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Current Important Topics

Regulation J: Fed/Now Service –

The Federal Reserve Board (FRB) has published final changes to Regulation J (Collection of Checks and Other Items by Federal Reserve Banks and Funds Transfers through Fedwire) that govern funds transfers made using the new FedNow Service (FedNow).

FedNow will be a new 24x7x365 service that will support instant payments in the U.S. It is expected to be available in 2023 and will operate alongside similar services provided by the private sector.

The effective date is October 1, 2022, but it not expected to be ready until Q2 of 2023. Most expect it in May of 2023.

The good news is the BMA is currently working on this enhancement and will be ready to offer it in conjunction with the Fed/Now release

Reference: Compliance News / August 2022 Edition / Page 3

Regulation ZZ: LIBOR Replacement –

The Federal Reserve Board (FRB) has published a proposed new regulation (Regulation ZZ – 12 CFR Part 253) that would implement the Adjustable Interest Rate (LIBOR) Act[Enacted as Division “U” of the Consolidated Appropriations Act, 2022 (H.R. 2471; P.L. 117-103; signed into law on 3/15/22)]. Regulation ZZ would establish default rules for replacing references to LIBOR (London Interbank Offered Rate) in so-called “tough legacy contracts” (TLCs).

  • TLCs have the following characteristics:
  • Governed by U.S. law
  • Reference U.S. Dollar (USD) LIBOR;
  • Do not mature until after USD LIBOR ceases; and
  • Do not contain adequate fallback provisions that provide for a clearly defined and practicable replacement benchmark rate following the cessation of LIBOR.

Emerging Issues

Digital Commodities Consumer Protection Act / S. 4760

8/3/22 – Introduced in the Senate by Debbie Stabenow.
Key Provisions:

  • Would give the Commodity Futures Trading Commission (CFTC) new tools and authorities to regulate “digital commodities” (including Bitcoin and Ether).
  • Would empower the CFTC with exclusive jurisdiction over the digital commodities spot market.

Retirement Protection Act / H.R. 8579

7/28/22 – Introduced in the House by David Schweikert.
Key Provisions:

  • Would modify the saver’s credit by replacing the three-tier formula with a single 50% credit on contributions up to $2,000, with phase outs beginning at certain adjusted gross income thresholds.
  • Would also provide for a one year $4,000 temporary increase in retirement contribution limits.

Expanding Access to Credit Through Consumer – Permissioned Data / H.R. 8485

6/21/22 – Introduced in the House by Nikema Williams.

Key Provisions:

  • Would require lenders, if requested by a loan applicant, to consider additional alternative information (i.e., information not typically considered and not typically found in credit reports) when evaluating the applicant for a mortgage.