Consumer Financial Protection Agency
On September 25, 2009, Rep. Barney Frank (D-Mass.) circulated a discussion draft of legislation to create the CFPA. In addition, a hearing of the full House Financial Services Committee was held on September 30, 2009 for the purpose of discussion of the proposed legislation.
The Brookings Institution released the transcript of Martin Neil Baily’s testimony before the Senate Committee on Banking, Housing and Urban Affairs on September 29, 2009. Mr. Baily was the chairman of the Council of Economic Advisers during the Clinton administration during the 1999 to 2001 term. In addition, he was one of three members of the council from 1994 to 1996. You can view his testimony here.
Mr. Baily’s testimony can be summarized as follows: (1) The best framework to guide current reform efforts is an objectivist approach that divides regulation up into micro-prudential, macro-prudential and conduct of business regulation; (2) the quality of regulation must be improved regardless of where it is done; (3) a single federal micro-prudential regulator should be created combining the regulatory and supervisory functions currently carried out at the Federal Reserve, the OCC, the OTS, the SEC and the FDIC; (4) the United States needs effective conduct of business regulation; and (5) the Federal Reserve should be the systemic risk monitor with some additional regulatory power to adjust lending standards.
U.S. GAO Reports
The GAO recently released a report entitled “Financial Regulation: Recent Crisis Reaffirms the Need to Overhaul the U.S. Regulatory System“. The report is a synthesis of existing GAO work and other studies on the financial crisis such as those from the Department of the Treasury, the Group of Twenty, the Group of Thirty and the Committee on Capital Markets Regulation, among others. A compilation of information from publicly available sources on individual countries’ regulatory systyems and their experiences during the crisis is included.
Credit Cards
On September 24, 2009, Reps. Carolyn Maloney (D-New York) and Barney Frank introduced HR 3639, “the Expedited CARD Reform for Consumers Act of 2009″. Among the various acts contemplated in the bill, the Act changes the effective date for the remaining provisions of the Credit CARD Act from February and August 2010 to December 1, 2009. A press release announcing the bill’s introduction can be viewed here.
The Federal Reserve proposes to amend Regulation Z, which implements the Truth in Lending Act and the staff commentary to the regulation in order to implement provisions of the Credit CARD Act of 2009 that are effective on February 22, 2010. The proposal also republishes portions of the final rules amending Regulation Z’s provisions regarding open-end credit that was published in the Federal Register on January 29, 2009. Finally the proposal also republishes several proposed amendments to the January 2009 Regulation Z Rule that were originally published in the Federal Register on May 5, 2009.
Identity Theft
McAfee has released a white paper entitled “Inside the Password-Stealing Business: the Who and How of Identity Theft“. This research report analyzes the methodology most often employed by identity thieves in the past year, particularly with respect to screen-capture technology, phishing, spam and downloadable malware.
Overdraft Fees
Having lost one brawl with Congress this year over credit cards, banks apparently are in no mood to fight about another increasingly political issue, overdraft fees. Leading debit card issuers Bank of America Corp. and JPMorgan Chase & Co. announced major changes to their overdraft-fee policies last week. A related editorial in The Washington Post can be viewed here.
M-Commerce
Most payments startups focusing on m-commerce these days are relying on either direct debit or carrier billing to handle funds transfers. Billing Revolution, a 2-year old Seattle-based company, is marketing a system that lets consumers buy products on their handsets with a single click and charge their transactions to their credit cards.
Starbucks has recently announced a raft of new mobile capabilities, with iPhone applications to enable consumers to use their phone as their card in a variety of ways, including seeing a balance and reloading. For the payments industry, however, the announced test of a usable-for-purchase prepaid card on the phone, using 2d bar code technology, is a gigantic leap forward. This was enabled by mFoundry, an early leader in mobile banking and one, it appears, is again moving to the forefront, this time in a new category of mobile payments.
Microfinance
Christoph Kneiding at the Consultative Group to Assist the Poor advocates for greater transparency for microlending products, arguing that although laws such as the Truth in Lending Act’s provisions on APR disclosure rates exist in Western countries and in parts of the developing world, some countries with a strong presence of microfinance institutions could do with greater enforcement of transparent pricing with respect to microloans.
Data Security
Dark Reading has a published a recent update on the status of Conficker infections worldwide and inquires as to whether users have been lulled into a false sense of security.
A recent white paper by Webroot on the swiftly changing nature of Internet-related security threats considers the manner in which web-based attacks are evolving to target mobile users and take advantage of all forms of remote access. According to the report (which is downloadable here), one in twelve social networking sites contain inappropriate content which facilitate the spread of malware.
Two new standards to enhance identity and trust between users and network-based services worldwide were agreed to last week at a meeting of an International Telecommunications Union security standards group. Work on identity management could reduce the number of passwords a user might need to gain access to multiple computer networks to just one.
The Internet Corporation for Assigned Names and Numbers (ICANN) reached a new agreement today with the U.S. Department of Commerce allowing the nonprofit greater independence, while giving more countries oversight of the organization. View the Affirmation of Commitments here along with an introductory video by Rod Beckstrom, the CEO of ICANN.
Interchange Fees
A full committee hearing will be held by the House Financial Services Committee on Thursday, October 8, 2009. The topic will be pending legislation relating to interchange fees, specifically HR 2382, the Credit Card Interchange Fees Act of 2009 and HR 3639, the Expedited CARD Reform for Consumers Act of 2009.
Three witness panels will be introduced. This hearing will be webcast.
Prepaid/Gift Cards
On September 30, 2009, American Express announced that it would eliminate monthly fees on its popular gift cards, a move that is likely to increase pressure on its competitors to do the same. The company’s decision takes effect immediately and goes further than legislation enacted by Congress earlier this year. A related article by the Wall Street Journal can be viewed here, describing the fears the prepaid card industry has regarding the impact that pending legislation will have on prepaid cards and gift cards.
The National Branded Prepaid Card Association released a white paper entitled “Leading Practices for Consumer Disclosures of Network Branded Prepaid General Purpose Reloadable Cards.” The purpose of the document is to promote clear and easily understood communication amongst the prepaid card industry and to consumers.
Payments News — European Union
The European Commission is in talks with member states about setting a deadline for the migration of national payment schemes to the new Single Euro Payments Area (SEPA) after a public consultation exercise showed widespread support for the move. The EC initiated consultation with key stakeholders in June on whether and how deadlines should be set for the migration of existing national credit transfers and direct debits to the new SEPA-compliant payment instruments.
Anti-Money Laundering — United Kingdom
The Joint Money Laundering Steering Group has issued a consultation paper as a result of its review of anti-money laundering and counter-terrorist financing standards in the United Kingdom. The Group is a consortium of approximately 18 financial services institutions in the UK, among them the British Bankers’ Association, London Investment Banking Association and the Association of British Insurers. The review represents a second stage of the Group’s guidance, focusing on areas of omission, difficult to implement provisions of the guidance, and looking at changing standards to reflect up-to-date practices. You can download the paper here (137 pages, Adobe Acrobat required).
Related Posts
- News Roundup — September 9, 2009 to September 18, 2009 - September 18, 2009
- 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 — August 24, 2009 to September 8, 2009 - September 8, 2009
- News Roundup — October 19, 2009 to October 23, 2009 - October 23, 2009
