Multiple pieces of bank-related legislation could pass this year, according to a five-person panel of American Bankers Association regulatory experts. The panel discussed the current slate of banking-related bills on Oct. 29 during the American Bankers Association annual convention in New York City.
Congress has still not passed an extension of the farm bill. Uncertainty continues on whether Congress will pass a new farm bill or extend the current version of the bill for another year. Last passed in 2018, the current version of the bill expired at the end of September.
There is congressional interest in passing a new farm bill, said Kirsten Sutton, ABA executive vice president of congressional relations and legislative affairs. The government could pass a clean, one-year bill with hurricane relief assistance following the devastation caused by Hurricanes Helene and Milton, she added. Partisan divisions have complicated the odds of passing a new farm bill. Republicans and Democrats differ on how to pay for larger subsidies to large commercial growers and proposed limits on the federal government’s ability to raise money for food aid.
Congress must reauthorize the 2025 National Defense Authorization Act by the end of the year. Sutton said Congress could add a provision to the bill banning the use of mortgage ‘trigger leads’ to the NDAA. Sutton also sees stablecoin legislation as possible amid Senate interest.
The Consumer Financial Protection Bureau proposal to overhaul how banks and credit unions with more than $10 billion in assets determine overdraft expenses will likely be implemented, said EVP of Regulatory Compliance and Policy Ginny O’Neill. The proposal includes two ways for banks and credit unions to determine costs: One would calculate overdraft expenses and losses using the CFPB’s proposed standards, while the second would use benchmark fee rates set by the bureau —$3, $6, $7 or $14.
ABA EVP of Advocacy and Innovation Jess Sharp criticized the proposed Reg II standards, which would cut the maximum interchange fee large debit card issuers can receive to 14 cents from 21 cents. He said the rule is still under consideration but is on a slower track than regulators initially expected.
As written, BASEL III capital requirements would raise costs while reducing the availability of credit for millions of consumers, said Hugh Carney, EVP of financial institutions policy and regulatory affairs for the American Bankers Association.
The panelists also discussed the uncertainty surrounding FDIC leadership. Current Chair Martin Gruenberg has faced numerous calls to resign in recent months after allegations he fostered a toxic environment at the agency. No nomination hearing has been held for Gruenberg’s proposed replacement, Commodity Futures Trading Commission member Christy Goldsmith Romero, whom President Joe Biden nominated in June to replace Gruenberg. Sutton said Romero Rainey will likely only be appointed chair if Vice President Kamala Harris wins the Nov. 5 presidential election.
Banks are increasingly being placed in untenable positions due to the political differences between states and the rise in state activism, Carney said. His comments came after the Illinois Bankers Association, ABA and other groups filed a federal lawsuit against the Illinois Interchange Fee Prohibition Act, a state law passed last spring that prevents issuers from charging interchange fees on the collection of gratuities and taxes.