Rohit Rana,

The Consumer Financial Protection Bureau’s new interpretative rule regarding BNPL reveals new requirements for BNPL providers under Regulation Z. With less than 60 days left before the rule takes effect, BNPL providers need to quickly rework their card programs and align their servicing processes to comply with Regulation Z. Our blog post explains what BNPL providers can expect with the change and the solutions LoanPro offers to seamlessly implement these new compliance measures into their credit products. Read here: https://lnkd.in/gm5yHiRz

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To the likely surprise of providers of buy now, pay later (BNPL) financing, the #CFPB recently issued an interpretative rule stating that BNPL products are actually "credit cards" under the Truth in Lending Act and BNPL providers are "card issuers" and therefore "creditors" under, and subject to, Regulation Z. Scott Pearson, Bryan Schneider and Eric Knight explain the significance here:

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Are you using the right payment method for your business transactions? Understanding the differences between ACH and credit card transactions is essential for optimizing payment processes and reducing costs. Our latest blog dives into the key aspects of ACH and credit card processing, providing insights into their benefits, costs, and best use cases. Whether you manage finances for a small business or oversee payments at a larger company, knowing the right context for each payment type can greatly enhance your operational efficiency. We explore transaction speeds, security measures, and the financial implications of both methods. For detailed insights and to ensure you're making the best choices for your business, read our full comparison here: https://lnkd.in/gUk3uAgu

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Many FIs rely on tools that use consumer data 📊 to inform risk assessments - and although such tools are valuable, they can add another layer of complexity. When consumer data comes into play, FIs need to make sure they're managing the data responsibly, in compliance with the Fair Credit Reporting Act (FCRA). 📝 So, what is the FCRA? When can your FI use a non-FCRA vs. an FCRA risk assessment solution? And what are the benefits? 🤔 💡 Swipe through for the answers to all this and more and read our recent blog for the full breakdown. https://lnkd.in/gctCJANq

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When it comes to harnessing data, small community banks and credit unions often find themselves at a disadvantage. There's fragmented data, limited resources to dedicate, burdens of regulatory compliance, and often heavy learning curves to adopt new tools. Additionally, in the world of banking, they're often not prioritized over larger institutions. Sonder solves that. Read our whitepaper at https://sonderlabs.io/ and explore how your institution can transform challenges into opportunities with the power of data! #DataDrivenFinance #FinancialInnovation #CommunityBanking #CreditUnions

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Traditional banks must adapt their card issuing practices to compete with fintech disruptors and meet evolving consumer demands. Legacy systems, regulatory hurdles, and budget limitations slow progress. Learn how a CMS Gateway can help banks innovate and stay relevant. Read more in our article: https://lnkd.in/eZQ6yEX9 via Seamless Xtra

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Are bank regulators focusing enforcement activity in the right place to create a healthy banking system?  The fact that a third of the Q1 public enforcement actions related to partner banking gives me pause.  A little historical context.  I recently found an article showing that in Q1 2008, with the global financial crisis just over the horizon, just over a third of bank regulators’ public enforcement actions were related to BSA/AML. With the benefit of hindsight, regulators would certainly have focused priorities very differently at that time.  And it’s hard to argue now that partner banking is anything like the most important issue facing the banking system. Matt Harris recently made a cogent argument that the immediate challenges banks currently face with underwater securities and commercial real estate are only the tip of the iceberg.  If you haven’t seen it, follow the link to his analysis of the impact that AI will have in compressing net interest margin and the consequent need for banks to build scale and/or non-interest income. I don’t endorse everything Matt says about regulators, but I strongly agree that many banks need to get creative to have a long-term future.  And that requires regulators who don’t overreact to mistakes of strategy and execution with limited impact on safety and soundness, consumer protection, or financial crime. As an example, I was recently helping a bank whose regulators had found gaps in beneficial ownership records of its fintech clients.  I was puzzled that the bank had gotten this wrong on fintech clients but not on its core business.  The Bank told me they were also now fixing similar issues in their core business, but the regulators hadn’t even examined those files. I’ve said before that a lot of enforcement actions we have seen in BaaS have been fully justified and I stand by that.  But recently I’m seeing an increasing number of cases where regulators are, in effect, examining and enforcing more stringently for BaaS business than traditional business. Regulators genuinely want community banks to overcome the challenges of the current environment.  They can help by ensuring that banks conducting BaaS and other novel activities don’t face regulatory equivalent of police speed guns looking for cars driving a mile over the speed limit. 

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As member of the Center for Payments, and in conjunction with Nacha and ICBA, SFE is seeking your input on a fraud study: https://lnkd.in/ejhc2kRb.   The study has three primary objectives: -- To deepen understanding of the impact that payments fraud imposes on financial institutions and their customers or members. -- To evaluate the current methodologies employed by financial institutions in identifying instances of payments fraud. -- To delineate the strategies and protocols adopted by financial institutions once instances of payments fraud are detected. The results will be used to provide actionable insights that will empower financial institutions to enhance their defenses against payments fraud and safeguard the integrity of their operations. In addition, each participating financial institution will receive a confidential, personalized Company Performance Report. Please take the time to respond, limiting to only one response per FI. The survey closes May 31, and we want to make sure we have your input! https://lnkd.in/ejhc2kRb. Danita Moss, AAP, NCP Pam Rodriguez, AAP, CIA, CISA Catherine Bishop, AAP, APRP, NCP Sandra Parker David P. Dominic Plumeri, AAP, APRP

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Having transparency and clear rules to define and adopt an open banking standard in the US is beneficial. Open banking relies on an open, common, and shared standard to ensure interoperability within the financial ecosystem. This is crucial for adoption and reducing integration costs. Therefore, such a standard is necessary. Today, the Financial Data Exchange (FDX), a non-profit organization in the US, has worked tirelessly with the financial community to establish these standards and publish their FDX APIs. There are already over 76 million FDX-ready accounts in North America, making it the de facto standard. Hopefully, the Consumer Financial Protection Bureau's published rules today will make it easier to recognize FDX as such. #openbanking #openfinance OpenFinity

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Banks say Basel update means they will be using unrealistic scenarios to test interest rate risk. https://hubs.li/Q02G9f_K0 Non-subscribers can get a snapshot of Risk’s coverage. Registration is free and allows you to read two articles a month: https://hubs.li/Q02G9g720

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In this episode of Payments Pros, Carlin McCrory and Keith Barnett welcome back Jordan Bennett, AAP, APRP, Nacha’s senior director of network #riskmanagement, for a two-part series on the newly approved rules designed to combat credit push fraud. Credit push fraud has been on the rise, and Nacha released a risk management framework to increase awareness and mitigate such frauds. #creditfraud #consumerfinance

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Is inadequate test coverage affecting your bank’s performance? 🏦 In the competitive landscape, inadequate test coverage can lead to defect leakage and poor customer experience. Ensure your testing strategies are robust and comprehensive to avoid these pitfalls. Download our latest report on SIT & UAT strategies and learn how our team of experts can help your bank in building advanced test design techniques and optimize your testing processes- https://lnkd.in/dgSDkEbK #GLF #GoLiveFaster #SIT #UAT #USBanking #SoftwareTesting #CustomerExperience #DefectPrevention #BankingInnovation #QualityAssurance

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Dear bank owner and/or executive, Reducing dependency begins with being willing to make temporarily uncomfortable changes. We see four possible scenarios for your bank: Scenario 1️⃣ The hostage feeling is horrible but it's not enough to make meaningful change. You send emails, open tickets, file complaints, and nothing really happens. It becomes something to talk about during company events, conferences, and posts like this. Scenario 2️⃣ The hostage feeling is horrible but not as scary as your regulator. You send emails, open tickets, file complaints, and nothing really happens. It becomes something to talk about during company events, conferences, and posts like this. Scenario 3️⃣ The hostage feeling is so horrible that anything sounds better and so you sign another agreement with a provider that promises an easier life. It's more modern, faster, and more secure. It'll bring in more deposits and all the fee income you could ever dream of. You eventually do something (or forget to do something) that results in your regulator knocking at your door. Scenario 4️⃣ You've had it with that hostage feeling created by everything around you. You, or someone you assign, commits to learning the basics of what makes up processing infrastructure regardless of vendor or technology - 30 minutes a day for the next 90 days. You make a decision to act and methodically start to assemble the pieces over time. We recently asked one of our bank customers to share what he thought was required to make meaningful and lasting change. Here's what he shared: - A Supportive Board of Directors - Staff Willing to Step Up & Learn - Guts - Patience Not a single thing on this list is about technology. Make the decision and you'll find the right technology and partners to help you get there. Sincerely, Randy #communitybank #creditunion #fintech

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4 Comments

Buy one get one free has been popular until you realize it is not really free

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This is such a key point across industries including #automotive #mortgage #personal_loans. Fraud is hidden in early payment default losses and having an Identify Fraud solutions that requires only Name, address, DOB, SSN will not protect the majority of losses lenders are fighting from fraud & misrepresentation (also thought of as first party fraud). Thanks Justin and Frank for another great podcast.

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For more than a decade, Auriemma Roundtables has been the preeminent bank and deposit fraud benchmarking partner for dozens of institutions. We are thrilled to announce a new segment of our studies are opening to credit unions and small-to-midsized banks. When the entire industry compares performance, it is better prepared to stop fraud attacks. More details at the link below. #fraudprevention #fraudbenchmarking

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This financial institution is leveraging OnSolve to: 1. Uphold the duty of care for all employees. 2. Save time, cost and effort with historical risk data. 3. Take advantage of destination research. Read the full story here: https://bit.ly/4b1W75Q

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