STATE GOVERNMENT RELATIONS
House Bill 1599 – Tourism Improvement Districts
Author: Rep. Beau Baird, R-Greencastle
Latest action: The bill passed the House Local Government Committee and has been referred to the House Ways and Means Committee.
Senate Bill 339 – Attainable Homeownership Tax Credit
Author: Sen. Linda Rogers, R-Granger
Latest action: The bill was heard in the Senate Tax and Fiscal Committee this week but did not receive a vote.
House Bill 1021 – Escrow Transactions
Author: Rep. Jerry Torr, R-Carmel
Latest action: The bill passed the House Insurance Committee this week.
House Bill 1504 – Enforcement of Deceptive Consumer Sales Act
Author: Rep. Mike Speedy, R-Indianapolis
Latest action: The bill passed the Judiciary Committee and was referred to the Ways and Means Committee.
House Bill 1157 – Residential Housing Development Program
Author: Rep. Justin Moed, D-Indianapolis
Latest action: The bill passed the Local Government Committee and was referred to the Ways and Means Committee.
FEDERAL GOVERNMENT RELATIONS
Biden Repeats Misleading Message about Bank Fees in Speech
In his State of the Union address Tuesday night, President Biden highlighted his administration’s proposals to place price controls on consumer fees, including fees charged by banks for late payments. “My administration is also taking on ‘junk’ fees, those hidden surcharges too many businesses use to make you pay more,” he said.
“We’ve reduced exorbitant bank overdraft fees, saving consumers more than $1 billion a year,” he added. “We’re cutting credit card late fees by 75%, from $30 to $8.” The latter action came in a proposal last week from the Consumer Financial Protection Bureau to eliminate a longstanding safe harbor that banks of all sizes rely upon when setting late fees on credit card payments. Biden repeated a misleading message about overdraft and late payment fees being hidden.
Treasury: ‘Significant’ Challenges Remain to Banks’ Optimal Use of Cloud Services
The Treasury Department Wednesday released a report on the benefits and challenges associated with the financial sector’s use of cloud services. The report was developed with input from U.S. regulators, the private sector, trade associations and think tanks. In conjunction with the report’s release, Treasury said it plans to convene an interagency cloud services steering committee within the next year to develop closer cooperation among U.S. regulators and develop best practices for cloud adoption frameworks and contracts.
According to the report, though cloud services can increase access and reliability, and empower community banks to compete with fintech firms, banks’ increased reliance on cloud-based technologies needs more visibility, staff support and cybersecurity incident response engagement from cloud service providers. The report recommends further evaluation from Treasury and the broader financial regulatory community to continue to evaluate the risks associated with a limited number of cloud services providers.
Treasury found that cloud services can help financial institutions become more resilient and secure, but the report outlined “significant challenges” that could detract from such benefits. According to the report, there is insufficient transparency to support due diligence and monitoring by financial institutions, and community banks expressed concern that they do not often receive details of incidents or outages affecting their systems. In addition, according to Treasury, the current talent pool is “well below” what’s needed to help financial firms tailor cloud services to better serve their customers and protect their information.
The report claims that the current market is concentrated around a small number of cloud service providers, which means that if an incident occurs at one CSP, it could affect many financial sector clients concurrently. The limited number of service providers also may give them outsized bargaining power when contracting with banks. While the report’s focus was mostly domestic, it did note that a “patchwork” of global regulatory and supervisory approaches to cloud technology can make it difficult for U.S. financial firms to adopt cloud tech consistently at a global scale, raising costs for adoption strategies, which ultimately hurts consumers.
OFCCP Extends Deadline to Object to Release of Diversity Data
The Office of Federal Contract Compliance Programs has extended to Feb. 17 the deadline for federal contractors to object to the release of a contractor’s diversity data found in the company’s EEO-1 Type 2 Reports. The OFCCP last week posted a list of contractors – including banks – whose EEO-1 Type 2 data the agency intends to release. The agency encouraged companies to consult the posted list and, if the company’s name is listed in error, to contact it.
Will Evans, a reporter with the left-leaning Center for Investigative Reporting’s “Reveal” program, filed a Freedom of Information Act request to obtain the EEO-1 employee diversity data belonging to federal contractors. The OFCCP asserts in an FAQ on its website that banks are federal contractors by virtue of their accepting deposit insurance, but that conclusion is disputed by many.
Submit an objection to the OFCCP
House Republicans Form Working Group to Counter ESG Proposals
Republicans on the House Financial Services Committee have formed a working group to counter what they say is the threat to capital markets posed by environmental, social and governance proposals. According to a committee statement, the working group will seek to rein in the Security and Exchange Commission’s “regulatory overreach,” reinforce the materiality standard as a pillar of the disclosure regime and hold to account market participants who misuse the proxy process to impose their ideological preferences.
“This group will develop a comprehensive approach to ESG that protects the financial interests of everyday investors and ensures our capital markets remain the envy of the world,” Committee Chairman Patrick McHenry,R-N.C., said.
The working group will be led by Rep. Bill Huizenga, R-Mich., who also chairs the Oversight and Investigations Subcommittee. The other members are Reps. Ann Wagner, R-Mo., Barry Loudermilk, R-Ga., Bryan Steil, R-Wis., Andrew Garbarino, R-N.Y., Byron Donalds, R-Fla., Monica De La Cruz, R-Texas, Erin Houchin, R-Ind., and Andy Ogles, R-Tenn.
Powell Sees ‘Significant Road Ahead’ on Fighting Inflation
Federal Reserve Chairman Jerome Powell Tuesday reiterated his belief that further increases in the federal funds rate will be necessary to bring inflation down to the agency’s 2% target. The Federal Open Market Committee raised the rate by 25 basis points at its most recent meeting earlier this month – a slowdown following a string of steeper rate hikes last year. However, shortly after the meeting, a federal report showed the U.S. economy unexpectedly grew by 517,000 non-farm jobs in January.
A strong labor market is likely to maintain upward pressure on inflation. During an interview at the Economic Club of Washington, D.C., Powell said that the jobs report underscored his view that there is a “significant road ahead” before inflation returns to the Fed target, which he doesn’t see happening until at least 2024.
“There’s been an expectation that it will go away quickly and painlessly, and I don’t think that’s at all guaranteed,” he said. “The base case for me is it will take some time and we’ll have to do more rate increases, and we’ll have to look around and see if we did enough.”
Watch a recording of the interview
CFPB Warns Mortgage Comparison Platforms Against Biasing Results
The Consumer Financial Protection Bureau Tuesday issued guidance warning mortgage comparison-shopping digital platforms that they are violating federal law if they direct shoppers to lenders or other real estate settlement service providers who pay referral fees to the platform. The Real Estate Settlement Procedures Act prevents companies and individuals from steering shoppers to providers by using “pay-to-play tactics” rather than providing comprehensive and objective information, the agency indicated.
Illegal activities include presenting one or more lenders in a non-neutral way or biasing a platform’s internal formula to favor preferred providers, according to the CFPB. Also, if a platform operator receives a higher fee for including a provider compared to what it receives for including other providers, that can be evidence of an illegal referral fee arrangement absent other facts indicating that the payment is not for enhanced placement or another form of steering. Under the agency's official procedures, the advisory opinion will constitute an interpretive rule under the Administrative Procedure Act and becomes fully effective when published in the Federal Register.