The Federal Reserve Board approved final amendments to the liability provisions of Regulation CC, which governs availability of funds and collection of checks. These amendments continue the Board's efforts to update Regulation CC to reflect the evolution of the nation's check collection system from one that is largely paper-based to one that is virtually all electronic.

 

In today's check collection environment, original paper checks may be unavailable for inspection in certain disputes between banks. When the original check is not available, the final amendments update Regulation CC to include a presumption that a substitute or electronic check was altered in certain cases of doubt. The presumption applies only to disputes between banks and only when one bank has transferred an electronic or substitute check to the other bank. As with existing rules under Regulation CC, the parties may, by mutual agreement, vary the effect of the amendments' provisions.

 

In addition, the final amendments clarify that the presumption does not apply if it is contrary to another federal statute or regulation, such as the U.S. Department of the Treasury's rules regarding U.S. Treasury checks.

NACHA has approved three new rules that will expand the capabilities of same- day ACH for banks and bank customers, including expanded hours and a higher per-transaction dollar limit.

 

The first rule - which takes effect Sept. 18, 2020 - will expand same-day ACH by two hours every business day through the creation of a new same-day ACH processing window by the two ACH network operators. The second rule will increase the same-day ACH per-transaction limit to $100,000 and takes effect March 20, 2020.

 

Finally, the third rule NACHA approved will enable same-day ACH funds to be available faster; funds from same-day ACH credits processed in the existing first window will be made available by 1:30 p.m. local time. Funds from certain other ACH credits will be available by 9 a.m. local time by the receiving bank. This rule takes effect Sept. 20, 2019.

 

New Rules  >> 

In separate letters to Congress, CSBS stated its opposition to House bills now being considered that would preempt state regulations regarding data breach notifications and impose a new fee on state-chartered banks.

The bills at issue: H.R. 6743, the "Consumer Information Notification Requirement Act," and H.R. 6741, the "Federal Reserve Reform Act of 2018." Both bills are being considered by the House Financial Services Committee. 

 

Under H.R. 6741, state-chartered banks would be required to pay a new fee for supervisory examinations conducted by the Federal Reserve. This provision amounts to a "tax on state-chartered banks...that will hit the smallest community banks the hardest," said John W. Ryan, CSBS president and CEO in his letter. He added that these banks would "would pay more for the same level of supervision." 

 

Under H.R. 6743, expanded federal authority would prevent state regulators from enforcing state data breach notification laws. The bill would abandon the regulatory balance, struck decades ago via the Gramm-Leach-Bliley law, that according to Ryan, "establishes a floor for data breach and data security laws and expressly reserves the right of states to enact more stringent data breach and privacy laws for the protection of their citizens." 

 

The House Ways and Means Committee approved three bills referred to collectively as "tax reform 2.0." These bills are a follow-up to the tax reform law that Congress passed and President Trump signed into law in late 2017.

 

The first bill, H.R. 6760, makes tax policies contained in the tax reform law permanent. (The provisions in the law that pertain to individuals are currently set to expire after 2025, including the 20 percent deduction for pass-through businesses such as banks organized as S-corporations.) The second bill, H.R. 6757, makes several changes to retirement and educational savings accounts to ease their use and also creates new Universal Savings Accounts. Taxpayers could contribute up to $2,500 each year to their USA. Earning and distributions would be tax-free. The third bill, H.R. 6756, would allow new businesses to more quickly deduct their start-up costs.

Debit card use and market penetration continued to grow in 2017, while fraud losses declined, according to Pulse's debit issuer survey released today. The rate of checking accounts with associated debit cards ticked up one point to 76 percent, while the share of debit cards used at least once per month rose one point to 66 percent. Active debit card users on average made 23.7 purchases per month, up from 22.9 in 2016.

 

More than nine in 10 debit cards are now chip-enabled, the survey found, although just 40 percent of transactions actually involve the chip. While that figure is up 10 percentage points from the year before, Pulse attributed the lag in chip-to-chip debit transactions to low chip terminal adoption at small retail outlets and gas stations as well as the volume of card-not-present transactions. However, Pulse said that the growth in chip-to-chip transactions contributed to a 5.5 percent year-over-year drop in estimated debit fraud losses.

 

Eighty-six percent of debit issuers participate in at least one mobile wallet, the survey showed. Cardholder enrollment in Apple Pay, Samsung Pay and Google Pay approximately doubled year-over-year, but monthly debit transaction volumes remained roughly flat, Pulse found. Mobile wallet debit payments accounted for just 0.6 percent of point-of-sale transactions.

 

"The debit landscape continues to change dramatically," said Steve Sievert, EVP at Pulse, which is a Discover company. "We've moved from the simple world of 'PIN or signature' to an array of options, including PIN-less and signature-less transactions at the point of sale and biometric authentication in digital commerce and mobile wallets."