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Credit Card Late Fees Lawsuit to Remain in Texas
The U.S. Court of Appeals for the Fifth Circuit ruled that a district court made an error by transferring a lawsuit over the Consumer Financial Protection Bureau's (CFPB) rule on credit card late fees from Texas to Washington, D.C. The lawsuit was brought by banking and business groups challenging the CFPB's rule, which would lower the safe harbor amount for late fees and eliminate the annual inflation adjustment. The appeals court found that the transfer was incorrect because they had already granted a temporary stay on the transfer order.
Read the Ruling
OCC Looks Ahead at AI, Fraud
In a speech last week, Acting Comptroller of the Currency Michael Hsu suggested that a new British regulation requiring banks to reimburse customers for losses due to push payment fraud warrants discussion in the U.S., particularly when artificial intelligence (AI) powers the fraud. Hsu emphasized AI's dual role in banking, both as a tool for combating fraud and as a potential facilitator of it. He suggested that banks and AI companies are best suited to provide fraud solutions. Hsu referenced the U.K.'s Payment Sytems Regulator rule, which splits reimbursement for fraud losses evenly between the customer's bank and the receiving bank. He proposed a similar split when AI is involved in fraud, aiming to protect consumers while incentivizing the development of effective defenses.
Read Hsu's Speech
OCC Extends Bank Merger Comment Period
Today, the Office of the Comptroller of the Currency (OCC) announced an extension of the comment period from the original April 15 deadline to June 15 on its bank merger policy proposal. In January, the agency issued a proposed rule that would eliminate the time limit for automatic approvals of bank mergers under its supervision. The agency also released a policy statement outlining its approach to evaluating future merger and acquisition applications.
Last month, the Federal Deposit Insurance Corporation (FDIC) also announced proposed changes to its bank merger evaluation process. In a speech last week, Federal Reserve Governor Michelle Bowman said bank merger proposals "may actually exacerbate the existing problems, resulting in an increase in the already significant delays in processing times for some applications."
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