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AI OASIS®
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Agencies request comments on reducing regulatory burden
The FDIC, Federal Reserve Board, and the OCC yesterday announced their second notice requesting comment to reduce regulatory burden. The Economic Growth and Regulatory Paperwork Reduction Act of 1996 requires the Federal Financial Institutions Examination Council and federal bank regulatory agencies to review their regulations every 10 years to identify outdated or otherwise unnecessary regulatory requirements for their supervised institutions.
To facilitate this review, the agencies divided their regulations into 12 categories and are now soliciting comments on their regulations in three categories: Consumer Protection; Directors, Officers, and Employees; and Money Laundering. The public has 90 days from publication in the Federal Register to comment on the relevant regulations.
In a related news release, the agencies announced they will hold a virtual public outreach meeting on September 25, 2024, as part of their review of regulations. The outreach meeting is an opportunity for interested stakeholders to present their views on the six categories of regulations listed in the first two Federal Register notices: Applications and Reporting; Powers and Activities; International Operations; Consumer Protection; Directors, Officers and Employees; and Money Laundering.
Individuals interested in providing oral comments must register by August 9, 2024, and indicate the regulatory category they would like to discuss. The agencies will notify those individuals selected to provide comments within one month of registration closing. Advance registration is not required to attend this virtual public meeting as an observer.
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Exception Cost Calculator (Free Spreadsheet)
How Much Does Exception Tracking Cost Your Bank?
Download the free spreadsheet, enter the number of hours for each task, and see the results. Estimate your annual exception tracking cost.
— Alogent
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Joint statement on third-party arrangement risks
The FDIC, OCC, and Federal Reserve yesterday jointly issued a statement reminding banks of potential risks associated with third-party arrangements to deliver bank deposit products and services. The agencies support responsible innovation and banks engaging in these arrangements in a safe and sound manner and in compliance with applicable law. While these arrangements can provide benefits, supervisory experience has identified a range of safety and soundness, compliance, and consumer-related concerns with the management of these arrangements.
The statement details the potential risks and provides examples of effective risk management practices for these arrangements. In addition, the statement reminds banks of relevant existing legal requirements, guidance, and related resources, and provides insights that the agencies have gained through their supervision. The statement does not establish new supervisory expectations.
Separately, the agencies have requested additional information on a broad range of bank-fintech arrangements, including with respect to deposit, payments, and lending products and services. The agencies are considering whether additional steps could help ensure banks effectively manage risks associated with these various types of arrangements, and are seeking input on the nature and implications of bank-fintech arrangements and effective risk management practices. Responses and comments will be accepted for 60 days following publication of the request for information in the Federal Register.
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Business Process Automation
Streamline and eliminate a lot of manual processes between the business lines. Each stakeholder can see where an item is, and the auditors love the tracking since each of the steps in the workflow is date/time stamped, providing a comprehensive audit trail.
—Matthew Basque, Needham Bank
— Identifi Workflow
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Financial institution diversity self assessments due by Halloween
FDIC FIL-44-2024, issued yesterday, announced that submissions of voluntary diversity self-assessments for 2023 are now being accepted. Institutions have until October 31, 2024, to file them. The FDIC encouraged institutions it supervises to voluntarily conduct and submit self-assessments of their diversity policies and practices.
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CFPB junk fee spotlight on school lunch payment platforms
Yesterday, the CFPB's junk fee spotlight shone on school lunch payment platforms that help school districts process children's school lunch payments. With a captive customer base, these companies can have broad control over fees assessed for each transaction. These fees are widespread and often hit low-income families the hardest. Overall, parents and caregivers have no control over fee rates and lack opportunities to shop around for cheaper options.
The Bureau released a report highlighting average costs and potential risks for families using electronic payment platforms to add money to their children's school lunch accounts. More generally, the report also reviews the market size and landscape of school lunch payment processing companies, and it builds upon initial observations referenced in the Fall 2023 edition of the CFPB's Supervisory Highlights.
While more than 20 unique companies offer these services to school districts nationwide, the report indicates the vast majority of enrolled students are served by just three market leaders. These processors typically charge fees to add money to a student's school lunch account, which collectively can cost families upwards of $100 million each year. Among the companies it studied, the CFPB observed that the payment processors charge transaction fees of $2.37, or 4.4%, of the total transaction, on average, each time money is added into a payment account.
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Treasury announces OFAC actions
Yesterday, the Department of the Treasury issued two announcements concerning actions taken by its Office of Foreign Assets Control (OFAC).
OFAC sanctioned the Lopez Human Smuggling Organization, which “sought to smuggle thousands of migrants into the United States through an illegal transnational operation that exploited those in search of a better life for themselves and their families,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson.
OFAC also sanctioned the Congo River Alliance, known by its French name Alliance Fleuve Congo (AFC), a coalition of rebel groups that seeks to overthrow the government of the Democratic Republic of Congo (DRC) and is driving political instability, violent conflict, and civilian displacement.
For the names and identification information of the designated individuals and entities, see this July 25, 2025, BankersOnline OFAC Update.
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