OCC Extends Comment Period for Proposed Rulemaking and Policy Statement on Bank Mergers

Regulatory Developments

OCC Extends Comment Period for Proposed Rulemaking and Policy Statement on Bank Mergers
On April 10, the OCC extended the comment period for the proposed rule titled “Business Combinations under the Bank Merger Act” (the Proposed Rule) until June 15, 2024 to allow interested parties more time to provide comments. Under the Proposed Rule, the OCC would amend the procedures for reviewing business combinations involving national banks and federal savings associations and add, as an appendix, a policy statement summarizing the principles the OCC uses when it reviews proposed bank merger transactions under the Bank Merger Act.

CFPB Releases Spring 2024 Issue of Supervisory Highlights
On April 8, the CFPB released its Spring 2024 issue of Supervisory Highlights, covering supervisory findings from the first three months of 2024 with a focus on violations of the FCRA and Regulation V. The CFPB reported that consumer reporting companies (CRCs) lacked adequate safeguards to ensure the accuracy of information they obtain about consumers and routinely failed to block information resulting from identity theft or human trafficking, even after being notified by consumers. The CFPB found that furnishers similarly failed to ensure the accuracy of information they collected on consumers, in some cases relaying information to CRCs that the furnisher knew to be false or inaccurate, failed to remove information resulting from identity theft, and failed to conduct reasonable investigations in response to consumer disputes. The CFPB required CRCs and furnishers to take corrective action, including conducting lookbacks and enhancing compliance procedures, and warned that the CFPB will be monitoring proactively for issues in this space.

CFPB Report Identifies Financial and Privacy Risks to Consumers in Video Gaming Marketplaces
On April 4, the CFPB released a report on banking in video games and virtual worlds, noting an increase in recent years in the storing and exchanging of gaming assets to obtain goods, services, or currency. The CFPB’s report made three key findings:

1. Gaming products and services resemble conventional financial products, as the virtual worlds allow players to store and transfer valuable assets in marketplaces;
2. Gaming companies are not assisting customers when a customer experiences financial harm within the virtual worlds, such as scams, phishing attempts, or account thefts; and
3. Gaming companies are collecting gamers’ personal and behavioral data, the sale of which can harm gamers.

The CFPB advised that it will continue to monitor markets where financial products and services may be offered, like in video games and virtual worlds, as the agency receives an increasing number of consumer complaints concerning gaming assets.

“As more banking and payments activity takes place in video games and virtual worlds, the CFPB is looking at ways to protect consumers from fraud and scams.”
‒ Rohit Chopra, Director, CFPB

FDIC Releases Comprehensive Report on Orderly Resolution of Global Systemically Important Banking Organizations
On April 10, the FDIC released a report outlining how it might resolve of a large, complex financial company under the orderly liquidation authority of Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), while seeking to achieve the twin aims of promoting financial stability and preventing taxpayer bailouts. The report focuses on how the FDIC might pursue the resolution of a US GSIB using a Single Point of Entry (SPOE) resolution strategy, in which the parent company “is placed into resolution, with its subsidiaries remaining open and operating while the group undergoes restructuring…[in an effort] to limit disruption and mitigate systemic risk by maintaining the continuity of the failed institution’s critical operations and material subsidiaries.” While focused on the resolution of a US GSIB, FDIC Chairman Gruenberg’s introductory comments note that the FDIC’s approach outlined in the report would be relevant in resolving other systemically important financial companies.  The report also provides information on the FDIC’s legal authorities and reviews reforms implemented since the adoption of the Dodd-Frank Act to improve the resolvability of US GSIBs. 

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