07/11/2017

Recap - AFT 2017 Spring Summit

A Post-Election Financial Regulatory Overview

Kurt Helwig, president and CEO of the Electronic Funds Transfer Association (EFTA) and Kimberly Ford, Vice President of Global Government and Public Affairs for First Data, returned to address the Association for Financial Technology audience at the AFT Spring Summit at Amelia Island, Fla.

One premise Helwig and Ford suggested to the AFT gathering is regulations can change quickly. “For those of you that were here, and saw us last year, forget everything that we said. Because it all changed last November,” Helwig suggested.

“We have not unraveled all the regulations still,” Ford said. “There are still lots of financial institutions and financial service players spending a lot of money on compliance.”

They touched on a number of possible changes to regulations, such as Dodd-Frank reform, which Republicans would like to see significantly changed, pointed out Ford. However she predicted some of the major provisions, such as the repeal of the Durbin amendment, passed as part of the Dodd-Frank financial reform in 2010 to limit fees charged to retailers for debit card processing, will not reach President Trump’s desk.

Other regulations on the table for possible revision or repeal include the Volker rule, also part of Dodd-Frank, which restricts United States banks from making certain kinds of investments; adjustments to capital requirements, and the Consumer Financial Protection Bureau (CFPB), conceived as a government watchdog.

They detailed proposed CFPB regulations still in play including:

• Prepaid cards. The final rule, released in 2016 goes into effect Oct. 1, 2017, affects open-loop prepaid products. It covers disclosures, access to history and account information, error resolution and overdrafts and credits.
• Payday lending. Proposition rule released in June 2016 received over one million comments. It would impose greater consumer protections on payday loans, auto title loans, deposit advance products and some high-rate installment and open-end loans.
• Proposition rule released May 5, 2016 received more than 100,000 comments. Would ban mandatory arbitration clauses in consumer contracts.

Helwig and Ford also spoke of two major regulatory drivers going forward, that is cybersecurity and data security. Concerns remain about high-profile cybersecurity incidents during the campaign. They also anticipate another bipartisan effort to pass uniform federal data breach notification standards with data safeguard requirements. Much activity exists on this topic across state legislative landscapes as well.

There is also growing interest in fintech with policymakers trying to figure out how to balance consumer protection and flexible enough regulations that doesn’t stifle financial technology innovation. “Banks don’t feel it’s an even playing field,” Ford stated. On the other side, “The big technology companies don’t want to be regulated like banks.”

Helwig added faster payment initiatives rolling right along and the EFTA actively engages with the various stakeholders on initiatives designed to improve the U.S. payment system.