Independent Banker - December 2023 - 27

Next: The boundaries of bonds 
proposed rules to curb excessive
credit card late fees. At the time of this
writing, the bureau had not finalized
the rules.
Section 1071 and CRA
developments
On March 30, 2023, the CFPB issued
a final rule amending Regulation B to
implement changes to the Equal Credit
Opportunity Act made by Section
1071 of the Dodd-Frank Act. Covered
financial institutions are required to
collect and report to the CFPB data
on applications for credit for small
businesses, including those that are
owned by women or minorities.
" Since the final rule was issued,
ICBA has secured some wins on the
legislative and judicial fronts, " says
Mickey Marshall, ICBA assistant vice
president and regulatory counsel. " This
includes a successful Senate resolution
that would nullify the effect of 1071
and a ruling in our Texas lawsuit that
grants nationwide injunctive relief for
all community banks. "
On Oct. 24, 2023, the federal bank
regulators jointly released a final rule to
modernize Community Reinvestment
Act (CRA) regulations. The final rule
raises the small bank asset threshold
from $357 million to $600 million in
assets and creates a qualifying activities
list and preapproval process that will
increase certainty about whether
prospective loans or investments count
for CRA credit. However, by classifying
all banks with more than $2 billion in
assets as large banks, ICBA said in a
statement responding to the final rule,
it does not sufficiently differentiate
between community banks and the
nation's largest banks.
" While ICBA and the nation's
community banks support agency
efforts to modernize the CRA's
implementing regulations, regulators
must recognize that a regulatory
change of the length and complexity of
" Unfortunately, rulemaking outside the traditional
method-for instance, in a blog post or speech-
may be too 'broad brush' and can cause
misunderstanding and misinterpretations. "
-KARI MITCHUM, ICBA
this rule will create disproportionate
implementation costs for community
banks, " ICBA president and CEO
Rebeca Romero Rainey said in a
statement responding to the final rule.
Customers' access to their data
Finally, the CFPB released its proposal
to implement standards for sharing
consumer financial data under Section
1033 of the Dodd-Frank Act.
The CFPB's proposed rule would
require depository and nondepository
entities to make available to
consumers and authorized third
parties certain data relating to
consumers' transactions and accounts.
It would stagger compliance deadlines
according to four tiers based on data
providers' size, technology, and use
of third-party service providers and
legacy systems.
" Section 1033 deals with the
customer's access to their financial
data, " Marshall says. " If customers
request it, the bank would be required
to provide the information in what is
called a 'machine readable' format-
basically, a digital transaction history
and information about the customer's
accounts. Conceivably, customers
may want to share the information
with third-party payment entities
or another financial institution with
which they have or are establishing
an account. "
Despite a slow start from the
regulatory agencies in early
2023, the pace of activity picked
up substantially late in the year,
reflecting the continued importance
of closely monitoring all types of
regulatory communications.
Mary Thorson Wright is a writer
in Virginia.
More from ICBA
The ICBA Compliance Institute is built to meet the needs of
seasoned professionals seeking the latest regulatory education
and industry best practices, as well as newer compliance officers
seeking to gain a clear understanding of the fundamental concepts
of each regulation. Register today for the ICBA Compliance
Institute, Feb. 25-March 1, 2024, in Dallas. icba.org/education
independentbanker.org // 27
http://www.icba.org/education http://www.independentbanker.org
Independent Banker - December 2023

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