deepening practitioner knowledge and expertise is a key goal for the compliance sessions we offer at the Bank Insurance Sales Conference. So when the compliance committee asked for a session on the Telephone Communications Protection Act (TCPA), we wondered how we could build on a recent webinar on the topic.

We turned to ABA staff expert on TCPA, Senior Counsel Jonathan Thessin. He immediately thought of outside counsel with lots of practical experience with banks - how to design compliance telemarketing and much more. But he had some questions, too. How could we tease out different risks to different types of organizations? How could we identify the broad spectrum of potential risks - almost any phone could be considered an auto-dialer - yet highlight the ones that are most likely to be of concern to institutions?

Would you like to help us shape this session on TCPA for the Bank Insurance Sales Conference? Contact Deanne Marino, Bank Insurance Council Executive Director.

TCPA is one of seven compliance breakout sessions that will be offered at the Bank Insurance Sales Conference held September 11-13 in Ponte Vedra Beach, FL. Early bird will be available through June 1, with $400 savings per registration. Register now.

Senate Will Hold NFIP Reauthorization Hearing Part II

noreply@blogger.com (ABIA Staff 3) — Mon, 01 May 2017 15:03:00 +0000

The Senate Banking Committee will hold a hearing on, “Reauthorization of the National Flood Insurance Program, Part II” on Thursday, May 4 at 10:00am (ET). The witnesses will be: Mr. Steve Ellis, Vice President, Taxpayers for Common Sense, on behalf of the SmarterSafer Coalition; Mr. Michael Hecht, President and CEO, Greater New Orleans, Inc., on behalf of the Coalition for Sustainable Flood Insurance; and Mr. Larry Larson, Director Emeritus, Senior Policy Advisor, Association for State Floodplain Managers.

Senators Cassidy and Gillibrand Release NFIP Extension Draft Legislation for Comment

noreply@blogger.com (ABIA Staff 3) — Wed, 26 Apr 2017 19:14:00 +0000

Today, US Senators Bill Cassidy, MD (R-LA) and Kristen Gillibrand (D-NY) released draft legislation to reauthorize the National Flood Insurance Program (NFIP) for 10 years. The NFIP is currently set to expire on September 30, 2017.

This proposed legislation would reauthorize the NFIP over a 10-year term (2017-2027), which is needed to avoid short-term extensions and program lapses that create uncertainty in both the insurance and housing markets.

This legislation also takes to reform the program by addressing:

Affordability and accessibility

Solvency and sustainability

Private market access, accountability, and competition

Flood mapping and flood risk accuracy

Transparency and accountability

For a full summary of the bill, click here.

To review of the Draft legislation, click here.

Hensarling's Choice Act Includes Key ABA Priorities

noreply@blogger.com (ABIA Staff 3) — Thu, 20 Apr 2017 19:29:00 +0000

House Financial Services Committee Chairman Jeb Hensarling (R-Texas) yesterday released the latest legislative text of his Financial Choice Act, a 600-page bill aimed at rolling back and reforming parts of the Dodd-Frank Act’s extensive supervisory regime, as well as providing regulatory relief for banks of all sizes. A similar version of the legislation cleared the committee in the previous Congress. The committee is scheduled to hold a hearing on the bill next week.

Title V of the Choice Act contains numerous provisions long sought by ABA as part of the Blueprint for Growth. These regulatory relief measures would provide a Qualified Mortgage safe harbor to mortgage loans held in portfolio, tailor supervision to banks’ risk profiles and business models, raise the small bank holding company policy statement asset threshold to $5 billion, create an independent exam appeals process, provide charter flexibility for thrifts, stop data collection on small business loans, clarify the QM rule’s points and fees test, expand the short-form Call Report, enhance mortgage relief for smaller banks and smaller mortgage originators and prevent future “Operation Choke Point” activities.

The bill further details plans to reform the Consumer Financial Protection Bureau, which would be renamed the Consumer Law Enforcement Agency and would be stripped of examination powers and “UDAAP” enforcement authority. The Choice Act would also repeal the Durbin Amendment, impose more stringent penalties for Wall Street in cases of fraud or deception and repeal sections of Dodd-Frank that limit capital formation, including the Volcker Rule. It would bring the new CLEA, FDIC, OCC, Federal Housing Finance Agency, National Credit Union Administration and supervisory functions of the Federal Reserve into the congressional appropriations process, mandate cost-benefit analyses of regulations and require congressional approval for “major rules.”

Additional regulatory relief would be available for banks maintaining a 10 percent non-risk weighted leverage ratio that elect into the alternative regime. Qualifying banks would be exempt from federal capital and liquidity requirements, blocks on capital distributions, systemic risk regulations and limitations on mergers and acquisitions provided any new entity also maintains the minimum leverage ratio.

Another key component of the Choice Act is ensuring no institution is “too big to fail” by replacing Dodd-Frank’s Orderly Liquidation Authority provision with a new Bankruptcy Code designed to accommodate the failure of a large, complex financial institution. Additionally, it significantly restricts the Federal Reserve’s ability to make discounted loans or bail out financial firms or creditors. ABA will analyze the full text of the Choice Act in coming days and provide further information to members.

View the full text of the bill.

ABA Shares Insurance-Related Concerns on Fiduciary Rule

noreply@blogger.com (ABIA Staff 3) — Wed, 19 Apr 2017 15:57:00 +0000

ABA’s Bank Insurance Council on Monday wrote to the Department of Labor seeking clarifications and changes to its fiduciary rule affecting banks that sell insurance. Specifically, ABA urged DoL to revise the rule’s definition of “investment property” to exclude products regulated as insurance by state authorities.

ABA also asked DoL to clarify that the rule does not apply to minimum distributions once funds have been distributed and that periodic distributions from retirement plans into insurance policies entered into before the rule takes effect are exempt. The effective date of the fiduciary rule has been delayed to June 10.

The rule, which expanded the definition of “fiduciary” under the Employee Retirement Income Security Act and the Internal Revenue Code, was the target of a recent executive action by President Trump, who directed the secretary of labor to thoroughly review the rule’s effect on Americans’ ability to access financial services.

Read the letter.

For more information, contact ABA’s Sarah Ferman.

Fiduciary Rule Implementation Date Moved to June

noreply@blogger.com (ABIA Staff 3) — Wed, 05 Apr 2017 15:36:00 +0000

The Department of Labor has unveiled a final rule postponing the applicability deadline of its “fiduciary rule” for 60 days. On Friday, DoL will publish in the Federal Register a rule extending the deadline from April 10 to June 9.

The rule, which expanded the definition of “fiduciary” under the Employee Retirement Income Security Act and the Internal Revenue Code, was the target of a recent executive action by President Trump, who directed the secretary of labor to thoroughly review the rule’s effect on Americans’ ability to access financial services. The delay will provide the DoL additional time to determine the rule’s full impact on consumers, and, if necessary, issue a new proposal for revising or rescinding the rule.

ABA strongly advocated for an even longer implementation period to allow banks of all sizes time to comply. ABA has also urged DoL to revisit the economic and legal analysis undergirding the rule, noting that it remains fundamentally flawed.

Read more.

High Court Orders Closer Look at New York Credit Card Fee Law

noreply@blogger.com (ABIA Staff 3) — Thu, 30 Mar 2017 16:30:00 +0000

By: McIntyre & Lemon, PLLC

Yesterday, the Supreme Court of the United States held that a New York law that
prohibits merchants from charging customers a credit card fee – also known as a “swipe
fee” – if they refer to the fee as a “surcharge,” may violate the First Amendment and has
ordered a lower court to take a second look at the law. The case is relevant to banks and
insurance agencies that permit their customers to charge insurance premiums on a credit
card.

The case involves several New York State merchants that would like to charge
their customers swipe fees. The merchants would also like to call the swipe fees
“surcharges,” an amount that is added on to the regularly posted price.

Currently, the New York law prohibits merchants from adding swipe fees as a
surcharge. Instead, the law allows merchants to offer discounts if customers pay in cash.

The merchants argue that because the law prohibits surcharges but allows
discounts, the law does nothing more than ban the way the merchants can communicate
the swipe fees. Put another way, the merchants argue that the law does not regulate
whether they can charge credit card customers more than cash customers (to account for
the swipe fee). The law only prohibits the merchant from describing the difference in the
price as a “credit card surcharge.” They must instead call the difference a “cash
discount.”

For example, assume a product costs $10.00 but it costs $10.30 to buy it with a
credit card. It is permissible to say that the product’s price is $10.30, but that there is a
30 cent discount if the customer pays by cash, but it is not permissible to say the
product’s price is $10.00 but there is a 30 cent surcharge if the customer pays with a
credit card.

The Supreme Court sought to answer two questions about the law: (1) does the
law regulate speech (as the merchants claim), which would implicate First Amendment
concerns; and (2) if the law does regulate speech, does it violate the First Amendment’s
Free Speech guarantee?

On the first question, the Supreme Court was convinced by the merchants’
arguments. The Court found that the New York law did not regulate what the merchants
could charge cash customers and credit card customers. Moreover, it did not prohibit
merchants from charging customers different amounts based on their payment methods.
But “[w]hat the law does regulate is how sellers may communicate their prices. A
merchant who wants to charge $10 for cash and $10.30 for credit may not convey that
price any way he pleases.”

Thus, the Court concluded, “[i]n regulating the communication of prices rather
than prices themselves, [the New York law] regulates speech.” This raises First
Amendment concerns.

On the second question, whether the law violates the First Amendment, the Court
punted. The Court noted that the lower court, the Second Circuit Court of Appeals, did
not address this second question. According to the Supreme Court, there may be valid
reasons for a state to enact this law. That would mean that the law does not violate the
First Amendment even though it raises First Amendment concerns. The Court wants the
Second Circuit to address this question first.

The Court has sent the case back to the Second Circuit and ordered the lower
court to consider whether this law, which regulates speech, violates the First Amendment.

This decision means that the case is still ongoing and has not decided whether
laws that prohibit credit card surcharges (but allow discounts) are unconstitutional.

Community Bank Leaders Meet with Trump at White House

noreply@blogger.com (ABIA Staff 3) — Fri, 10 Mar 2017 16:20:00 +0000

Six of ABA’s community bank leaders, joined by three officers from the Independent Community Bankers of America, met with President Trump at the White House yesterday for a “listening session” on the challenges that community banks face and how the regulatory environment can be reformed to promote job creation and economic growth.

Bankers raised topics like tailored regulation, accountability for the Consumer Financial Protection Bureau, regulation of small business and mortgage loans and the need to align regulatory capital requirements with risk.

“Community banks play a vital role in helping create jobs by providing approximately half of all loans to small businesses,” Trump said. “We must ensure access to capital for small business to grow. Community banks [are] the backbone of small business in America. We are going to preserve our community banks.”

Representing ABA members were ABA Chairman Dorothy Savarese, chairman, president and CEO of Cape Cod Five Cents Savings Bank, Orleans, Mass.; Chairman-Elect Ken Burgess, chairman of FirstCapital Bank of Texas, Midland, Texas; Vice Chairman Jeff Szyperski, chairman, president and CEO of Chesapeake Bank, Kilmarnock, Va.; Leslie Andersen, president and CEO of Bank of Bennington, Bennington, Neb.; Luanne Cundiff, president and CEO of First State Bank, St. Charles, Mo.; and Laurie Stewart, president and CEO of Sound Community Bank, Seattle.

Also participating were Treasury Secretary Steven Mnuchin; National Economic Council Director Gary Cohn; ABA President and CEO Rob Nichols; ICBA Chairman Rebeca Romero Rainey, chairman and CEO of Centinel Bank, Taos, N.M.; ICBA Chairman-Elect Scott Heitkamp, president and CEO of ValueBank Texas, Corpus Christi, Texas; ICBA Vice Chairman Tim Zimmerman, president and CEO of Standard Bank, Monroeville, Pa.; and ICBA President and CEO Cam Fine.

“Today’s meeting is an important step toward policy changes that will allow banks to go even further in helping communities and our economy thrive,” said Nichols. “The diversity and strength of our banking industry is the envy of the world. However, in the current regulatory environment, highly prescriptive rules mean that mortgages don’t get made, small businesses don’t get created and banks find it more difficult to make the loans that drive job creation. This is particularly true for community banks.”

Read more.

HFSC Committee Holds Hearing on "Flood Insurance Reform: FEMA's Perspective"

noreply@blogger.com (ABIA Staff 3) — Thu, 09 Mar 2017 18:11:00 +0000

Today, the House Financial Services Committee held a hearing addressing private flood insurance reform and the National Flood Insurance Program (NFIP) reauthorization. Testifying was Roy Wright, Deputy Associate Administrator, Federal Insurance and Mitigation Administration, at FEMA. Director Wright reiterated his support for a private flood marketplace and emphasized the importance of bringing transparency to the financial framework of the flood insurance program and the need to address barriers to meeting the needs of customers.

Representative Sean Duffy, Chairman of the Housing and Insurance Subcommittee, led the hearing and questioned Director Wright on the plan or ability for FEMA to pay back the NFIP debt and also requested official data on compliance rates for mandatory purchase requirements. Currently, the NFIP has about 5.1 million policies providing over $1.2 trillion in coverage in almost 22,000 communities in 56 jurisdictions. The NFIP has an outstanding debt of $24.6 billion borrowed from taxpayers, with $5.825 billion remaining of its total temporary $30.425 billion Treasury borrowing authority.

Read the full Committee memorandum.

Private Flood Legislation Reintroduced in Both House and Senate

noreply@blogger.com (ABIA Staff 3) — Wed, 08 Mar 2017 21:37:00 +0000

Today, U.S. Rep. Dennis A. Ross (R-FL), reintroduced H.R. 1422, the Flood Insurance Market Parity and Modernization Act, with Rep. Kathy Castor (D-FL). This legislation would encourage the development of a private flood insurance market that can offer homeowners options in terms of pricing and coverage. Senator Dean Heller (R-NV) and Senator Jon Tester (D-MT) also reintroduced the Senate version of the bill, S. 563. Last year, this legislation passed in the House of Representatives by a 419-0 vote.

The American Bankers Association has long supported both legislative and regulatory efforts to ensure that private flood insurance policies are more readily available as an alternative to the NFIP. We strongly support the efforts to pass legislation making this possible.

Providing consumers with alternatives to the National Flood Insurance Program (NFIP) and driving down flood insurance prices through greater competition is one way to ensure greater protection for consumers against flood damages in the mortgage markets; it is also a significant contribution to the goal of returning the NFIP to more robust fiscal health. Additionally, your legislation will make it possible for borrowers and lenders to shop for flood insurance in the same manner currently provided for home owners’ insurance. This simplification of the process will make it vastly easier for borrowers to obtain flood insurance at a competitive price.

Department of Labor Proposes Extension to the Applicability Date for the Fiduciary Duty Rule

noreply@blogger.com (ABIA Staff 3) — Wed, 01 Mar 2017 20:56:00 +0000

Today the U.S. Department of Labor proposed to extend the applicability date for the Fiduciary Duty Rule. The proposal will be published in tomorrow’s (March 2) Federal Register. The proposed rule would extend the applicability date for the Fiduciary Duty Rule from April 10 to June 9, 2017. The purpose of the extension is to give the Department of Labor time to respond to a presidential memorandum that directed the Department to determine whether the Fiduciary Duty Rule would harm the ability of Americans to obtain retirement information and financial advice. The Department also is required to draft an updated economic and legal analysis of the rule’s likely impact.

ABA is encouraging short comments to support the proposed extension, so that the rule to delay can be approved prior to the April 11 applicability deadline. Comments on the proposed extension of the effective date are due 15 days after the proposed rule’s publication in the Federal Register.

Trump Orders Agencies to Create Regulatory Reform Task Forces

noreply@blogger.com (ABIA Staff 3) — Mon, 27 Feb 2017 16:42:00 +0000

President Trump on Friday issued an executive order as part of his administration’s efforts to reduce regulatory burdens. The order requires agencies to appoint regulatory reform task forces led by regulatory reform officers, with a mandate to identify regulations that eliminate jobs or inhibit job creation; are outdated, unnecessary or ineffective; have costs that outweigh their benefits; are inconsistent with regulatory reform initiatives; or derive from since-rescinded executive orders. Initial reports are due within 90 days.

Read the order.

Read the release.