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Regulatory Questions and Answers: Prepaid Cards Customer ID


May a prepaid card be set up without requiring customer identification verification?


Regulation E permits not requiring customer identification verification. However, it must be disclosed. If a prepaid account program is set up such that there is no consumer identification and verification process for any prepaid accounts within the prepaid account program, using the following clause or a substantially similar clause: “Treat this card like cash. Not [FDIC] insured.”

Reference: Regulation E: 12 CFR 1005.18(b)(2)(ix)

Regulatory Questions and Answers: CRA Credit


What Qualifies for CRA Credit Under the New Proposal?


The FDIC and OCC together have published a joint proposal to modernize and strengthen the CRA Act.

Activities: They would have clear criteria for the types of activities that qualify for the CRA Act. This would include:

  1. Activities that qualify under the current rule implemented in 1995.
  2. Additional activities that are consistent with the purpose of CRA but don’t qualify
    under the current rule.

Examples – Regulators would be required to maintain a publicly available list of qualifying activities. This list would include examples of:

  • activities that quality,
  • activities that do NOT qualify. This would be determined by the regulators in
    response to specific financial institution inquiries.

Process – Regulators will establish a process whereby a bank could seek a determination from its regulator about whether a particular activity is considered to be qualified.

Emerging Issue: Senior Housing IRA Act (H.R. 5726)

Introduced in the House by Josh Gottheimer / D-NJ 5th District

Key Provisions:

  • Senior Housing Improvement and Retirement Accounts (IRA) Act
  • Would allow certain individual to make a one-time addition of up to $250,000 to their Roth IRAs from the capital gains on the sale of their homes
  • To qualify; individuals would have to (1) be over the age of 55, and (2) have owned their principal residence for at least 20 years

Emerging Regulatory Update: CFPB Data-Collection Rule

The Consumer Financial Protection Bureau (CFPB) agreed to move ahead with developing rules for collecting and reporting data on small-business lending required by Section 1071 of the Dodd-Frank Act.

As part of a settlement with consumer advocacy groups, the CFPB said it will publish an outline of proposed regulations by September. The agency also agreed to convene a Small Business Regulatory Enforcement Fairness Act panel of small-entity representatives by October.

Lobby groups urged the bureau to continue collecting information before initiating any rulemaking and to ultimately exempt community banks.

This also included supporting the Preserving Small Business Lending Act of 2020 (H.R. 5574). This is to repeal the mandate, the latest in a series of legislative efforts.