STATE GOVERNMENT RELATIONS
Holcomb Calls Special Session
Gov. Eric Holcomb on Wednesday signed a proclamation calling a special session for the General Assembly to convene on July 6, 2022, to take action on his plan to return more than $1 billion of state reserves to Hoosier taxpayers. Taxpayers are expected to receive approximately $225 each, which would be in addition to the $125 distributed in the spring under the state’s automatic taxpayer refund law.
Indiana Grain Buyers and Warehouse Licensing and Bonding Law Updates
In 2021, Gov. Eric Holcomb signed into law House Enrolled Act 1483. The new law amended certain grain marketing practices that could affect the way producers market their grain when using deferred pricing agreements after July 1, 2022. To help increase awareness the Indiana State Department of Agriculture has put together public resources to help communicate these law changes.
Register for 2022 IBA Regional Meetings
The IBA is once again hosting a series of regional meetings around the state to facilitate grassroots communication between the bankers we serve and the legislators who serve our state. The meetings will include an hour-long update on the IBA, including legislative information and advocacy opportunities. Following the update, local legislators from the Indiana General Assembly will meet for lunch with bankers from the community. Five regional meetings remain, each beginning at 11:00 a.m. local time. Below are the dates, locations and registration links of each regional meeting.
Merrillville – July 19
Cooper’s Hawk
2120 Southlake Mall
Merrillville, IN 46410
West Lafayette – July 20
Walt’s Pub & Grill
1050 Kalberer Road
West Lafayette, IN 47906
New Albany – August 4
The Exchange Pub
118 W Main Street
New Albany, IN 47150
Richmond – August 29
Olde Richmond Inn
138 South 5th Street
Richmond, IN 47374
Bloomington – August 30
Graduate Hotel
210 East Kirkwood Avenue
Bloomington, IN 47408
FEDERAL GOVERNMENT RELATIONS
CFPB Targets Credit Card Fees
Consumer Financial Protection Bureau Director Rohit Chopra on Wednesday announced an advance notice of proposed rulemaking focusing on credit card late fees. The ANPR reopens a rule that the Federal Reserve Board enacted in 2010 that provides banks with a safe harbor on the amount they can charge when a cardholder pays late and provides annual adjustments based on inflation. In remarks suggesting that he views current fees as "excessive," Chopra indicated that CFPB would scrutinize how banks that rely on that safe harbor set their fees and how banks are immunized from enforcement when following the government's rule. This review could potentially lead to a revision in Regulation Z, which implements the CARD Act and Truth in Lending Act.
Under the CARD Act, credit card late fees must be "reasonable and proportional" to the costs incurred by the issuer due to a late payment unless the bank instead relied on a safe harbor limit set by regulators. In 2010, the Federal Reserve approved implementing regulations for the CARD Act that set fees at $30 for a late payment and $41 for each subsequent late payment within the successive six billing cycles, subject to an annual inflation adjustment. In the years since CFPB has adjusted the safe harbor amount based on annual changes in the weighted Consumer Price Index.
The ANPR focuses in particular on the 2010 rule, and the CFPB signaled that it intends to "determine whether adjustments are needed to address late fees." Comments on the proposal are due July 22.
Fed Closely Tracking Crypto, Powell Tells Senate Banking Committee
During a Senate Banking Committee hearing on Wednesday, Federal Reserve Chair Jerome Powell said his agency is tracking the "volatility" of the cryptocurrency market. He said that while the Fed is not directly involved in regulating cryptocurrency, its bank supervisory and regulatory role has input on what banks do with crypto assets on their balance sheets. "We're tracking those events carefully," Powell responded to Sen. Kyrsten Sinema (D-Ariz.) regarding the crypto market's recent crash, adding that the central bank really isn't seeing "significant macroeconomic implications" thus far.
Powell called crypto an "innovative new space," but said it needs a better regulatory framework. He said Congress needs to establish which agencies have authority over crypto and stablecoins. "The same activity should have the same regulation no matter where it appears, and that isn't the case right now because a lot of the digital finance products, in some ways, are quite similar to products that have existed in the banking system or the capital markets, but they're just not regulated the same way," he said. "So, we need to do that."
Powell Doesn't See Recession in Near Term
Federal Reserve Chairman Jerome Powell also addressed the economy in his testimony during a Senate Banking Committee hearing on Wednesday. Responding to lawmaker questions that primarily focused on inflation and the rising price of gas and food, Powell didn't veer far from the central bank's mandate of promoting maximum employment and keeping high inflation in check.
Last week, the Fed made its largest interest rate hike in 28 years in an attempt to curtail inflation. When asked if rapid rate hikes could trigger a recession, Powell said "it's certainly a possibility," but that it's not the agency's "intended outcome." He added that he does not foresee a recession in the near term, emphasizing that the economy remains strong and businesses are "in good shape."
Powell also noted that the housing market is slowing following its recent pandemic surge. "You're actually seeing demand move down significantly," he said, meaning that housing prices and demand will begin to flatten out. "You're going to see a moderation in housing demand, you're going to see declining, slower increases, at least in housing prices."
Lawmakers Reportedly Pull Bill Targeting Overdraft Fees
A bill titled the Overdraft Protection Act, sponsored by Rep. Carolyn Maloney, D-N.Y., which would place restrictions on banks' overdraft protection policies, was pulled before a vote during Wednesday's House Financial Services Committee markup hearing.
Senate Confirms SEC Nominees
The Senate confirmed Mark Uyeda and Jaime Lizárraga to serve as commissioners at the Securities and Exchange Commission by a voice vote last Thursday. Lizárraga was confirmed to serve a full five-year term until June 2027, while Uyeda will fill the time remaining on Elad Roisman’s term until June 2023, following Roisman’s resignation in January. The confirmations bring the five-member panel back to full strength.