CFPB: Issue Spotlight Analyzes “Artificial Intelligence” Chatbots in Banking
Poorly deployed chatbots can impede customers from resolving problems The Consumer Financial Protection Bureau (CFPB) today released a new issue spotlight on the expansive adoption and use of chatbots by financial institutions. Chatbots are intended to simulate human-like responses using computer programming and help institutions reduce the costs of customer service agents. These chatbots sometimes…
CFPB: Billions of Dollars Stored on Popular Payment Apps May Lack Federal Deposit Insurance
Agency issues notice to consumers advising them to transfer balances to insured banks and credit unions The Consumer Financial Protection Bureau (CFPB) published an issue spotlight on digital payment apps heavily used by consumers and businesses. The analysis finds that funds stored on these apps may not be safe in the event of financial distress,…
FDIC: Proposed Rule Issued on Special Assessment Pursuant to Systemic Risk Determination
The Federal Deposit Insurance Corporation (FDIC) Board of Directors today approved a notice of proposed rulemaking, which would implement a special assessment to recover the cost associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank. The Federal Deposit Insurance Act (FDI Act) requires the FDIC to take this action in connection with…
FDIC: Supervisory Guidance Issued on Charging Overdraft Fees for Authorize Positive, Settle Negative Transactions
The FDIC is issuing supervisory guidance to its supervised institutions to ensure that supervised institutions are aware of the consumer compliance risks associated with assessing overdraft fees on a transaction that was authorized against a positive balance but settled against a negative balance (APSN). Statement of Applicability: The contents of, and material referenced in, this FIL…
OCC: Guidance Issued on Overdraft Protection Programs
The Office of the Comptroller of the Currency (OCC) today issued guidance to address the risks associated with bank overdraft protection programs. The guidance provides background information on overdraft protection programs and identifies certain practices that may result in heightened risk exposure. These practices include assessing overdraft fees on “authorize positive, settle negative” transactions and…
Federal Reserve: Initial Findings from 2022 Triennial Payments Study Issued
The Federal Reserve on Friday issued initial findings from its 2022 triennial payments study. The information shows how consumers and businesses chose to make noncash payments, using checks, different types of cards, and the automated clearinghouse (ACH). Additional details will be available as analysis is completed. The data show that the average values of consumers’…
OCC: Acting Comptroller Discusses Open Banking
Acting Comptroller of the Currency Michael J. Hsu today discussed the Office of the Comptroller of the Currency’s (OCC) approach to open banking in remarks at FDX Global Summit Spring 2023 in Raleigh, N.C. In his remarks, the Acting Comptroller highlighted the evolution of open banking and its potential impact on the OCC’s supervision in…
OCC: Office of Financial Technology Established
The Office of the Comptroller of the Currency (OCC) today announced the establishment of its Office of Financial Technology and the selection of Prashant Bhardwaj to lead the office as Deputy Comptroller and Chief Financial Technology Officer, effective April 10, 2023. In October 2022, the OCC announced that it would expand upon its Office of Innovation and…
Federal Reserve: New FedNow Service Launch Scheduled for July 2023
The Service will Debut with Financial Institutions and the U.S. Treasury on Board The Federal Reserve announced that the FedNow Service will start operating in July and provided details on preparations for launch. The first week of April, the Federal Reserve will begin the formal certification of participants for launch of the service. Early adopters…
FDIC: New FIL Clairifies Financial Institutions are Required to Meet Contractual Obligations with Bridge Banks
In recent days, the FDIC has established two bridge banks, Silicon Valley Bridge Bank, N.A. and Signature Bridge Bank, N.A., to assume the deposits and obligations of two failing banks. All contracts entered into with banks before they failed, and their counterparties were transferred into the bridge bank by the FDIC as receiver. Accordingly, vendors…