FEDERAL GOVERNMENT RELATIONS
Chopra Calls for More Information on Nonbank Risks
The Consumer Financial Protection Bureau is pursuing a proposed rule on recordkeeping of banks' deposits from nonbanks, and CFPB Director Rohit Chopra said consumers should receive clearer information about the possible impacts of bank-nonbank relationships. "Over the past decade, we have seen a significant incursion into consumer deposit taking and payments activities by companies that aren't banks or credit unions," Chopra said, adding, "Consumers should, at the very least, be told clearly and concisely that they could face delays or lose their money by banking with a nonbank."
Mortgage Refinancing Increases as Rates Fall
Mortgage refinancing applications climbed for a second week as Americans seize on the lowest borrowing costs in two years. The Mortgage Bankers Association's refinancing index climbed 20.3% in the week ending Sept. 20, the highest level since April 2022, as the contract rate on a 30-year fixed mortgage fell to 6.13%.
Congress Approves Stopgap Funding Legislation
The House has approved a stopgap bill to extend government funding for three months, and the Senate has subsequently passed the bill. The bill would maintain funding at the existing level until Dec. 20.
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Fed Governor Bowman Points to Risk from Large Rate Cut
Federal Reserve Governor Michelle Bowman, who dissented from the Fed's decision to lower interest rates by 50 basis points, said that the large reduction presents certain risks. The large cut "could be interpreted as a premature declaration of victory on our price-stability mandate," Bowman said.
DOJ Files Antitrust Lawsuit Against Visa
The Justice Department has filed a lawsuit alleging that Visa has an unlawful monopoly in the U.S. debit card market. The lawsuit says 60% of U.S. debit card transactions go through Visa's network and generate $7 billion per year in processing fees for the company. Visa says it will robustly defend itself against the lawsuit and that "there is an ever-expanding universe of companies offering new ways to pay for goods and services."
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Banks, Lawyers React to Fintech-Account Recordkeeping Rule
The Federal Deposit Insurance Corp. has proposed a rule requiring banks to keep extensive details of their fintech partners' custodial deposit accounts, including transaction records. Trade associations and lawyers are raising objections to the proposal, including its additional workload for banks and potential inconsistencies with existing rules. One lawyer says the move might be an overreaction to middleware provider Synapse Financial's bankruptcy.
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FDIC Board Reportedly Split on Basel III Endgame Revamp
The Federal Deposit Insurance Corp. board reportedly is at an impasse over a revised version of the Basel III endgame proposal, with Consumer Financial Protection Bureau Director Rohit Chopra and two Republican members expressing opposition, potentially delaying any resolution until after the election. The proposal aims to refine capital standards for banks, a critical part of global regulatory adjustments after the 2008 financial crisis. Despite support from some FDIC board members and adjustments suggested by Federal Reserve Vice Chair for Supervision Michael Barr, sources say the lack of consensus threatens the proposal's approval.