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The FDIC has announced that its Board of Directors yesterday adopted a final rule to amend part 328 of its regulations to modernize the rules governing use of the official FDIC signs and advertising statements, and to clarify the FDIC’s regulations regarding false advertising, misrepresentations of deposit insurance coverage, and misuse of the FDIC’s name or logo.

Among the changes are rules on placement of the FDIC's official sign on digital channels, such as a bank's website and mobile banking app, through which depositors are increasingly handling their banking needs. Beginning in 2025, banks will be required to display a new black and navy blue official digital sign near the name of the bank on all bank websites and mobile apps, and on certain ATMs. The rule also—

• Modernizes requirements for display of the FDIC official sign in bank branches and other physical premises to account for evolving designs of bank branches and other physical bank locations where customers make deposits
• Requires the use of signs to differentiate insured deposits from non–deposit products across banking channels and to indicate that certain financial products “are not insured by the FDIC, are not deposits, and may lose value”
• Clarifies the FDIC’s regulations regarding misrepresentations of deposit insurance coverage by addressing specific scenarios where a person, including a non–bank entity, provides information to consumers that may be misleading, confuse consumers as to whether they are doing business with a bank, and whether their funds are protected by deposit insurance
• Requires insured depository institutions to maintain policies and procedures addressing compliance with Part 328
• Amends definitions of "non-deposit product" to include crypto-assets and specifically address safe deposit boxes

The amendments made by the final rule will take effect on April 1, 2024, with an extended compliance date of January 1, 2025.

• Board Memorandum with summary of the rule
• UPDATE: Published on 1/18/2024 at 89 FR 3504 in the Federal Register

The CFPB yesterday announced it has ordered U.S. Bank National Association to pay nearly $21 million for keeping out-of-work consumers from accessing unemployment benefits at the height of the COVID-19 pandemic. U.S. Bank froze tens of thousands of accounts due to unprecedented numbers of fraudulent unemployment claims. However, it failed to provide people a reliable and quick way to regain access. The bank also failed to provide provisional account credits, while investigating potentially unauthorized transfers. The CFPB’s order requires U.S. Bank to pay $5.7 million to consumers harmed by its actions and to pay a $15 million penalty.

The Office of the Comptroller of the Currency reported it has separately fined U.S. Bank $15 million for the same conduct.

For additional information and links to the consent orders issued by the CFPB and OCC, see "U.S. Bank fined $30M for illegal conduct during pandemic" in BankersOnline’s Penalty pages.

FRBservices has announced that FedNow Service participation continues to show strong growth and diversity heading into 2024, with 331 institutions, headquartered in 45 states and ranging in size from under $500 million to over $3 trillion in assets, now sending or receiving on the network.

The FedNow Service launched in July with 35 participating institutions. The Federal Reserve Banks expect strong network growth to continue in 2024, bringing accessibility to the FedNow Service through the long-standing connections that the Federal Reserve has with thousands of financial institutions across the country.

The Federal Reserve Banks developed the FedNow Service to facilitate nationwide reach of instant payment services by financial institutions — regardless of size or geographic location — around the clock, every day of the year. Through financial institutions participating in the FedNow Service, businesses and individuals can send and receive instant payments at any time of day, and recipients have full access to funds immediately, giving them greater flexibility to manage their money and make time-sensitive payments. Access is provided through the Federal Reserve’s FedLine network, which serves more than 9,000 financial institutions directly or through their agents.

OFAC has posted a Notice of Actions announcing a $1,207,830 settlement with CoinList Markets LLC. CoinList agreed to settle its potential civil liability arising from processing 989 transactions on behalf of users ordinarily resident in Crimea between April 2020 and May 2022, in apparent violation of OFAC's Russia/Ukraine sanctions. The settlement amount reflects OFAC's determination that CoinList's conduct was non-egregious and not voluntarily self-disclosed.

For additional details, see "CoinList Markets LLC settles with OFAC for $1.2M+," in the BankersOnline Penalty pages.

The Treasury Department on Friday released a Joint Statement on the recent EU – U.S. Financial Regulatory Forum, which took place on December 4–5, 2023, hosted by the U.S. Department of the Treasury and the European Commission.

The Forum emphasized close ongoing EU and U.S. cooperation in a range of areas and focused on six themes: (1) market developments and financial stability; (2) regulatory developments in banking and insurance; (3) anti-money laundering and countering the financing of terrorism (AML/CFT); (4) sustainable finance; (5) regulatory and supervisory cooperation in capital markets; and (6) operational resilience and digital finance. Agency participation varied across themes, with representatives expressing views on issues in their respective areas of responsibility.

The Office of the Comptroller of the Currency yesterday reported the key issues facing the federal banking system in its Semiannual Risk Perspective for Fall 2023.

The OCC highlighted credit, market, operational, and compliance risks as the key risk themes in the report. The report also highlights artificial intelligence (AI) in banking as an emerging risk.

The OCC has reported that Deputy Comptroller for Compliance Policy and Acting Deputy Comptroller for the Office of Financial Technology Donna Murphy yesterday testified on the activities and initiatives of the OCC's Office of Financial Technology before the Subcommittee on Digital Assets, Financial Technology and Inclusion, Committee on Financial Services of the U.S. House of Representatives.

In her testimony, Ms. Murphy discussed the OCC’s supervision and regulation related to banks’ use of new and emerging financial technologies. She also highlighted the OCC’s work to engage with banks as they navigate rapid financial technology developments to balance safety, soundness and fairness with innovation and growth.

• Oral statement
• Written testimony

The Treasury Department's Fiscal Service has reported it recently completed the eleven millionth enrollment into electronic solutions such as direct deposit through Treasury's Go Direct program.

“This milestone represents one more step towards our vision for delivering an improved, inclusive payment experience for all Americans,” said Tim Gribben, Commissioner, Bureau of the Fiscal Service. “Today, thanks to efforts like Go Direct, nearly 99 percent of the over 1 billion Treasury-disbursed benefit payments are delivered electronically, ensuring Americans receive their federal payment on time without having to wait on the mail or pay fees to cash a paper check.”

The FDIC recently announced updates to its Technical Assistance Video Program, a series of educational videos designed to provide useful information to bank directors, officers, and employees on areas of supervisory focus and regulatory changes. These resources are intended for community bank directors, officers, and employees.

The FDIC recently added the following Technical Assistance Videos:

• Cybersecurity Awareness for Board Members: This video provides background information on cybersecurity and discusses the board’s role in overseeing their bank’s cybersecurity efforts.
• Cybersecurity Awareness for Bankers: This video discusses the important role bank offers have in designing and maintaining information security programs in a dynamic and evolving cyber threat environment.
• Information Technology: This video provides information for bank directors and trustees regarding oversight of a bank’s information technology program and FDIC information technology examinations.

These videos are available on the FDIC’s Technical Assistance Video Program webpage and on the FDIC’s YouTube channel.

The Financial Stability Board (FSB) this morning announced it has published a toolkit for financial authorities and financial institutions for their third-party risk management and oversight.

The toolkit was developed in response to concerns over the extent and nature of financial institutions’ interactions with a broad and diverse ecosystem of third-party service providers, which could have implications for financial stability.

The primary emphasis of the toolkit is on critical third-party services, given the potential impact of their disruption on financial institutions’ critical operations and financial stability. It also looks holistically at financial institutions’ third-party risk management in light of changing industry practices and recent regulatory and supervisory approaches to operational resilience.

The toolkit, which incorporates feedback from a public consultation conducted over the summer, aims to (i) reduce fragmentation in regulatory and supervisory approaches to third-party risk management across jurisdictions and different areas of the financial services sector; (ii) strengthen financial institutions’ ability to manage third-party risks and financial authorities’ ability to monitor and strengthen the resilience of the financial system; and (iii) facilitate coordination among relevant stakeholders (i.e. financial authorities, financial institutions and third-party service providers).

The FSB promotes international financial stability by coordinating national financial authorities and international standard-setting bodies as they work toward developing strong regulatory, supervisory and other financial sector policies. It fosters a level playing field by encouraging coherent implementation of these policies across sectors and jurisdictions. Working through its members, it seeks to strengthen financial systems and increase the stability of international financial markets. The policies developed in the pursuit of this agenda are implemented by jurisdictions and national authorities.