Wall Street Journal Reports on Zelle's Approach to Fraud Prevention

The Wall Street Journal reports that the seven large banks that own Zelle are contemplating approaches to deal with fraudulent transaction conducted over the Zell network. Rules being considered include establishing network-wide guarantees to reimburse scam victims and create liability sharing agreements. The liability of fraudulent P2P transfers has been a hot topic with the CFPB and legislators recently. The CFPB is expected to release guidance regarding fraudulent transfers. 

CFPB Releases Brief on Reg Z and Offsets

Amicus Brief – The CFPB filed an amicus brief in a case where a borrower held a bank’s credit card that could access a home-equity line of credit. When the consumer fell behind on his HELOC payments, the bank withdrew several thousand dollars from his deposit accounts at the bank to cover that debt. The CFPB’s brief argues that the text, history, and structure of Regulation Z prohibits offsets, which forbids lenders from unilaterally withdrawing money from consumers’ deposit accounts to cover debts incurred through credit card plans. 

FFIEC Updates CRA Data Entry Software

CRA Data Entry Software – The FFIEC announced that Version 2022 for the calendar year 2022 Community Reinvestment Act data due March 1, 2023, is now available. 

OCC Issues Civil Money Penalty

Civil Money Penalties – The OCC released a revised Policies and Procedures Manual for assessing civil money penalties (CMP), which the agency will begin using on January 1, 2023. This updates the civil money penalty (CMP) matrix applicable to its regulated institutions to allow for sufficient differentiation among varying levels of misconduct or by institution size and updated the mitigating factors to provide a stronger incentive for banks to fully address underlying deficiencies.  

From the FDIC

Updated Exam Manual – The FDIC updated sections of it s Consumer Compliance Examination Manual including SOURCE Violation Codes (II-14.1) to reflect changes to the FDIC’s Part 328 (Advertisement of Membership) and add an abusive violation code under Section 1036 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, among other updates.