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Wednesday, September 11, 2024

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Banks led reporting of mail-related check fraud


The Financial Crimes Enforcement Network (FinCEN) said it received more than 15,000 reports from financial institutions on mail theft-related check fraud in the six months after it issued an alert on the issue last year.

 

FinCEN said:

  • It received 15,417 Bank Secrecy Act reports from 841 financial institutions on more than $688 million in reported suspicious activity in the six months after it issued its February 2023 alert.
  • Banks filed 13,618—or 88%—of the reports, while securities firms filed 885 and credit unions filed 882.
  • Small and midsized banks accounted for the majority of the reports from banks.

 

In its analysis of the BSA reports, FinCEN identified three primary outcomes after checks were stolen from the U.S. Mail:

  • 44% were altered and then deposited.
  • 26% were used as templates to create counterfeit checks.
  • 20% were fraudulently signed and deposited.


Criminals usually prefer simplistic methods that avoid contact with human tellers to commit check frauds including check deposits via remote deposit capture or at ATMs and opening accounts online rather than in person, according to a FinCEN report released Sept. 9, based on 15,417 reports of mail theft-related check fraud, from 841 financial institutions.


Source: FinCEN

AML/CFT modernization should not expand reg burden


ICBA told the Financial Crimes Enforcement Network (FinCEN) that its proposed rule to update anti-money-laundering and countering-the-financing-of-terrorism programs would create additional burdens on banks without benefitting FinCEN’s efforts to reduce financial crimes.  

  

In a comment letter, ICBA said the proposed rule would likely:  

  • Impede banks’ efforts of achieving an “effective, risk-based, and reasonably designed AML/CFT program.”
  • Increase regulatory burden and compliance spending by hindering risk-related resource allocation
  • Increase occurrences of subjective exams due to the lack of guidance.  
  • Invalidate the competency, training, and expertise of BSA officers who happen to have other positions in a bank. 
  • Keep in place the practice of robotic and mechanical compliance impeding 

 

ICBA added that banks would face increased enforcement risk that result from technical errors if the rule were adopted. 

 

The FinCEN proposed rule would require AML/CFT programs with certain minimum components to incorporate government-wide AML/CFT priorities.

Source: ICBA; FinCEN

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Groups urge Congress to advance farm bill this year


ICBA and other agricultural stakeholders called on Congress to advance a meaningful farm bill in 2024 that addresses worsening conditions in farm country.

 

In the letter to congressional leaders, the more than 300 groups said:

  • It is time to pass a new farm bill instead of extending the current bill given the potential for many farmers to not qualify for bank financing.
  • The new farm bill should strengthen the safety net with many producers facing multiple years of not being profitable.


The letter follows a USDA report showing lower net farm income in 2024. According to the USDA, inflation-adjusted net farm income is forecast to decrease by 6.8% from 2023 to 2024, slightly less than forecast in February but still revealing economic challenges faced by many ag producers.

 

ICBA supports passage of a new farm bill with enhancements to USDA farm programs, including higher loan limits on USDA guaranteed loans and a quicker approval process on USDA guaranteed farm loans. ICBA also continues to express strong opposition to several proposals to expand Farm Credit System authorities.

Source: ICBA

Credit union buying stadium naming rights


ICBA said that a credit union paying for NFL stadium naming rights is the latest example of how credit unions are violating the limits established by Congress to justify their federal tax exemption. 

 

The Washington Commanders announced that Northwest Federal Credit Union inked a deal to pay for the naming rights, which reportedly cost $8 million per year.  

 

In a national news release, ICBA President and CEO Rebeca Romero Rainey said modern credit unions exploit their tax exemption to subsidize multimillion-dollar executive pay, outsized marketing budgets, lavish headquarters, and an ongoing surge in acquisitions of taxpaying community banks. 

 

ICBA has repeatedly called on Congress to investigate the credit union tax and regulatory advantages, including in a recent American Banker op-ed from Romero Rainey. In a recent letter to House Ways and Means Committee members, it called on lawmakers to review credit union tax exemptions. 

 

ICBA polling released earlier this year showed Americans support reforms to policies that arbitrarily favor credit unions. According to the polling conducted by Morning Consult, 68% of adults said credit union customers should have the same Community Reinvestment Act protections that banks provide, while 54% said Congress should investigate whether the credit union tax exemption is still warranted. 

 

Community bankers can use ICBA’s Be Heard grassroots action center to call on members of Congress to hold a hearing on credit union policy. Additional resources are available on the ICBA website.

Source: ICBA

Push back on earned wage access


Industry groups and financial companies pushed back against the Consumer Financial Protection Bureau's proposed earned wage access rule in comment letters to the agency, arguing that earned wage products do not constitute as lending and hence lending laws should not apply on them, Banking Dive reported.

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Source: S&P Global Market Intelligence; Banking Dive

Expansion of Fedwire/NSS operating hours not necessary 


ICBA said the Federal Reserve’s proposed expansion of Fedwire Funds Service and National Settlement Service hours to 22 hours per day, seven days a week would place significant burdens on community banks for what is likely to be a low volume of transactions.  

  

Both Fedwire and NSS currently operate Monday through Friday, excluding holidays. Under the proposal, both services would operate every day of the year.  

  

In a comment letter to the Federal Reserve, ICBA said:   

  • It strongly opposes the proposed expansion of the Fedwire/NSS operating hours, which would amount to a 47% increase. 
  • There is minimal consumer demand for extended Fedwire and NSS availability, and the proposed expansion would place significant burdens on community banks.
  • Expanding Fedwire and NSS could enable ACH and check-clearing services to extend their hours. 

 

ICBA said that expanded Fedwire and NSS would slow the adoption of FedNow, which provides 24/7 real-time gross settlement payments 365 days a year.

Source: ICBA

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With the exception of official announcements, the Arkansas Community Bankers Association Board of Directors, Officers and staff disclaim any responsibility for opinions expressed and statements made in articles published in Arkansas Community Bankers NewsWatch 2024. Please note that by using some of the links in this publication, you will be leaving the Arkansas Community Bankers NewsWatch 2024. As a service and for informational purposes only, ACB may provide listings of and/or links to third party web pages/publications maintained by the U.S. Government, internet retailers, organizations and others. ACB does not monitor and is not responsible for the content or administration of these outside websites or pages.  No part of this publication may be reproduced without express written permission. © 1990 - 2024 by the Arkansas Community Bankers Association. All rights reserved.


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