STATE GOVERNMENT RELATIONS
Holcomb Touts Record Quarter of $20.6 Billion in Committed Capital Investment
Gov. Holcomb announced the Indiana Economic Development Corp. has secured $20.68 billion in committed capital investment so far in 2024, marking the highest quarter on record for capital investment in the agency's nearly 20-year history.
Rural Communities Prepare as 600K Tourists Expected for Eclipse
Rural and small communities across southern Indiana have spent months or years planning for the eclipse, which is expected to bring the largest number of people ever to some parts of the region.
Read more from Inside INdiana Business
Read IBA member responses regarding solar eclipse plans
FEDERAL GOVERNMENT RELATIONS
Treasury Department Releases Report on AI Risks in Financial Services Sector
According to a Treasury Department report released Wednesday on the topic of countering cybersecurity risks posed by artificial intelligence, financial institutions should:
- Expand and strengthen their risk management and cybersecurity practices to account for AI systems' advanced and novel capabilities;
- Consider greater integration of AI solutions into their cybersecurity practices; and
- Enhance collaboration, particularly threat information sharing.
The 51-page report was published in response to a 2023 executive order by President Biden directing federal agencies to develop strategies for the safe deployment of AI technologies across the U.S. economy. The Treasury Department interviewed key players in the financial services and information technology sectors, among others, to learn what institutions are already doing in terms of AI, where there is room for improvement and best practices for managing AI threats. The report cautioned that financial institutions should ensure prudent risk management over AI activities, including robust oversight of third-party providers.
The report stressed the need for industry collaboration to counter AI-related risks. "The U.S. government, with its collection of historical fraud reports, may be able to assist with this effort to contribute to a data lake of fraud data that would be available to train AI, with appropriate and necessary safeguards," the report said.
Agencies Extend Applicability Date of Certain CRA Rule Provisions
Last week, the Federal Reserve, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency jointly issued an interim final rule extending the applicability date of certain provisions in the Community Reinvestment Act rule issued in October 2023. Specifically, the agencies extended the applicability date of the facility-based assessment areas and public file provisions from April 1, 2024, to Jan. 1, 2026. As a result, banks will not have to make changes to their assessment areas or their public files under the CRA rule until Jan. 1, 2026.
The agencies also issued what they said are technical, nonsubstantive amendments to the CRA final rule and related agency regulations that reference it. For example, one amendment clarifies that banks do not need to make changes to their public notices until Jan. 1, 2026.
Fed's Barr Says 'Broad' Changes Coming to Basel III Capital Proposal
Federal Reserve Vice Chairman for Supervision Michael Barr said last Friday that regulators expect "broad and material" changes are coming to the proposed Basel III endgame capital standards, Bloomberg News reported. Speaking at a University of Michigan event, Barr echoed Fed Chairman Jerome Powell's March 6 testimony before the House Financial Services Committee, in which he told lawmakers that significant changes will likely be made before the rule moves forward. Barr is the chief proponent of the proposal.
"I am working very closely with Chair Powell and other members of our Federal Reserve board to try to reach a broad consensus," Barr said. He specifically said criteria related to operational, market and credit risks could be adjusted.
The proposed standards have met resistance from lawmakers from both parties, industry associations and a host of interests both inside and outside the banking industry. A February analysis by the law firm Latham and Watkins found that 97% of public comments the Fed received on the proposal either opposed it or raised concerns. Opponents included manufacturers, the energy sector, agricultural interests, small businesses, medium and large corporations, real estate companies and mortgage stakeholders, market infrastructure providers, exchanges and insurers, and academics.
AI Tools Introduced by Visa Aim to Combat Payments Fraud
Visa says it is reinforcing its methods of detecting and preventing digital payments fraud with new AI-powered tools. It is also extending its Visa Advanced Authorization and Visa Risk Manager products for use in payments not conducted with a Visa card. The firm says it assisted in preventing $40 billion in fraudulent activity in 2023, about twice the amount in the prior year.
CFPB's Chopra: Credit Card Rewards to Face More Scrutiny
Speaking at CBA LIVE on Tuesday, Consumer Financial Protection Bureau Director Rohit Chopra said his agency intends to examine credit card rewards programs and the activities of buy now, pay later firms. The CFPB is also working to introduce a dataset that is intended to be a neutral source of information for third-party websites to assist consumers in evaluating credit card pricing, Chopra said.
Read more from American Banker
Visa, Mastercard Agree to Limit Merchant Swipe Fees
Visa and Mastercard have agreed to a settlement to limit the swipe fees they charge to merchants, lowering them by a minimum of 0.04 percentage points over three years. The settlement would result in an estimated $30 billion reduction in fees over five years, lawyers say. The settlement also would cap fees for five years, and it includes provisions that give merchants more leeway on which cards they accept.
Read more from the Wall Street Journal (subscription required)
Yellen Receptive to Bill That Would Clarify Cannabis Banking
Treasury Secretary Janet Yellen says legislation that would clarify how banks can serve state-legal cannabis businesses "may be necessary to raise the comfort level banks have with doing this business." Banks remain wary of engaging with the industry as cannabis remains illegal at the federal level, requiring the industry frequently to use cash to conduct business, which leads to financing and security concerns.