The 21st Century ROAD to Housing Act increased the amount of reciprocal deposits banks can treat as nonbrokered. Before diving into this week’s stories, sign up for our webinar on Sept. 16 at 3 p.m. ET to hear about the potential impact on banks’ funding strategies.
“Your Bank’s Front Door Shouldn’t Keep Good Customers Out”
Account-opening friction may be costing banks customers, with a new report from Cornerstone Advisors identifying more than three abandoned digital applications for every one completed. What’s more, while identity verification is a leading source of friction, research cited in the article suggests verification hurdles aren’t always effective in stopping determined fraudsters.
“How to Lessen the Chargeback Burden on Community Banks”
Chargebacks can drain a bank’s resources, but they need to be handled correctly to avoid damaging customer relationships. This article highlights tools community banks can use to recover chargeback losses, resolve disputes before they escalate, and reduce unnecessary disputes through data and customer education.
“OCC, FDIC Cement Drill-Down on ‘Material Financial Risks’”
The OCC and FDIC issued a final rule last week defining standards for when examiners can identify a practice as “unsafe or unsound” or issue a matter requiring attention. The rule establishes a materiality threshold for supervisory criticism and directs examiners to prioritize material financial risks and legal violations over issues related to policies, processes, and documentation.
“Stablecoins Lose Ground to Tokenized Deposits”
Tokenized deposits are gaining traction as a safer and more cost-effective payments alternative to stablecoins. By operating within the two-tier system of commercial banks and the Fed, they can modernize bank money while preserving banks’ traditional role of turning deposits into loans.
“Republicans Unveil Bill to Change CFPB Funding Structure”
Rep. Andy Barr, R-KY, introduced a bill co-sponsored by HFSC Chair French Hill, R-AR, that would establish clearer UDAAP standards and require the CFPB to receive funding from congressional appropriations rather than the Fed, among other measures.
“What Bankers Should Know About the Federal Reserve’s Proposed Reset for Bank Insider Lending Rules”
The Fed recently proposed significant updates to insider lending restrictions, or Regulation O, that would ease compliance obligations in some areas while creating new obligations in others. Read about the proposed changes and why they could make Reg O more manageable for small banks.
“FDIC Beats Investor Claim to $1.71 Billion Silicon Valley Bank Deposit”
The FDIC won’t be required to return a $1.71 billion SVB deposit to the creditors of its bankrupt parent, SVB Financial Group, after a judge found that imprudent risk-taking at SVB Financial caused at least $5.4 billion in losses, far exceeding the deposit claim.
In Other News
The WSJ explores how the bond selloff could affect affordability; far-right podcast host Steve Bannon is aligned with Rep. Alexandria Ocasio-Cortez, D-NY, and Sen. Bernie Sanders, I-RI, on this issue; and former Microsoft CEO Steve Ballmer was suspended from the NBA for a year for violating salary-cap rules, while the team he owns, the L.A. Clippers, were hit with one of the harshest penalties in league history.