On July 25, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency (collectively, the agencies) issued a “Joint Statement on Banks’ Arrangements with Third Parties to Deliver Bank Deposit Products and Services” to “note potential risks related to arrangements between banks and third parties to deliver bank deposit products and services to end users”.… Continue Reading
Federal Reserve Board
Federal District Court in Texas which recently validated CFPB’s small business data collection rule might entertain “new” funding challenge to CFPB
By Alan S. Kaplinsky on
On August 26, 2024, Chief Judge Randy Crane in the S.D. Texas granted summary judgment to the CFPB, denied summary judgment to the trade groups and upheld the validity of the CFPB’s small business data collection rule. However, the Judge still needs to rule on a motion to amend the complaint and a motion for judgment on the pleadings.… Continue Reading
Unlawful funding argument raised in challenge to final CFPB rule
By Alan S. Kaplinsky on
We have previously blogged about how targets of CFPB enforcement actions have asserted that the actions must be dismissed because the investigations were conducted and the lawsuits were brought and are being prosecuted with funds unlawfully obtained from the Federal Reserve Board at a time when the Federal Reserve System had no combined earnings.… Continue Reading
Banking Regulators Seek Comment on Third-Party Relationships with Financial Institutions
The federal banking regulators are seeking comment to better understand the relationship between financial institutions and third parties that work for them.
The OCC, Federal Reserve and FDIC “seek public comment to build on their understanding of these arrangements, including with respect to roles, risks, costs, and revenue allocation,” the agencies said.… Continue Reading
Regulators Outline Risks that Third-Party Servicers Pose to Banks
Banking regulators have issued a joint statement outlining the potential risks that financial institutions face in arrangements with third parties to deliver bank deposit products and services and examples of risk management practices to manage such potential risks.
The joint statement does not establish new expectations for financial institutions, the regulators said.… Continue Reading
Federal Banking Agencies Issue NPRM Consistent with FinCEN’s AML/CFT Modernization Proposal
By Kaley Schafer on
The federal banking agencies, including the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency (collectively the “Agencies”), issued a notice of proposed rulemaking (“Agencies’ NPRM”) to modernize financial institutions’ anti-money laundering and countering terrorist financing (“AML/CFT”) programs.… Continue Reading
Supreme Court opens the door for more APA challenges by ruling that the right of action accrues when the rule first causes injury
On July 1, 2024, the Supreme Court issued its opinion in Corner Post, Inc. v Board of Governors of the Federal Reserve System in which the Court determined when a Section 702 claim under the Administrative Procedure Act (APA) to challenge a final agency action first accrues. In a 6-3 Opinion, the Supreme Court sided with Corner Post in holding that a right of action first accrues when the plaintiff has the right to assert it in court—and in the case of the APA, that is when the plaintiff is injured by final agency action.… Continue Reading
Federal banking agencies issue guide to third-party risk management practices for community banks
On May 3, 2024, the Board of Governors of the Federal Reserve System (the “Federal Reserve”), the Federal Deposit Insurance Corporation (“FDIC”), and the Office of the Comptroller of the Currency (“OCC”) jointly released the “Third-Party Risk Management: A Guide for Community Banks” (the “Guide”), presenting it as a resource for community banks to bolster their third-party risk management programs, policies, and practices.… Continue Reading
Districts of Wyoming and Idaho affirm broad Fed powers over master accounts
By Kelly Lin on
Components of the U.S. Federal Reserve System recently prevailed in two lawsuits in which both plaintiffs – Custodia Bank and PayServices Bank – alleged the defendants were required to grant the plaintiffs’ master account requests and wrongfully denied them master accounts. Both the United States District Court for the District of Wyoming and the United States District Court for the District of Idaho rejected these claims and instead ruled as a matter of law that the respective regional Federal Reserve Banks had discretion to deny the plaintiffs’ requests for a master account. … Continue Reading
TX federal court enjoins enforcement of CRA final rules against plaintiffs
On February 5, 2024, several national and Texas banking and business trade groups (Plaintiffs) filed a lawsuit challenging the final regulations (Final Rules) implementing the Community Reinvestment Act of 1977 (CRA) that were jointly adopted in October 2023 by the Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, and Federal Reserve Board (Agencies).… Continue Reading