Marina Gracias

New blog post: CECL implementation is creating new norms for banks and credit unions. Learn which model inputs your financial institution should be evaluating to ensure you're maintaining a proactive approach to CECL. Read today: https://lnkd.in/eSHWeF-t Thanks to Zach Englert for sharing! Empyrean Solutions

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More than two years after getting a core dump of data from the major Buy Now, Pay Later fintechs like Klarna and Affirm, the Consumer Financial Protection Bureau took the fast track to regulation by putting the programs under existing regulations. Even as the industry digs into the implications, there's a whiff of future litigation in the air. Not all fintech #BNPL programs operate identically. For example, the perspective of fintech player Splitit differs in part because it is designed to split purchases during the transaction, embedded in the checkout, Steve Cocheo writes for The Financial Brand. Click the link below to read up on an issue that affects millions of American consumers. https://lnkd.in/eMQuHJRu

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Our mid-year report, "Ten Key Regulatory Challenges of 2024," is now available. We are in a year of Regulatory Challenge marked by significant financial fines- including the largest single settlement ever a staggering $4.3B across DOJ, CFTC, FinCEN and OFAC for AML/sanctions compliance. KPMG Regulatory Insights offers a roadmap to navigate these challenges. https://bit.ly/4bXFLfc #RegulatoryInsights #RiskManagement

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We greatly respect the Consumer Financial Protection Bureau’s efforts to protect and support consumers, and we’re pleased that the Bureau is promoting consistent industry standards (many of which already reflect how Affirm operates). Now, all participants will have to follow these. Since our founding over a decade ago, Affirm’s mission has always been to build honest financial products that improve lives. Credit cards’ days are numbered as people no longer have to tolerate the ball and chain that comes with revolving credit card debt. A majority of U.S. households revolve on a credit card, carrying a balance from month to month and compounding interest into principal. With Affirm, there is no ability to “revolve” by design. We don’t ever charge late fees and we have zero business benefit to extending access to credit that is not repaid. We also provide consistent and transparent info at checkout (including TIL disclosures), and offer dispute and error resolution assistance. We still have a long way to go to achieve our mission but having increased clarity and a level playing field across the industry is good for consumers, good for merchants, and good for Affirm. The CFPB should absolutely hold the industry to account for living up to our promise of providing a more flexible and consumer-centric alternative vs. repackaging the same old gotchas from credit cards in shinier wrappers!

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If you're frustrated with your legacy card processor, you're not the only one. Our CEO, Bhavin Turakhia, has talked with hundreds of banks and credit unions over the last few years and hears consistent themes about the problems caused by old technology. In this video, Bhavin discusses: 🔹 Why everyone seems dissatisfied with their banking stack 🔹 The limitations of COBOL and other outdated technologies 🔹 The struggle to create modern, seamless customer experiences How are legacy systems impacting your organization? Let us know your thoughts in the comments below.

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Digital banking does not reign supreme for all services.

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Why payments need to be borne as 'public goods'? This Federal Reserve Board Governor Waller's speech put it simpler (in 2 complementary ways): 1. Identifying the need and timing for technical standards, incorporating a breadth of industry perspectives, and aligning on implementation approaches requires 'coordination', and central banks play a key role as neutral conveners to harmonise efforts from all relevant stakeholders. 2. Leading by example, central banks' operated payment platforms provide expertise in the adoption of standards and best practices. RTGS systems remain as the backbone of the financial system, they serve as rails for safe and efficient settlement in central bank money #RTGS #payments #ISO20022 #standards #innovation

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Consumer Financial Protection Bureau Director Rohit Chopra recently addressed the U.S. House Committee on Financial Services about protecting consumers' financial data. Chopra indicated that the CFPB would be proposing a new Fair Credit Reporting Act (FCRA) provision to enhance data sharing standards and privacy protections, particularly against misuse by data brokers. As Big Tech expands into financial services, Congress must strengthen data privacy laws. If anyone has mishandled your credit report or background report, let us know. https://lnkd.in/eRNNSdWv #CFPB #DataPrivacy #FCRA #FinancialProtection #OpenBanking #Congress #ConsumerRights

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New guidance from a trio of regulators designed to aid community banks in their management of third-party relationships is a welcome sign in the industry. Partner and U.S. Head of Community Banking, John Soffronoff tells Banking Dive the guidelines provide a good roadmap for community banks to evaluate their third-party relationships throughout their entire lifecycle. Click on the image below to learn more about what John has to say ⬇️ #Communitybanking #Risk #Financialservices

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Powerful statement by the regulator, Mr. Michael Hsu, head of the OCC, acknowledging what we heard from every small bank we spoke to in the US! Their core systems are a strong limiting factor. "In every single discussion I've had about banks, digital, and modernization, especially with community banks, all roads lead through the core. I've heard a lot of frustration from community banks because they feel like hostages in these relationships and have no negotiating leverage." That's one of the things FintechOS fixes, at least on the financial products management side, providing much broader flexibility in modernizing the core, without actually changing it, as acknowledged recently by Gartner. More interesting details and opinions in the article, signed by Miriam Cross with quotes from Brian Argrett Rob Nichols Alexandria Currie and Jo Ann Barefoot.

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CFPB issues interpretive rule that states generally, BNPL lenders are subject to Subpart B of Regulation Z (Disclosures/statements and billing disputes). Good news - it's only 16 pages 👏 Other news 👇 🔊 CFPB states although not required under the Administrative Procedures Act, they are opting to collect comments on this interpretive rule and MAY make revisions as appropriate after comment period closes on August 1, 2024. 🔊 Legal Analysis provided in the rule states that digital user accounts meet the definition of credit cards and lenders meet the definition of card issuers and creditors. 🔊 Not subject to subpart G which covers penalty fee limits and ATR requirements. 🔊 CFPB states that when congress created the definition of "credit card" they understood the need for flexibility to cover evolving types of credit devices, reflecting the rapid advancement of credit mechanisms at the time of enactment (insert sarcastic tone here 🤔 , this was 1969, what was rapidly evolving in terms of credit devices?!) I do think that this is great for the industry to start to bring a piece of legislation into the BNPL space; however, I question the legal analysis of Regulation Z in the issuance of this interpretive rule. It's been 6 days since the Supreme Court decision on the CFPB funding. Director Chopra has given 3 speeches, 1 lawsuit has been filed, 1 enforcement action against a student loan debt relief service, and this interpretive rule have been issued in that time frame. It seems the bureau's pace is picking up even more so than before that ruling. Link to the interpretive rule is below 👇 . https://lnkd.in/gJxfN2Vs

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The Consumer Financial Protection Bureau (CFPB) has turned its attention to the gaming industry, highlighting serious concerns about payment practices. Please read the latest analysis from Hudson Cook, LLP partners Justin Hosie, Julia Whitelock, and Jason Esteves and what it could mean for the future of gaming transactions. #cfpb #gaming #paymentpractices

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If your financial institution or credit union assigns scores by hand, runs calculations, or uses an algorithm, risk scoring is a crucial part of a well-oiled compliance system. ✅ Join former OCC regulator Ryan McInerny in our upcoming webinar on May 30th to discover how to align with your unique risk profile and ensure you're not missing suspicious activity. ✅ Register today! >> https://lnkd.in/dZ_7bHu2 #Riskscoring #RiskScout #Streamlinedcompliance #Financialinstitutions #Creditunions

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In October 2023, the CFPB proposed a rule that would "accelerate a shift towards open banking, where consumers would have control over data about their financial lives and would gain new protections against companies misusing their data." Auriemma found that many cardholders are hesitant about sharing personal data, but 80% agree their willingness to share their personal data is contingent on which brand is requesting access. This may be a win for Open Banking, which would put control directly into consumers hands. #openbanking #datasharing #cfpb #creditcard #debitcard #payments #research #us

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For CDFI credit unions that had concerns whether their 2023 loans might not meet the new certification standards, the extension from the Community Development Financial Institutions Fund (CDFI Fund) is great news! Now there’s time to make adjustments as needed. So where do you start? Learn more during our July 10 webinar for currently certified CDFI credit unions: https://loom.ly/qKXwPRc #creditunions #CDFIs

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Skiptism runs supreme. Regulators have drummed for simplification of banks. This is clarion call seems to be cast aside by bank CEOs. Cap1 expects regulators to come down on Cap1's assertion that the deal improves competition. Ignoring the current regulatory concerns of unsafe and unsound business practices, rooted in banks cutting corners to save costs and settlings for passing compliance grades. Taxpayer bailouts are not in the offing, especially for cutrate business practice choices. Executives will have to emerge into C-Suites skilled at growing their business without M&A options. Perhaps this means burning the ol' playbook of cutting costs when earnings plans are missed. Finding a new tactic, perhaps restructuring executive compensation could be a new dawning. #banks #mergersandacquisitions #regulatoryactions

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To the likely surprise of providers of buy now, pay later (BNPL) financing, the #CFPB recently issued an interpretative rule stating that BNPL products are actually "credit cards" under the Truth in Lending Act and BNPL providers are "card issuers" and therefore "creditors" under, and subject to, Regulation Z. Scott Pearson, Bryan Schneider and Eric Knight explain the significance here:

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