January 11, 2024
MO Senate Confirms Campbell as State Finance Commissioner
Today, the Missouri Senate confirmed Mick Campbell as commissioner of the Missouri Division of Finance. Campbell was appointed commissioner by Gov. Mike Parson in June 2023.
“We congratulate Mick on his Senate confirmation,” said MBA President and CEO Jackson Hataway. “Mick and his team have been instrumental in our state legislative efforts for the past few years and their work to revitalize the state banking board. His knowledge of the banking industry ensures Missouri banks remain among the strongest in the nation.”
Campbell had served as acting commissioner since January 2022. He previously served as deputy commissioner and has held numerous positions throughout his 20-year career with the division.
Fed Community Banker Council Requests Withdrawal of Debit Card Proposal
A Federal Reserve proposal to significantly tighten the cap on debit card interchange compensation earned by banks has introduced sustainability concerns for smaller and medium-sized financial institutions that are trying to stay independent rather than merging, the members of the Fed’s Community Depository Institutions Advisory Council told the agency during its most recent meeting. Luanne Cundiff, president and CEO with First State Bank of St. Charles, is a member of the council, which suggested that the Fed withdraw the proposal and reintroduce it once an appropriate cost-benefit analysis has been conducted.
As previously shared by MBA, the Fed proposed revising the Durbin Amendment caps in Regulation II to lower the cap from its current rate of 21 cents and .05% of the transaction, plus a 1-cent fraud-prevention adjustment, to 14.4 cents and .04% per transaction and a 1.3 cents fraud-prevention adjustment, effective June 30, 2025. The proposal would apply to debit card issuers with $10 billion or more in consolidated assets.
CDIAC said the sizable revenue cuts that occur once that revenue threshold is crossed may encourage smaller institutions to reduce lending to stay below the limit. They added that the Fed’s proposal also may lead to more mergers as banks consolidate rather than grow independently, so they are able to dilute the lost revenue as part of a larger banking organization.
In a recent issue of The Missouri Banker, MBA President & CEO Jackson Hataway discussed the Fed’s proposal, noting that the board has “lost sight of its mission, values and responsibilities.”
“Instead of attempting to preserve the vitality and diversity of the U.S. banking system, the Federal Reserve is placing more pressure on community banks to consolidate as operational costs increase while revenues are artificially and arbitrarily limited,” Hataway wrote.
The Fed is accepting comments on its proposal until Feb. 12. MBA urges bankers to contact the Federal Reserve with this form or to prepare their own comment letter responding to the proposal.
“Our collective voice is critical in preventing a massive misstep by the Federal Reserve board,” Hataway said.
New Ad Campaign Highlights Opposition to Credit Card Routing Bill
The Electronic Payments Coalition has launched a new ad campaign to highlight the opposition of a wide range of community institutions against a proposed credit card routing bill. If enacted, the Credit Card Competition Act that was introduced by Sens. Dick Durbin, D-Ill., and Roger Marshall, R-Kan., would cause many financial institutions to retreat from card issuance, the coalition said.
The new campaign will educate lawmakers about the negative effects that the proposed credit card routing mandates would have on smaller financial institutions. It also will call out the failure of the legislation’s so-called “carve-out” for community banks and credit unions.
This campaign comes as legislation is receiving consideration among lawmakers. Politico recently reported that members of the Senate Judiciary Committee are considering a potential hearing on the bill this month or next.
MBA President and CEO Jackson Hataway previously said that “this legislation falls under the jurisdiction of the Senate Banking Committee. Proponents of CCCA are skirting procedures to advance their agenda that has devasting consequences for consumers.”
In a recent commentary in The Missouri Banker, Congressman Blaine Luetkemeyer asks why measures like these are “still popping up” when there is “no evidence of benefits to the economy or everyday Americans.” Luetkemeyer wrote that since the Durbin Amendment in the Dodd-Frank Act capped interchange fees on debit cards, proponents have pushed to do the same with credit cards through the Credit Card Competition Act.
“What they fail to acknowledge is how not a single consumer benefited from the debit cap. In fact, it was just the opposite,” Luetkemeyer writes. “Consumers who once enjoyed cash back or other rewards on their debit cards lost those benefits. Free checking largely disappeared, fees increased, and minimum balance requirements became more prevalent.”
He adds that the Credit Card Competition Act would cut services and benefits without achieving savings for consumers, noting the consequences would be “even more devastating for consumers.”
MBA strongly urges banks and their customers to tell lawmakers to oppose the CCCA.
FinCEN Begins Collecting Beneficial Ownership Information
The Financial Crimes Enforcement Network has received more than 100,000 filings since it began accepting beneficial ownership information Jan. 1, as required by the Corporate Transparency Act. Filing is free and can be completed online through the agency’s electronic filing system.
Companies created or registered to do business in the U.S. before Jan. 1, 2024, must file by Jan. 1, 2025. Companies created or registered to do business in the U.S. in 2024 have 90 calendar days to file after receiving actual or public notice that their company’s creation or registration is effective. BOI reporting is not an annual requirement. A report only needs to be submitted once, unless the filer needs to update or correct information, the agency said.
MBA prepared two general overviews of the new reporting requirements. One document is a brief summary of what the impact will be on banks. The other document is a general summary of the requirements for businesses to help bankers to be able to answer questions from business customers. There are many nuances and details that will require each business to analyze the impact and reporting requirements. FinCEN resources provide details for complicated company structures, and some customers will likely need legal assistance to determine applicability for their business.
A password to MBA’s website is required to view these MBA summaries. As further rules are adopted, these documents will be updated accordingly. They reflect current requirements as of Dec. 5. Please contact Carol Barnett at the MBA if you have any questions.