Trends in 2024: American Bar Association Banking Law Committee Insights

From January 18th to 20th, the American Bar Association’s Banking Law Committee of the Business Law Section held its winter meeting in Washington, DC. This meeting not only provides an excellent retrospective of the previous year’s regulatory developments, but also tends to be a harbinger of what is on deck for the year to come. 

The opening address was given by the former General Counsel of the Federal Reserve Board ("Fed"), Scott Alvarez, and was focused on the issues he saw as being meaningful for 2024. Among those issues, he identified concerns regarding the state of deposit insurance, in light of the large bank failures in 2023 and the use of the systemic risk exception to insure all deposits of those large failed banks. He also discussed the impact an open banking system and real time payments functionality could have on depository institutions. And, finally, a big topic for all regulatory agencies and regulatory lawyers, the possibility that the Chevron standard of deference for agency decisions could be eroded by the Supreme Court’s decision in Chevron v. Natural Resources Defense Council

A panel of regulators from the agencies discussed enforcement priorities and happenings, during which the following observations were made regarding trends that are developing:

The Fed, Office of the Comptroller of the Currency ("OCC"), the Federal Deposit Insurance Corporation ("FDIC") and the National Credit Union Association ("NCUA") all discussed their Rules of Practice updates, effective in April, indicating that practitioners should be prepared to adjust to those changes. And, the Consumer Financial Protection Bureau ("CFPB") identified that in addition to a focus on repeat offenders, they expected their enforcement activities to focus on junk fees, predatory lending and addressing the “surveillance economy” of big data being used to guide financial decisions by institutions.

The centerpiece of the winter meeting of the Banking Law Committee is the opportunity to hear thoughts from the General Counsel of the agencies. These discussions tend to be frank and informative, and to that end, these thoughts on the biggest challenges in our current environment, which were touched upon by each panelist, are useful to reflect upon as we proceed into 2024:

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National Law Review, Volumess XIV, Number 25