Oklahoma Bankers Association We make bankers better!
We are officially halfway through the state legislative session.
Bills that survived their house of origin have now crossed the rotunda and will go through the committee process and be eligible for a floor vote should they make it that far.
When the legislative session started, we were tracking over 600 bills – we now have 52 bills on our tracking list. We are also at the point in session that other issues not banking-related garner most of the attention.
As of now the issue stealing all the energy in the building is the mess over at the Oklahoma Department of Mental Health and Substance Abuse services. They seem to be in a financial free fall and will most likely need a significant amount of additional funds in addition to what the legislature plans to appropriate the agency.
If you would like to take a deep dive into this situation, I would encourage you to go to www.nondoc.com for the latest updates.
I usually don’t take jump into issues like this that don’t directly pertain to our industry, but this one might be an issue for us down the road and I’ll address that shortly.
With half the session behind us, the three bills we introduced are still alive and sitting in pretty good shape.
SB 988
This bill moves EFS filings from the secretary of state’s office to dentral filing in Oklahoma County. We haven’t had any group come out opposed to the bill, let alone have any concerns. We are excited for this bill as hopefully our banks and other stakeholders will gain access to real-time data and all the relevant information they need at their fingertips. We will have to make on small change in the House, and once it passes the House, it will have to go back to the Senate for final approval.
SB 1083
This is the bill that puts rules and regulations in place for the crypto/bitcoin ATM industry. OBA General Counsel Scott Thompson put together a one-pager we’ve been sharing with the legislature, and it clearly lays out what we are doing and why. I know for a lot of our bankers, this is a new issue to deal with, but here is all the information from the one-pager so you can be much more informed on the industry and what we are attempting to do.
Currently there are no laws of regulations on the state or federal level that regulate digital asset kiosks.
These kiosks can be used for fraud. A scammer convinces the victim to deposit money into a kiosk to buy cryptocurrency, but the purchase is made into the scammer’s crypto wallet where it is gone forever. The elderly have been particularly victimized by such scams.
The kiosks can also be used to launder cash. Cash is deposited and converted into untraceable cryptocurrency without the anti-money laundering filings that would have been triggered if the cash had been deposited in the bank.
SB 1083 requires:
• Kiosk operators must register as money transmitters with the Oklahoma State Banking Department and provide a list of their kiosks.
• The Attorney General is authorized to file criminal charges against any unlicensed kiosk operator and may direct seizure of any kiosks being operated by an unlicensed operator.
• For a new customer, defined as someone who has been registered with a particular operator for no more than 72 hours, the operator must provide a full refund for any fraudulent loses.
• For a new customer, a daily transaction limit of $2,000 applies.
• For all customers, the operator must refund all fees it receives for a fraudulent transaction.
• In the case of an unlicensed kiosk operator, the customer has a private cause of action for any fraud losses sustained by the customer.
• Very specific warnings of the potential for fraud must be provided conspicuously to the customer and the customer must consent to proceeding with the customer.
• A receipt containing detailed information about the transaction must be provided in paper form or the kiosk operator must provide conspicuous notice to the customer about how to contact the kiosk operator to receive a copy of the receipt.
• Kiosk operators are required to adhere to certain fraud detection and prevention standards.
• Fees that may be charged for transactions at the kiosks is capped.
HB 2745
This is the Oklahoma Rural Lending Act that we have introduced. This bill would allow the bank to deduct the net interest earned on any ag loan made in a community with a population less than 5,000. The bill has passed the House and is waiting to be heard in the Senate.
Earlier, I referenced what is happening with the Oklahoma Department of Mental Health and their financial issues. Our HB 2745 has a fiscal impact of $5 million over a three-year period, and,if passed, it would be an additional cost to the state. While $5 million isn’t a huge amount when looking at a multi-billion budget, we aren’t the only ones that are asking such things from the state.
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It’s been fully busy the last couple of weeks in Washington, D.C., as pro-banking legislation as well as some much need relief from our regulators has started to increase.
A measure to repeal the CFPB’s overdraft final rule passed the full Senate on a party-line vote – hopefully in the next couple of weeks, the full House will do the same and the resolution will be signed by President Trump.
The House Financial Services Committee recently took up several bills that will benefit the banking industry. H.R. 478 is the Promoting New Bank Formation Act, and this bill incentivizes the creation of new banks by establishing a three-year, phase-in period for new banks to comply with federal capital standards, among other provisions designed to promote and sustain de novo banking.
H.R. 1919, the Anti-CBDC Surveillance State Act, was recently introduced in the House Financial Services Committee. This bill would prohibit the Federal Reserve Banks from issuing a retail central bank digital currency directly or indirectly to individuals. It would also prohibit the Federal Reserve Board or the Department of Treasury from issuing a CBDC without congressional approval.
Meanwhile, on March 28, the Federal Reserve, FDIC and OCC announced they intend to rescind the 2023 Community Reinvestment Act final rule. They will instead reinstate the CRA framework that was in place prior to the new rule. In a joint statement, the three banking agencies said, “they will continue to work together to promote a consistent regulatory approach on their implementation of the CRA.” There was no timeline announced as to when they would officially rescind the final rule.
Also, late last month, President Trump signed an executive order that would stop the issuance of paper checks from the Department of Treasury. The intent is to modernize payments by phasing out the use of paper checks to send and receive funds. The order will take effect on Sept. 30.
Things are only going to ramp up in the next couple of weeks as we see the possibility of some stability with our primary regulators. It’s going to be fun, and we’ll make sure that you have all the information that you need to stay informed.