Our special guest is Zarik Khan, Founder of Finsolute Advisors.  In October 2023, the Federal Reserve Board issued a proposal to lower the maximum interchange fee that a large debit card issuer can receive for a debit card transaction.  We first look at the roles of the various parties involved in a typical transaction in which a consumer uses a debit card to make a purchase from a merchant and the various fees imposed in connection with the transaction. … Continue Reading

On October 24, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation issued a final rule amending their regulations implementing the Community Reinvestment Act.  Although the final rule is effective April 1, 2024, the compliance date for the majority of the rule’s provisions is January 1, 2026. … Continue Reading

The Board of Governors of the Federal Reserve (FRB) is holding an open meeting on October 25, 2023 to discuss proposed revisions to the Board’s debit interchange fee cap contained in Regulation II, which implemented the Durbin Amendment.  For large issuers (with $10 billion or more in assets), Section 235.3(a) of Regulation II requires an issuer to charge interchange fees that are “reasonable and proportional to the cost incurred by the issuer with respect to the electronic debit transaction” and Section 235.3(b) of Regulation II caps such fees at 21 cents plus 0.05% of the transaction.… Continue Reading

Earlier this month, the Federal Reserve Board (FRB) released two supervision and regulation letters regarding the agency’s program to supervise “novel” banking activities.

The release of these letters follows a January policy statement indicating the FRB’s interest in leveling the playing field in terms of subjecting uninsured and insured banks to the same limitations on activities, including novel banking activities. … Continue Reading

The Federal Reserve, FDIC, and OCC have released final interagency guidance for their respective supervised banking organizations on managing risks associated with third-party relationships, including relationships with financial technology-focused entities such as bank/fintech sponsorship arrangements.  The guidance is intended to provide principles for effective third-party risk management for all  types of third-party relationships, regardless of how they may be structured.  … Continue Reading

On March 30, 2023, the White House endorsed several proposals to strengthen regulatory requirements for the banking industry in the wake of the Silicon Valley Bank and Signature Bank failures. This comes on the heels of President Biden’s March 13, 2023 remarks where he noted his intention to ask Congress and the banking regulators to “strengthen the rules for banks” to decrease the likelihood of similar failures in the future.… Continue Reading

The Federal Reserve Board, Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency have issued a joint statement on crypto-asset risks to banking organizations.  The term “crypto-asset” refers to any digital asset implemented using cryptographic techniques.

The statement begins with the agencies’ observations that “[t]he events of the past year have been marked by significant volatility and the exposure of vulnerabilities in the crypto-asset sector” and that “[t]hese events highlight a number of key risks associated with crypto-assets and crypto-asset sector participants that banking organizations should be aware of.”… Continue Reading

On October 3, 2022, the Federal Reserve finalized a rule expanding Regulation II (Debit Card Interchange Fees and Routing), the implementing regulation for the Durbin Amendment.  The final RULE is substantially similar to the proposed rule issued in 2021 and requires online (card not present) debit card transactions to be enabled for processing on at least two unaffiliated payment card networks. … Continue Reading

On September 7, 2022, newly-appointed Vice Chair for Supervision at the Federal Reserve (the “Fed”), Michael S. Barr, gave a speech outlining his near-term goals and the “holistic approach” he intends to take to achieve them.  Building on the efforts made over the previous 12 years since the Global Financial Crisis to strengthen the banking system and oversight, Barr emphasized his top goals include making the financial system safer and fairer. … Continue Reading

Earlier this week, the Federal Reserve Board of Governors narrowed the timetable for the launch of its instant payments platform—FedNow—to mid-year 2023, specifically targeting a production rollout of the service in a May to July 2023 timeframe.  The Fed had previously communicated a 2023 launch.  In September 2022, the FedNow Pilot Program will begin technical testing for the service.… Continue Reading