Four Things you Need To Know Today
Transportation Bill Christmas Tree Contains Reg Relief
President Obama signaled he will sign the five-year $305 billion transportation bill that is being fast tracked through Congress in the hopes of beating a December 4th deadline. With Congressman passing so little major legislation these days-lest they be accused of legislating by their constituents-the bill has become a vehicle for a wide range of interests and credit unions and banks are getting something out of the feeding frenzy.
The most direct impact on your credit union is a provision eliminating the requirement for financial institutions to send out privacy notices on an annual basis provided that there has not been a change in their policies regarding the sharing of nonpublic information with unaffiliated third parties(Sec 7501).
Another provision that caught my eye is one setting up a system for credit unions to apply to the CFPB for a community to be classified as “rural.” (Sec 89001) Currently there is no public application process. The designation is important because credit unions and banks operating in these communities have greater flexibility in making Qualified Mortgages under Dodd Frank. The provision also intrigues me as a potential model to be used by the NCUA in designating areas as “well defined local Communities” for purposes of community expansions.
Finally, if you live in a state that allows your credit union to be privately insured, your credit union can now join the Federal Home Loan Bank system, (sec 82001). Here is the bill.
Right on Target?
Target has agreed to pony up $39 million to settle a class action lawsuit brought by credit unions and banks that issued credit and debit cards that may have been compromised by hackers during the Christmas shopping season two years ago. The payout is open to all banks and credit unions that have not already settled with Target.
If the settlement is approved impacted institutions will have the option to make a claim to either receive at least $1.50 per compromised payment card over and above any per-card payment they will receive from MasterCard and Visa’s fraud recovery programs or up to 60% of their total fraud, reissuance and other costs related to the data breach, less any amounts received through the MasterCard and Visa fraud recovery programs.
In re Target Corporation Customer Data Security Breach Litigation was the outgrowth of Target’s announcement in December 2013 that its stores had been hacked by malware that was imbedded on POS terminals. Subsequent disclosures of the company’s lax security precautions led to the resignation of its CEO and provided the highest profile example of why Congress needs to act on data security.
The resolution also underscores the value of state level statutes imposing liability on merchants that negligently contribute to data breaches. Target had the misfortune of being headquartered in Minnesota, a state with a law making merchants responsible for the reimbursement costs of card compromises caused by their negligence.
This Time she Means It!…Really…She Does
Federal reserve Board Chairman Janet L. Yellen gave yet another speech in which she all but promised that we will see the Fed move to raise interest rates later this month. Is it just me or would the Fed do us all a favor by talking less? Forward guidance is great in theory but lousy in practice. Here is the speech.
Not Too Hot Not too Cold
Economic activity in the New York metropolitan area is leveling off as a growing number of industries “appear to be facing increased headwinds from a strong dollar” according to the New York Fed which released its latest snapshot of economic activity in New York, Northern New Jersey, and southwestern Connecticut. In the “tell me something I don’t know” category the Bank’s sages s conclude that “the outlook for the quarter will largely depend on consumer spending in the upcoming holiday season.” Here is a link to its analysis: