STATE GOVERNMENT RELATIONS
Holcomb Extends Health Emergency, Special Session Canceled
On the eve of the Thanksgiving holiday, Indiana's Republican legislative leaders pulled the plug on a General Assembly session planned for Monday that was billed as an "end to the pandemic," with legislation that would have ended the state public health emergency and limited employer vaccine mandates. Instead, lawmakers will address this topic when they return for session in January.
In light of the delayed legislation, Gov. Holcomb announced Wednesday that he will extend the state public health emergency another 30 days.
House GOP Reveals Top Priority for 2022 Session
Indiana House Republicans have revealed their top priority for the 2022 legislative session – stopping vaccine mandates. The House GOP caucus's 56 members signed on to a reintroduced bill that would effectively ban private companies from enforcing COVID-19 vaccine mandates.
FEDERAL GOVERNMENT RELATIONS
Action Alert: Urge Lawmakers to Oppose New IRS Reporting Rules
The Biden Administration is proposing a sweeping expansion of tax information reporting aimed at raising revenue to help offset the cost of additional spending programs in the American Families Plan. While the initial draft of the Biden administration’s $3.5 trillion spending plan currently does not include the IRS reporting proposal, the language could be added over the coming weeks as the current package is debated. We must continue our grassroots efforts to ensure that this provision stays out of future drafts of the bill.
Contact your lawmakers today to express your opposition to any new IRS reporting that leads to increased compliance costs, damages your customer relationships and threatens customer privacy. In addition to the current action alert seeking bank employee participation, we have created an action alert with messaging specifically designed for bank customer engagement. Please consider sharing this unique action alert link so they may urge Congress protect their financial privacy!
Reports: Five Democratic Senators Oppose Confirming Omarova to OCC
According to media reports last week, five Democratic senators have told the White House they oppose the nomination of law professor Saule Omarova to serve as comptroller of the currency. With united Republican opposition to her nomination, confirmation requires support from every Democratic member of the evenly divided Senate.
Axios reported on Wednesday that Senate Banking Committee members Jon Tester (D-Mont.), Mark Warner (D-Va.), and Kyrsten Sinema (D-Ariz.) have informed the White House and Senate Banking Committee Chairman Sherrod Brown (D-Ohio) of their positions. Additional senators opposing Omarova's confirmation, according to Axios, are John Hickenlooper (D-Colo.) and Mark Kelly (D-Ariz.).
CFPB Publishes Research on Overdraft, Fee Revenues
Three types of aggregate fee revenues – maintenance fees, ATM fees, and overdraft fees – all declined in 2020, with overdraft fees seeing the greatest decline at 26.2%, according to data released by the Consumer Financial Protection Bureau on Wednesday. In the years between 2015 and 2019, overdraft fees were increasing modestly year-over-year – about 1.7% annually, the bureau found.
The report also looked at "overdraft/NSF reliance," which the bureau defined as "the share of overdraft/non-sufficient funds fees among the three fees listed in the Call Reports." Overdraft reliance remained consistent between 2015 and 2018, hovering between 65% and 66%, before edging up to 66.5% in 2019 and subsequently falling to 62.4% in 2020.
Notably, the depressed reliance in overdraft fees has persisted throughout the pandemic and into 2021, which the CFPB indicated "reflects the relatively larger continued shortfall of overdraft and NSF fees in relation to their pre-pandemic volumes, compared to the shortfall in maintenance and ATM fees."
In the report – which examined call report information from 2015 to 2021 at banks with assets of more than $1 billion – researchers acknowledged that "it is not possible to determine how much of the drop in overdraft/NSF fee reliance during the pandemic was due to changing institution policies and practices and how much was due to changing consumer use patterns."
The CFPB also published a separate report providing a snapshot of overdraft fees at smaller banks and credit unions, based on information supplied by core processors from 2014. The CFPB noted that this data "may not always reflect current practices and outcomes," but represents "the most detailed and wide-ranging quantitative data the bureau or others have collected on overdraft practices at small institutions."
Read more and access the research
Trade Groups Urge Senate to Include Cannabis Banking Bill in NDAA
A broad coalition of industry trade groups have signed on to a letter urging Senate leadership to include the SAFE Banking Act in the upcoming National Defense Authorization Act. The provision already was included in the House version of NDAA, which was passed in September.
The SAFE Banking Act would provide clarity to financial institutions looking to serve legitimate cannabis businesses, in addition to creating a safe harbor for depository institutions serving cannabis-related businesses in states where such activity is legal. Currently, more than 35 states have legalized cannabis for medical or adult use. Still, current federal law prevents banks from safely banking cannabis businesses, including ancillary businesses that provide them with goods and services.
"A safe harbor would not only enable law enforcement and states to effectively monitor and regulate cannabis transactions and businesses, but it would bring billions of dollars of tax revenue out of duffel bags and safes and into the regulated banking sector," the groups wrote, acknowledging that passage would be a "critical first step" in a multistep process to ensure that legal cannabis marketplaces are safe, legal and transparent.
Yellen Still Backs IRS Reporting Proposal
In her appearance before a Senate committee, Treasury Secretary Janet Yellen reiterated her support of a proposal to implement reporting requirements on banks to bolster IRS tax enforcement. The reporting proposal was left out of the tax and social spending bill that recently passed the House, but Yellen cited the need to achieve "visibility into opaque income streams."
House Committee to Hear from Execs at Cryptoasset Firms
The House Financial Services Committee plans to hear testimony from the executives of eight big cryptocurrency firms on Dec. 8 concerning "the challenges and benefits of financial innovation" and how to regulate the cryptoasset market. The lawmakers are expected to hear from representatives of Coinbase Global, Circle, FTX Trading, Paxos, Stellar Development Foundation, and Bitfury, among others.
Fed Issues FAQs on Libor Transition
With certain tenors of Libor set to sunset on Dec. 31, the Federal Reserve published answers to frequently asked questions about the Libor transition in November. Among other topics, the FAQs address how examiners will assess firms' Libor transition planning.