Iowa Banking Law Blog

Remote Deposit; Regulation R; the DIF; and ILC's

A report has been published by Celent outlining the seven habits of highly effective remote deposit capture deployers (click here for link).  For more on remote deposit capture, see this prior article on the Iowa Banking Law Blog.

Eight years after the passage of the Gramm-Leach-Bliley Act, the SEC and Federal Reserve adopted rules implementing the bank broker provisions of GLBA.  For an outline of the key provisions of Regulation R click here.  We will have more on this important topic later. 

The FDIC has reported its second quarter financial results for the Deposit Insurance Fund.  THe DIF earned $1.06 billion in the first 6 montyhs of 2007, raising the balance to $51.2 billion. 

Disease management and mail order pharmacy services, according to the Federal Reserve, are "complementary to a financial activity."  Thus, the Federal Reserve approved an application for a de novo industrial loan company whose primary business is selling and underwriting health insurance and who also provides mail order pharmacy services through its subsidiaries.  The ILC will be named ARCUS Financial Bank.  See article by the Banking Law Prof, and the Federal Reserve Release. 

Saturday Links

The most recent edition of the FDIC Quarterly features two studies--on on the feasibility of privatizing deposit insurance and one on the effectiveness of the FDIC's Money Smart financial education program.

The Employment Practice Group at Dickinson, Mackaman, Tyler & Hagen P.C. has issued its Fall newsletter.  Included are articles on increased immigration enforcement, a case law update on the Americans with Disabilities Act, changes in the NLRB presumptions in backpay calculations, and a summary of Ollis v. Hearthstone Homes, an interesting case on religious discrimination.

In FTC v. Check Investors, Inc. the 3rd Circuit upheld injunctive relief and over $10 million in fines for violations of the FTC Act and the Fair Debt Collection Practices Act (FDCPA) involving collecting on defaulted checks (NSF checks).  (Check Investors is in the business of buying checks written with insufficient funds.  The court held that NSF checks are debts under the FDCPA, that the payors of the checks are consumers, and that defendants were debt collectors and not creditors under the FDCPA.

Red Sox v. Yankees, Cubs v. Cardinals, Ohio State v. Michigan, Macs v. PC's . . . credit unions v. banks.  As described in an article in American Banker, www.bankerspank.com features various videos parodying the Mac v. PC television ads with the out-of-touch PC user and young, hip Mac user.  In these ads, however, the young, hip guy represents credit unions while the other guy represents banks.  The author of the website remains anonymous.   

Saturday Links

The Federal Agencies jointly released the revised Bank Secrecy Act / Anti-Money Laundering Examination Manual.  Changes include a discussion regarding remote deposit capture, clarified responsibilities regarding ACH transactions, and an enhanced section on suspicious activity reports.  Click here for a brief summary of the changes.  The linked release also has a link to the actual manual.

In a report published in July, Celent reports that fewer than 2% of financial institutions currently offer online account opening and estimates that by 2010 that figure will increase to 18-20%.  Celent's full report must be purchased, but the summary provides some basic information on online bank account opening.  [if you have any question on the legal implication of online bank account opening, contact Jeffrey J. Andersen]. 

Both the Federal Reserve  and the FDIC released valuable resources to consumers.  The Federal Reserve has a site collecting relevant online resources for consumers faced with foreclosure.  Click here for the link.  The FDIC released a report entitled "51 Ways to Save Hundreds on Loans and Credit Cards" containing information and tips on a variety of issues, including student loans, mortages, auto loans, and payday loans. 

Saturday Links

George Will wrote an article for the Washington Post entitled "Folly and the Fed" that takes an interesting glimpse into both the pre-Federal Reserve past.  No matter your political bent, it is a concise, interesting read.

In an article in Computerworld, it is reported that TJX has incurred over $150 million in losses as a result of the recent data breach.  See "TJX says breach costs may exceed $150M."  The article states that this is the costliest data theft to date.  The TJX breach is expected to increase spending and investment into data security.  As discussed in a previous Iowa Banking Law Blog article, it has also prompted legislation.  See article on Minnesota Plastic Card Security Act.

Saturday Links

The FDIC issued its 2nd Quarter Letter to Stakeholders highlighting the FDIC's activities and accomplishments over that period.  The Letter contains links to many of the FDIC's important publications over this period and summaries of important statistics.

The Board of Governors and FinCEN assessed a 20 million dollar civil penalty against American Express Bank International and a 5 million dollar penalty against American Express Travel Related Services, Inc. for Bank Secrecy Act violations.  Roger T. Cole, the director of the FRB Division of Banking Supervision and Regulation said "Today's action by the Federal Reserve underscores the necessity for banking institutions to have anti-money laundering controls in place that are commensurate with the level of risk associated with their operations.  Every banking organization should ensure that its risk-management practices are effective in mitigating the risks associated with its particular operations.”  Click here to link to the official FRB press release.

For a page and a half insight into the economic traumas of the last week, see an article by Daniel Gross in Slate magazine entitled "When Fools Rush In, The Joke's on Them, Dissecting the Henry Youngman Economy."

"The Federal Reserve Board on Wednesday announced the execution of a Written Agreement by and among Marshall BankFirst Corp., Minneapolis, Minnesota, BANKFIRST, Sioux Falls, South Dakota, the South Dakota Department of Revenue and Regulation, Division of Banking, and The Federal Reserve Bank of Minneapolis."  The agreement is available here. 

Saturday Links

The August Chicago Fed Letter (available here) discusses the current payment methods environment. The letter discusses demographic trends in competing for young adults and other consumers who have been underserved by the financial services industry, the recent trend of mobile payments, the future of cash, and the growing presence of retailers within the payments system.

The Federal Reserve Bank of Chicago named Charles Evans as its new president.  For a brief biography of Mr. Evans see his Biography page on the Federal Reserve Bank of Chicago site.  For more information and analysis see articles in the Chicago Tribune and the Daily Herald.

Two leaders in the House Financial Services Committee, Carolyn Maloney and Paul Gillmor, have introduced a bill that would allow consumers to freeze access to their credit reports.  For a brief description of the bill click here.  The text of the bill is not yet available online, but should be soon.  When it is, it should be here.

The Federal Reserve Bank of New York published an article in its Current Issues in Economics and Finance entitled "Evaluating the Relative Strength of the U.S. Capital Markets."  It discusses the growing concern that U.S. capital markets are losing market share to overseas competitors.

Saturday Links

ruI was just about to write an entry on the importance of an electronic document and email retention policy when I noticed that Rush on Business had beat me to the punch.  For a concise, well-written summary on the topic see "Document Retention and Electronic Discovery."

The Federal Reserve Bank of Chicago prepared a summary of the 12 Federal Reserve district's analysis of the state of the U.S. economy.  (note that this summary and the analysis itself does not include the market occurrences of the past week).

Roth & Company, P.C., in addition to a tax updates blog, has an Iowa Bank Tax Guide available online.  The Guide is an excellent resource and provides answers to many basic Iowa Bank Taxation questions.

Celent, a financial institutions research and consulting firm, has summary of reports on Online Account Opening and Multifactor Authentication.  The full reports must be purchased (presumably), but the summaries still contain some interesting information.

Lastly, the Business and Corporate Practice Group at Dickinson, Mackaman, Tyler & Hagen, P.C. has the Spring edition of its newsletter available online.  It contains articles on liability for executive compensation, shareholder preemptive rights, and stock purchase agreements.  Stay tuned for future newsletters.

Saturday Links

On Saturdays, the Iowa Banking Law Blog will post links to recent articles available on the web that may be of interest to you or others at your bank.  If you know of an article that would of interest to the Iowa banking community, feel free to post a comment with a link and a very brief description.

BankNews.com has a July Special Report on the Unbanked and Underbanked Market.  It features links to articles, presentations, and other publications outlining trends in this untapped market and what banks, regulators, and other entities (such as Wal-Mart) are doing to reach out to this market.

The Federal Reserve Bank of Chicago released an excellent article entitled "Are mobile payments the smart cards of the aughts?"  In the words of the author, the article "compares the much anticipated but ultimately stall smart card revolution of the 1990s with the current expansion of mobile payment platforms, and asks how mobile payments fit into the larger payment system."

The Banking Law Professor Blog points out that the Federal Reserve Bank of San Francisco posts a monthly, one-page summary of the state of the U.S. economy.  These succinct, "Cliff's Notes" on the U.S. economy are a great way to stay apprised of general market trends.

Lastly, the Labor and Employment Practice Group of Dickinson, Mackaman, Tyler & Hagen, P.C. released the summer edition of its period newsletter "Hire Perspectives."  This newsletter may be of interest to the person(s) responsible for human resources at your bank.  The current edition features articles on coordinating FMLA leave with short term disability and sick/vacation leave benefits, supervisor liability for a subordinate's sexual harassment of another, and a new, online "Fair Labor Standards Act Overtime Calculator" unveiled by the Department of Labor.