FEDERAL GOVERNMENT RELATIONS
Banks advised to bolster precautions as APP fraud climbs
Instances of authorized push payment fraud in the U.S. are rising, with losses expected to reach $6.8 billion globally by 2027, according to a report from ACI Worldwide. Banks face the possibility that U.S. regulators may make them liable for reimbursements, and experts say financial institutions need to increase anti-fraud precautions through measures such as upgrading detection systems and raising customer awareness of the problem.
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Fed vice chair pushes for discount window evolution
Federal Reserve Vice Chair Philip Jefferson has emphasized the need for ongoing evolution of the discount window, a key Fed tool. Highlighting its transformation from a monetary policy instrument to a critical emergency lending facility, Jefferson acknowledged its effectiveness. Still, he underscored the need for continued adaptation to current economic and banking conditions. "Today the discount window continues to be an effective tool, but it is important to acknowledge that economic and banking conditions continue to evolve," Jefferson said.
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CFPB warns of action over improper vehicle repossessions
A Consumer Financial Protection Bureau report on practices in auto finance cites instances of vehicle repossessions occurring after borrowers have made payments or received loan extensions, as well as cases where subprime lenders have charged for extended warranties and other add-on products that a consumer did not buy. "The CFPB will take action against auto finance companies that charge fees for nonexistent services or repossess cars after borrowers make payments," CFPB Director Rohit Chopra says.
US poised for soft landing, says Fed's Williams
New York Federal Reserve president John Williams said the U.S. is "well positioned" to achieve a soft landing, indicating he supported a slower pace of rate cuts going forward. "The current stance of monetary policy is really well positioned to both hopefully keep maintaining the strength that we have in the economy and the labor market, but also continuing to see that inflation comes back to 2%," Williams said. The half-point rate cut in September made sense, but if inflation stalls, "that would call for interest rates to come down more slowly," he added.
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Banks urged to prepare for CFPB's open banking rule
The Consumer Financial Protection Bureau's open banking rule is expected to be finalized in the coming weeks, but many bankers say they are uncertain how to ensure they are prepared for the final rule. One challenge is a provision to require institutions to make adequate responses to 99.5% of data requests in a 3.5-second time frame, and Kim Ford of Fiserv says that "banks need to be thinking about all the places that their data is held." In addition, John Pitts of data aggregator Plaid says, "If you have a 'data-out' plan but no 'data-in' plan, you have completely failed to understand why this rule matters."
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CFPB, Fed hike threshold for TILA safeguards to $71.9K
Consumer credit and leasing transactions of $71,900 or less will be subject to Truth in Lending Act requirements in 2025 under changes made by the Consumer Financial Protection Bureau and the Federal Reserve. The increase from the current $69,500 threshold marks a smaller percentage increase from last year as inflation has abated. Meanwhile, the Office of the Comptroller of the Currency will increase the appraisal-exemption level for mortgages to $33,500 from $32,400.