Consumer Financial Protection Agency
On October 20, 2009, the House Financial Services Committee voted to give the federal government the power to block states from regulating large national banks in some circumstances. The compromise offered by Rep. Melvin Watt (D-NC) and Dennis Moore (D-KS) and approved by voice vote, grants the office of the comptroller of the currency the power to override state action only if it found that the state law in question “significantly” interferes with federal regulatory policies.
On October 22, 2009, the House Financial Services Committee passed by a vote of 39-29 a bill that would create the Consumer Financial Protection Agency. A summary of the bill can be read here. Early returns on the outcome of the preliminary legislative battle have been revealed in preparation for the debate in the months ahead.
Anti-Money Laundering
Some investors defrauded by Bernard Madoff added KPMG, JP Morgan Chase and The Bank of New York Mellon Corporation as co-defendants to a civil lawsuit filed in New York State Supreme Court on October 20, 2009. Additional details (via a Reuters article filed with the New York Times) can be viewed here.
Data Security
Janet Napolitano, Secretary for DHS recently commented on the lack of a need for a “cybersecurity czar”, instead urging citizens and businesses to help in the fight against cybercrime and cyberattacks and detailing her department’s role in the fight.
CNET has an extensive interview with Jeff Moss, a member of the Homeland Security Advisory Council. Mr. Moss presents his thoughts on the national ID card debate, the role of government and social networking and the dangers of cyberspace 10 years ago as opposed to present time.
A Gallup poll released on Friday, October 16, 2009 shows that over 2 in 3 Americans are worried about identity theft and all that that entails. Meanwhile, a recent Unisys poll shows that although 58% of all Americans would be willing to provide biometric data to merchants and financial institutions in order to verify their identities, only 22% said they trusted government institutions to protect their data while 29% trusted their financial institutions. A related article at Dark Reading can be seen here.
This article at Digital Transactions takes a look at the behind-the-scenes legwork performed by the Secret Service with respect to the investigation of three individuals allegedly responsible for the data security breach against Heartland Payment Systems, Inc.
The Smart Card Alliance has issued a white paper aimed at documenting the introduction of new fraud mitigation and prevention measures in the payments industry and the impact of chip card technology on card fraud.
Gov. Schwarzenegger has vetoed a bill that would have required retailers to provide more details about a data security breach, including the type of personal information exposed, a description of the incident and exactly when it took place. It would have also required merchants to submit a copy of the notification letter to the California attorney general’s office if more than 500 California residents were affected in a single episode.
Security researchers have managed to read the communication encryption and user authentication codes required for mobile devices, according to a recent interview conducted by CNET News.
The Financial Fraud Action UK, the voice of the payments industry for financial fraud matters in the United Kingdom recently advised about the rise in popularity of an old-style telephone scam.
October 22, 2009 marked the official launch of Windows 7, the next generation of computer operating system platforms for Windows-based computers. CNET had a live blog which can be viewed here and a review (albeit for Windows 7 Professional) here.
The Electronic Privacy Information Center filed an amicus curiae brief asking the U.S. Court of Appeals for the 4th Circuit to uphold privacy advocate Betty Ostergren‘s First Amendment right to publish Social Security numbers legally obtained from public records on government Web sites. The case is Ostergren v. McDonnell, 3:2008cv00362, to be argued in the Virginia Eastern District Court.
Losses caused by massive fraud could bring down as many as ten financial institutions within the next three years, according to predictions made by analysts at Treasury Strategies, Inc., a Chicago-based consultancy specializing in financial services.
Pending Litigation — California
On October 20, 2009, California’s attorney general, Jerry Brown, said that he was suing State Street, the large Boston-based bank, accusing it of committing “unconscionable fraud” against the state’s two largest employee pension funds, Calpers and Calstrs. More than $200 million in overcharges and penalties will be sought out. The press release can be viewed here and the complaint here.
Financial Institution Regulation
The Brookings Institution has published an opinion piece on the question of “too-big-to-fail” and the feasibility of limiting the size of U.S. banks and other financial institutions.
Credit CARD Act of 2009
The GAO has released a report entitled “Credit Cards: Fair Debt Colleciton Practices Act Could Better Reflect the Evolving Debt Collection Marketplace and Use of Technology”. Approximately 6.6% of all credit cards were 30 or more days past due for the first quarter of 2009, the highest rate in 18 years. The report addresses three objectives — namely (1) whether federal and state consumer protections and enforcement responsibilities regarding credit card debt collection are sufficient; (2) whether the processes and practices involved in collecting and selling delinquent credit card debt need more oversight; and (3) whether there are any outstanding issues that may exist related to some of these practices and processes.
The House Financial Services Committee unanimously passed HR 3639, the Expedited CARD Reform for Consumers Act of 2009, which would move up the effective date for credit card reforms from February 22 to December 1, 2009. In addition, the Committee voted to incorporate an amendment that struck the gift card provisions from bill so that the new gift card laws will not go into effect on December 1, 2009, but will instead go into effect as originally planned, on August 22, 2010.
An editorial published on October 22, 2009 in the New York Times exhorts Congress to pass the Expedited CARD Reform Act of 2009 as soon as possible in the interest of the public good.
Payments
Although the recession hasn’t crippled PayPal, the downturn and the seemingly fragile recovery have created some surprisingly resistant challenges for Bill Me Later, the online credit processor PayPal parent company eBay Inc. acquired a year ago and this week integrated into PayPal. Meanwhile, industry rumors continue to percolate that eBay may spinoff PayPal some time in the next few months.
Upcoming Conventions
Prepaid Expo USA 2010 will be held on February 22-24, 2010 in Las Vegas. The keynote speakers are former U.S. President Bill Clinton and Arkadi Kuhlmann, CEO of ING Direct. President Clinton’s speech will take place on Monday, February 22, 2010 at 2:30 pm.
Related Posts
- News Roundup — October 26, 2009 to October 30, 2009 - October 30, 2009
- News Roundup — October 12, 2009 to October 16, 2009 - October 16, 2009
- News Roundup — September 28, 2009 to October 7, 2009 - October 7, 2009
- News Roundup — June 22, 2009 to June 26, 2009 - July 2, 2009
- News Roundup — November 5, 2009 to November 13, 2009 - November 13, 2009
