WBA Continues to Amplify Wisconsin’s Banking Industry Voice Through Comment Letter Activity

By Scott Birrenkott

WBA’s comment letter pen has been busy since we last provided an update in April. Since then, WBA has filed 14 additional comment letters with more issues on the horizon.

Comment letters are a crucial opportunity for the banking industry to inform the federal agencies about the impact of rulemaking. Through the public comment process, WBA aims to represent the best interests of the industry at the federal level, whether that means pointing out potentially onerous, unfair, or burdensome rules, suggesting tweaks or improvements, or expressing satisfaction when positive changes are being implemented. The goal is to advocate on behalf of members by conveying information in an impactful, yet concise manner. Given their importance in this process, WBA has long been actively engaged in drafting and filing comment letters on behalf of the membership, often creating drafts for use by banks themselves.

The agencies have been busy with their regulatory agendas, implementing new law, and responding to various executive orders. The 14 letters filed since our last update span a wide range of regulatory priorities, but several notable topics stand out.

One of the most prominent topics recently has been that of digital assets. The GENIUS Act was signed into law last summer, which directed the federal agencies to implement regulations for payment stablecoins. Since then, the agencies have been issuing their rules, and WBA has been commenting throughout this process. To that extent, multiple letters were filed on stablecoin- related proposals from the Department of Treasury, Office of the Comptroller of the Currency, and Federal Deposit Insurance Corporation. As the agencies continue to move forward with their implementation, WBA will remain engaged and continue to comment throughout the rulemaking process. Of concern is to ensure the agencies are consistent in their rulemaking requirements, standards, and supervisory review of payment stablecoin applications and activity. WBA comments regarding payment stablecoins have also focused on helping ensure rigid Bank Secrecy Act/Anti-Money Laundering/Countering Terrorist Financing (BSA/AML/CTF) rules are implemented. With the anticipated movement of money and broadened services payments stablecoin services will bring, consistency in the application and supervisor review standards of BSA/AML/CTF rules are paramount to protect the industry and customers.

In terms of compliance matters, WBA commented on BSA-related topics including whistleblower incentives and reforms to AML/CTF requirements. Additionally, the Consumer Financial Protection Bureau (CFPB) is considering potential regulatory changes to consumer mortgage-related disclosure rules, including Regulation Z right of rescission rules and the TILA-RESPA integrated disclosures (TRID). As part of this process, it issued a request for information seeking comment about potential changes. This is an initial request, for which CFPB has begun gathering general information. WBA commented in response to this initial request seeking numerous changes to help reduce regulatory burden and costs associated with mortgage loan closings while also improving the overall mortgage loan process for consumers. WBA will remain engaged as CFPB issues its first proposal.

WBA has also been actively engaged in the payments space. As discussed in previous “Wisconsin Banker” articles, WBA submitted comments in February regarding a Federal Reserve Bank (FRB) payment account prototype. Since then, WBA has commented on FRB’s request for information on the future of check services, and a request for comment on proposed special-purpose Reserve Bank accounts for clearing and settling certain payment activity. As FRB reviews the comments it has received in these areas, WBA will remain engaged with any forthcoming proposals on these matters. WBA and banks in Wisconsin certainly support innovation and access to evolving technology and payment processing efficiencies. However, new access and services should not come at the price of alienating those utilizing longstanding, reliable services nor bring undue risk to the trusted FRB payment system.

WBA also commented on two Federal Communications Commission (FCC) rulemakings which are significant in the areas of spoofing and fraud. One letter discussed proposals addressing robocalls and another on Know Your Customer identification standards to help ensure more work is done by FCC to investigate, enforce, and sanction those who allow for bad actors to misuse telecommunications technologies to misrepresent others in efforts to steal and defraud people.

Looking ahead, the pen will remain active. Not only will the payment stablecoin rulemakings continue to progress, but WBA anticipates CFPB will issue at least one proposal regarding revisions to mortgage disclosure rules in response to comments received to its initial request. WBA also anticipates rulemakings in response to several executive orders, including appraisal and evaluation improvements, and involving digital signatures and standardizing electronic mortgage closing.

WBA also anticipates continued rulemaking efforts by FCC, where appropriate, to help fight against fraud and spoofing. Ongoing compliance priorities remain as well, such as advocating for exemption threshold increases under the Home Mortgage Disclosure Act and to Regulation O insider lending limits. WBA will also be filing comments in response to proposed revisions to the Community Reinvestment Act.

WBA remains committed to advocating for the banking industry through the comment process and we encourage all members to participate in the rulemaking process by submitting comments to federal and state agencies. It is imperative that agencies hear the impact their rules and regulations directly have on your institution and of your recommendations for improvements. If you have questions about a regulatory proposal or rule, be sure to email WBA Legal at wbalegal@wisbank.com. Additionally, reach out to share your thoughts or data about a particular proposal, as including such facts is more impactful. To assist in tracking agency regulatory actions, review the monthly “WBA Compliance Journal,” check in with your WBA Advocacy Officer, or reach out to WBA Legal.

Birrenkott is the WBA director – legal.