ABA Dodd-Frank Tracker

2013 Outlook for Payments Industry

2013-01-17T07:43:00.000-05:00

The January issue of The Credit Line, a new digital newsletter about credit card trends developed by ABA for policymakers, features an outlook on the payments industry’s future. The stories include insights from industry experts, survey data on what consumers want to see in 2013 and seven trends that will have the greatest impact on U.S. financial institutions this year.

Read January’s The Credit Line.

Mobile Payment Systems Could Change Financial Services Industry

2012-03-20T12:49:00.002-04:00

Richard Oliver, co-author of the Mobile Payments in the United States; Mapping out the Road Ahead, spoke to the Financial Institutions and Consumer Credit Subcommittee today at a hearing entitled “The Future of Money: How Mobile Payments Could Change Financial Services.”

Oliver summarized the findings of research teams from the Federal Reserve Banks of Atlanta and Boston on the state and potential for the deployment of mobile payment options in the U.S. Over the course of the research, the Mobile Payments Work Group (MPWG) was developed and has identified key factors which must be met to ensure a successful and safe mobile payment system in the U.S.

These factors included: the proposed environment would be best defined by the concept of an “open mobile wallet,” standards would be designed, adopted, and complied with through an industry certification program, and a better understanding of a regulatory oversight model should be proactively developed in concert with banks and non-bank regulators to clarify compliance responsibilities.

Read more about the hearing and Richard Oliver’s testimony.

ABA Announces Payment Systems Task Force

2012-03-05T12:30:00.000-05:00

ABA has announced the formation of the Payment Systems Task Force, an assembly of bankers who will develop proactive strategies to ensure a strong, safe and efficient payments market. The task force will work to ensure new payment technologies promote competitive access for and participation by banks of all sizes and charters.

The task force leader ABA Vice Chairman Jeff L. Plagge stated:

With many emerging digital and mobile payment solutions, it is important to ensure competitive access and participation for banks of all sizes and charters. The Payment Systems Task Force will work to ensure consumers benefit from the safety and security provided by bank-operated payment solutions.

Read the full press release.

Credit Scores, Payment Choice and Durbin

2012-02-29T15:53:00.000-05:00

The policy implication from a recent paper released by the Federal Reserve Bank of Boston is that younger, less educated, and lower income consumers, as a group, may be adversely affected by the Durbin interchange fee cap.

The study looked at the relationship between credit scores and consumer payment choices. It found that even when controlling for several variables that affect payment behavior, consumers with a higher credit score have a higher probability of holding a credit card, and a lower probability of holding a debit card. Moreover, cardholders with higher credit scores were found to use credit cards for a higher share of their payments and use debit cards less.

The study postulates that if financial institutions attempt to recoup forgone interchange revenues due to the Durbin amendment by charging a debit card fee, consumers with low credit scores are more likely to be harmed by a debit card fee. Low credit score consumers -- who tend to be younger, less educated and lower income -- use debit cards more intensively than those with high credit scores because their access to alternative means of payment is restricted.

Read the paper.

CFPB Updates Credit Card Contract Definitions

2012-02-29T11:38:00.000-05:00

The CFPB recently updated its list of definitions for credit card contracts.

See the updated page.

ABA Recommends Ongoing Discussion on Systemic Risk

2011-05-23T12:52:00.000-04:00

Last week, ABA submitted comments to the Federal Reserve recommending ongoing discussion on standards for institutions identified as systemically important (DFMU's). The current proposal adopts an international standard known as the Committee on Payment and Settlement Systems Core Principles, CPSS Publications 43. Further discussion would improve the risk management efforts to protect payment systems.

Read ABA's comments.

FSOC Proposed Rule on Heightened Supervision for Designated Financial Firms

2011-03-18T14:34:00.002-04:00

This week the Financial Stability Oversight Council issued a proposal on the designation of financial market utilities for heightened supervision by the Federal Reserve. Dodd-Frank mandates increased supervision for financial companies that are deemed to be systemically important.

Comments will be due 60 days after the proposal’s publication.

See the proposal.
See a review of the March 18th meeting.
See ABA's regulatory proposal page.

In other news, Illinois insurance commissioner Michael McRaith was appointed to be the first director of the new Federal Insurance Office. He will be a non-voting FSOC member.

Treasury Considers Criteria for Systemically Important Institutions

2010-11-24T11:01:00.006-05:00

Yesterday, Treasury issued an advanced notice of proposed rulemaking (ANPR) regarding the criteria the Financial Stability Oversight Council (FSOC) will use to designate financial market utilities (FMU) as systemically important. The proposal hasn’t officially been published in the Federal Register yet, but the comment deadline is expected to be late December.

The ANPR asks for comment on ten questions about the criteria and analytical framework that should be applied by the FSOC when designating FMUs. The questions involve, among other things, measuring and assessing the aggregate monetary value of transactions that financial market utilities process, and also the aggregate exposure of such utilities engaged in payment, clearing, or settlement activities to their counterparties.

Read the published proposal.

Read the Staff Analysis.