FTC initiates effort to gather public input addressing commercial data collection

The Federal Trade Commission (FTC) is initiating an effort to garner public comment regarding commercial data collection and use as a means of determining potential new regulations.© Shutterstock “Firms now collect personal data on individuals at a massive scale and in a stunning array of contexts,” FTC Chair Lina M. Khan said. “The growing digitization […]

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The Federal Trade Commission (FTC) is initiating an effort to garner public comment regarding commercial data collection and use as a means of determining potential new regulations.

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“Firms now collect personal data on individuals at a massive scale and in a stunning array of contexts,” FTC Chair Lina M. Khan said. “The growing digitization of our economy—coupled with business models that can incentivize endless hoovering up of sensitive user data and a vast expansion of how this data is used—means that potentially unlawful practices may be prevalent.”

The FTC seeks to address harmful commercial surveillance and relaxed data security practices. Commercial surveillance is defined as the business of collecting, analyzing, and profiting from information about people.

An FTC-hosted virtual public forum on Sept. 8 will provide the public with an opportunity to share input.

The FTC acknowledged while it currently does not possess the authority to enforce regulations over credit unions, the advance notice of proposed rulemaking (ANPR) suggests rulemaking designed to regulate the collection and use of consumers’ data economy-wide.

Additionally, FTC maintains the NAFCU-opposed American Data Privacy and Protection Act (ADPPA) could provide the FTC broad authority to implement and enforce new data privacy and data security standards, including over credit unions.

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CFPB targets failed financial company consumer data safeguards

The Consumer Financial Protection Bureau (CFPB) recently confirmed in a circular that financial companies might violate federal consumer financial protection law when failing to safeguard consumer data. © Shutterstock “Financial firms that cut corners on data security put their customers at risk of identity theft, fraud, and abuse,” CFPB Director Rohit Chopra said. “While many […]

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The Consumer Financial Protection Bureau (CFPB) recently confirmed in a circular that financial companies might violate federal consumer financial protection law when failing to safeguard consumer data.

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“Financial firms that cut corners on data security put their customers at risk of identity theft, fraud, and abuse,” CFPB Director Rohit Chopra said. “While many nonbank companies and financial technology providers have not been subject to careful oversight over their data security, they risk legal liability when they fail to take common-sense steps to protect personal financial data.”

Per the CFPB, financial companies are at risk of violating the Consumer Financial Protection Act if they do not have adequate measures to protect against data security incidents, with the agency citing the 2017 Equifax data breach as an example.

Two years ago, the CFPB charged Equifax with violating the Consumer Financial Protection Act to address misconduct related to data security.

According to the CFPB circular, multi-factor authentication increases the level of difficulty for adversaries to compromise enterprise user accounts and gain access to sensitive customer data; unauthorized password use is a common data security issue, as well as the use of default enterprise logins or passwords; and protocols immediately updating software and addressing vulnerabilities once they become publicly known can reduce such circumstances.

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Lawmakers express concerns about Equifax credit scoring system

A trio of lawmakers have forwarded correspondence to Equifax, noting concerns regarding alleged issues within the consumer credit reporting company’s credit scoring system.© Shutterstock Sens. Elizabeth Warren (D-MA) and Mark Warner (D-VA), and Rep. Raja Krishnamoorthi (D-IL) sent the letter as a means of addressing the company’s alleged failure to correctly report consumer credit scores […]

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A trio of lawmakers have forwarded correspondence to Equifax, noting concerns regarding alleged issues within the consumer credit reporting company’s credit scoring system.

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Sens. Elizabeth Warren (D-MA) and Mark Warner (D-VA), and Rep. Raja Krishnamoorthi (D-IL) sent the letter as a means of addressing the company’s alleged failure to correctly report consumer credit scores and delays in informing lenders and consumers of problems.

The lawmakers allege the inaction resulted in consumers being denied or charged higher interest rates for auto loans, mortgages and credit cards. Also, they are requesting that Equifax be responsible for mistakes in its credit scoring system.

“This is a deeply troubling allegation, raising questions about the impact your opaque practices may have on America’s financial institutions and on individual borrowers, who may be stuck paying higher costs for loans, credit cards, cars and houses,” the legislators wrote. “Your company owes the public a clear and transparent explanation for why and how it made such grievous errors, the scope of the errors and why you have failed to notify affected consumers of these errors.”

The lawmakers have requested answers to questions regarding inaccurate credit score reporting, the impact on consumers, and their plans to notify and compensate impacted consumers by Aug. 19, 2022, per authorities.

Equifax possesses credit scores of over 200 million domestic consumers and delivered more than 2.8 billion consumer credit card files to lenders last year.

The lawmakers cited a report that said from March 16, 2022, to April 6, 2022, Equifax sent incorrect credit scores for hundreds of thousands of consumers to lenders, resulting in higher interest rates and denied applications.

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Read more / Original news source: https://financialregnews.com/lawamkers-express-equifax-credit-scoring-system-concerns/

Lawmakers condemn FDIC appeals process

House of Representatives Financial Services Committee Republicans have forwarded correspondence to Federal Deposit Insurance Corporation (FDIC) leadership regarding the agency’s examinational appeals process.© Shutterstock Rep. Tom Emmer (R-MN) joined 22 colleagues in signing off on the letter to FDIC Acting Chairman Martin Gruenberg, maintaining the appeals process is politicized and retaliatory. While the FDIC conducts […]

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House of Representatives Financial Services Committee Republicans have forwarded correspondence to Federal Deposit Insurance Corporation (FDIC) leadership regarding the agency’s examinational appeals process.

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Rep. Tom Emmer (R-MN) joined 22 colleagues in signing off on the letter to FDIC Acting Chairman Martin Gruenberg, maintaining the appeals process is politicized and retaliatory.

While the FDIC conducts examinations of the financial institutions under its supervision as a means of ensure regulatory compliance, in 1994 Congress required the FDIC to establish an independent process protecting financial institutions from bias and retaliation by FDIC staff if the financial institution seeks to revisit an FDIC examination.

The lawmakers assert the FDIC instead established the Supervision Appeals Review Committee (SARC), staffed it with political insiders and maintained the SARC was underutilized by supervised entities for fear of later retaliation from FDIC examiners.

“The FDIC knew that their choice to revert to a partisan appeals process would be met with concern from legislators and stakeholders alike,” Emmer said. “Nevertheless, they chose to abandon an independent, apolitical body without even asking for public comment. The American people deserve answers on how and why this previously nonpartisan body was abandoned and how the FDIC made their decision to return to cronyism.”

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New Mexico posts record cannabis sales in July

July was a record month for cannabis sales in New Mexico, as the state had its highest monthly sales total since the state legalized recreational adult-use cannabis in April. © Shutterstock Licensed retailers statewide reported cannabis sales of more than $40 million in July, with the month’s adult-use cannabis sales alone topping $23 million. Cannabis […]

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July was a record month for cannabis sales in New Mexico, as the state had its highest monthly sales total since the state legalized recreational adult-use cannabis in April.

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Licensed retailers statewide reported cannabis sales of more than $40 million in July, with the month’s adult-use cannabis sales alone topping $23 million.

Cannabis sales totaled more than $39 million in April and served as the previous record high, per state officials, with adult-use sales totaling just over $22 million in that month.

“These numbers show that the impressive sales generated in the first month of legalized recreational cannabis sales were no fluke — and this is only the beginning,” Gov. Michelle Lujan Grisham said. “We’ve established a new industry that is already generating millions of dollars in local and state revenue and will continue to generate millions more in economic activity across the state, creating thousands of jobs for New Mexicans in communities both small and large.”

New Mexico population centers that include Albuquerque, Santa Fe, Las Cruces, Hobbs and Rio Rancho recorded the highest July sales numbers, according to Cannabis Control Division of the Regulation and Licensing Department statistics.

The Cannabis Control Division releases sales numbers on a monthly basis, with data available at the beginning of each month for the month prior.

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Survey examines investor documents e-delivery preferences

A Securities Industry and Financial Markets Association (SIFMA)-commissioned study maintains a majority of retail investors prefer electronic delivery (e-delivery) for its environmental benefits, speed and convenience.© Shutterstock The analysis conducted by YouGov involved surveying 1,312 individual investors nationwide between May 16 and May 19, 2022. Those surveyed held at least $5,000 across retirement accounts, college-savings […]

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A Securities Industry and Financial Markets Association (SIFMA)-commissioned study maintains a majority of retail investors prefer electronic delivery (e-delivery) for its environmental benefits, speed and convenience.

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The analysis conducted by YouGov involved surveying 1,312 individual investors nationwide between May 16 and May 19, 2022. Those surveyed held at least $5,000 across retirement accounts, college-savings investments, stocks, bonds, mutual funds, or a brokerage account.

Per the survey findings, 85 percent of respondents are comfortable with default e-delivery for investor documents in the future, provided they can still opt-in to paper delivery; 79 percent have already chosen e-delivery for at least one type of investor document; and 8 percent want paper copies of all investor documents sent via the mail.

E-delivery proponents maintain the format is safer and more timely than hard-copy mail delivery, enabling investors to review documents in a more user-friendly method, leveraging modern communications technology to create more productive investor engagement.

The survey also revealed, per officials, 79 percent of individual investors indicated e-delivery is an easy way to cut their carbon footprint; 70 percent agree COVID-19 related mail disruptions showed the importance of e-delivery; and roughly half see speed and convenience as primary e-delivery benefits.

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MBA report examines multifamily lending market

The Mortgage Bankers Association’s (MBA) report assessing multifamily lending maintains last year, 2,215 lenders provided $487.3 billion in new mortgages for apartment buildings with five or more units.© Shutterstock The annual analysis showed the $487.3 billion in volume represents a 35 percent increase from 2020’s number of $359.7 billion, with 32 percent of the active […]

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The Mortgage Bankers Association’s (MBA) report assessing multifamily lending maintains last year, 2,215 lenders provided $487.3 billion in new mortgages for apartment buildings with five or more units.

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The annual analysis showed the $487.3 billion in volume represents a 35 percent increase from 2020’s number of $359.7 billion, with 32 percent of the active lenders making five or fewer multifamily loans over the course of the year.

MBA Commercial Real Estate Research Vice President Jamie Woodwell said 2021 experienced a record level of borrowing and lending backed by multifamily rental properties.

“Strong property fundamentals, rising values, and low interest rates all contributed to the jump in volume, as well as strong demand from every capital source to make multifamily loans,” Woodwell said. “The mix of lenders in the data show the depth and diversity of the apartment lending market.”

The MBA indicated the report stems from surveys of the larger multifamily lenders and Home Mortgage Disclosure Act (HMDA) data covering multifamily loans made by many smaller lenders.

“The first half of 2022 saw continued lending momentum, but significant changes in equity and debt markets – due to higher interest rates and economic uncertainty – have affected the demand and supply of debt,” Woodwell said. “Our latest forecast anticipates that 2022 volume will fall 10 percent from last year’s record levels.”

The report includes a breakout of 2021 multifamily lending volume by investor group, a listing of 2,215 lenders who made multifamily loans last year, and a listing of metropolitan areas and the volume of very-small loans made in each in 2021.

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Agencies seeking feedback on commercial real estate loan accommodations, workouts

Three agencies are seeking public comment regarding a proposed policy statement for prudent commercial real estate (CRE) loan accommodations and workouts.© Shutterstock The National Credit Union Administration (NCUA), the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency are working with state bank and credit union regulators to garner public engagement. […]

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Three agencies are seeking public comment regarding a proposed policy statement for prudent commercial real estate (CRE) loan accommodations and workouts.

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The National Credit Union Administration (NCUA), the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency are working with state bank and credit union regulators to garner public engagement.

“The proposed policy statement will assist credit unions with managing risks associated with multi-family housing and other commercial real estate,” NCUA Chairman Todd M. Harper said. “It also provides credit unions with guidance on working constructively with CRE borrowers who are experiencing financial difficulty. I encourage credit union stakeholders to review and provide comments on the proposed policy statement.”

The proposed statement addresses how financial institutions handle loan accommodations and workouts with regard to risk management, classification of loans, regulatory reporting, and accounting considerations. Additionally, there are updated references to supervisory guidance and loan workout examples.

The proposed statement also reflects changes in domestically generally accepted accounting principles occurring since 2009, eliminating the need for credit unions to identify and account for loan modifications as troubled debt restructurings after adopting the current expected credit losses accounting methodology.

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SIFMA, ICI and DTCC release T+1 implementation playbook

The T+1 Securities Settlement Industry Implementation Playbook was published this week by the Securities Industry and Financial Markets Association (SIFMA), the Investment Company Institute (ICI), and The Depository Trust & Clearing Corporation (DTCC).© Shutterstock The playbook outlines an approach to identifying the implementation activities, timelines, dependencies, and risk impacts that market participants should consider preparing […]

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The T+1 Securities Settlement Industry Implementation Playbook was published this week by the Securities Industry and Financial Markets Association (SIFMA), the Investment Company Institute (ICI), and The Depository Trust & Clearing Corporation (DTCC).

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The playbook outlines an approach to identifying the implementation activities, timelines, dependencies, and risk impacts that market participants should consider preparing for the transition from the current trade date plus two days (T+2) settlement cycle to a trade date plus one day (T+1) settlement cycle.

“As part of ongoing efforts to decrease risk in the system, SIFMA, ICI, and DTCC started discussions in 2020 and formally initiated the effort to accelerate the settlement cycle to T+1 in early 2021,” SIFMA President and CEO Kenneth Bentsen, Jr. said. “This February, we welcomed the SEC’s leadership in supporting the acceleration of the settlement cycle to T+1 via its proposal, which provides regulatory certainty to market participants.”

It should be noted that the SEC’s proposal to shorten the settlement cycle is not yet final, so the playbook serves as a guide to assist with the many complex steps involved in the move to T+1. The playbook assumes a third quarter 2024 transition date to a T+1 settlement cycle, subject to final regulatory approval. It is a complex ecosystem that requires full industry participation with the support of regulators, working together to make an efficient, effective, and risk-free transition to a T+1 settlement cycle.

“ICI is pleased to coordinate with DTCC, SIFMA, and the SEC on the industry-wide effort to shorten the settlement cycle to T+1,” ICI President and CEO Eric Pan said. “Moving to T+1 will provide increased efficiencies for both investors and market participants and reduce settlement risk. The Playbook released today will be a helpful roadmap for our industry, building on the success of the move to T+2.”

The playbook consists of 14 sections, with two sections providing overviews of the previous move to a T+2 settlement cycle and the approach for the latest playbook. Further, eight sections explore specific areas of the trade lifecycle, including trade processing, asset servicing, documentation, securities lending, prime brokerage, and funding and liquidity considerations. The remaining sections outline matters related to regulatory changes, global impacts, primary offerings, buy-side considerations, industry testing, migration plans, and the resources needed to prepare for the transition to T+1.

“The playbook provides a robust strategy and plan for market participants to follow to prepare for the move to T+1,” Michael Bodson, president and CEO at DTCC, said. “The playbook reflects the experiences and lessons learned during the seamless transition from T+3 to T+2 in 2017, and we are confident it provides a clear and defined roadmap to further accelerate the settlement cycle in the most efficient manner possible while mitigating risk.”

Deloitte & Touche LLP was engaged by SIFMA and ICI to assist in drafting this playbook.

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Read more / Original news source: https://financialregnews.com/sifma-ici-and-dtcc-release-t1-implementation-playbook/

FDIC issues fact sheet on crypto companies, FDIC insurance

The Federal Deposit Insurance Corporation (FDIC) published a new fact sheet on what the public needs to know about FDIC deposit insurance and crypto companies.© Shutterstock The fact sheet was developed following recent cases where crypto companies have misrepresented to consumers that crypto products are eligible for FDIC deposit insurance coverage or that customers are […]

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The Federal Deposit Insurance Corporation (FDIC) published a new fact sheet on what the public needs to know about FDIC deposit insurance and crypto companies.

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The fact sheet was developed following recent cases where crypto companies have misrepresented to consumers that crypto products are eligible for FDIC deposit insurance coverage or that customers are FDIC–insured if the crypto company fails. This is inaccurate and can cause consumer confusion about deposit insurance. The fact sheet addresses these and other misconceptions about deposit insurance coverage and its application.

The truth is — FDIC deposit insurance protects bank depositors in the unlikely event that an FDIC–insured bank fails. If that happens, the FDIC insures each bank depositor up to at least $250,000. Since the FDIC began insuring deposits in 1934, no depositor has lost any FDIC–insured funds due to a bank failure.

However, deposit insurance does not apply upon the failure of a non–bank, such as a crypto company. Further, deposit insurance does not protect consumers with non–deposit products such as stocks, bonds, mutual funds, securities, commodities, or crypto assets.

Along with the release of this fact sheet, the FDIC issued a financial institution letter (FIL) containing an advisory to FDIC institutions on deposit insurance and dealings with crypto companies. This advisory reminds FDIC-insured banks that deal with crypto companies to ensure that these crypto companies do not misrepresent the availability of deposit insurance.

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