Kiss our Card Rewards Goodbye

So with the recent Dodd Frank Bill regarding interchange and credit cards, a recent 2011 bank survey conducted by the American Bankers Association (ABA) showed that 81% of banks are interested in the proposal to cut debit card reward programs tied with their interest in increasing current checking account maintenance fees. At the end of the day banks are looking at interesting ways to recapture the lost fee income during the past regulations passed.

Savvy Little ATM Skimming Thieves

ATM skimming is not a new phenomena among bank fraud but this newly discovered method is. When I worked in retail banking the idea of providing limited access to bank customers to the ATM front lobby area during afterhours seemed like a great idea to provide security. I would feel much safer in the confides of an ATM room with me. Myself, and I withdrawing or depositing into an ATM. Well, this sense of security has just been broken.

Now thieves are rigging the card access swipe device outside these doors with a skimmer device. The attackers then place a hidden camera just above the key pad and record the PIN of the customer. These thieves return hours or days later and like a movie editor play back the video’s to match up the card number and pin numbers of the suspect customer. This discovery was unlatched after a California police officers discovered the scheme in July 2009. Click the link below to learn more about these savvy skimming thieves. Word of advice always cover your pin entry hand or fingers.

http://krebsonsecurity.com/2011/01/atm-skimmers-that-never-touch-the-atm/

Why Incentivizing Non U.S. EMV Merchants could hold the U.S. Back

The EMV (Europay, Mastercard and Visa) the global standard of integrated circuit cards provides Incentives but for merchants outside of the United States. So what is the U.S. doing to promote enhanced cryptographic securities towards dynamic data authentication? According to Eduardo Perez, CFA and head of Visa’s global payment system security, the U.S. is looking into more future technologies such as contactless and mobile payment systems. So the dulling hand involves political stakeholders to determine encryption rights while determine the flexibility. So does this mean we in the U.S. are going to run in a physical dollar less society? Click here to learn more about EMV

http://www.bankinfosecurity.com/articles.php?art_id=3351

http://www.bankinfosecurity.com/podcasts.php?podcastID=933

http://en.wikipedia.org/wiki/EMV

Dodd-Frank and the FDICs bank executive pay structure update

So last month I briefly wrote about the FDICs discussing the regulation of bank executive pay structures. This issue, known as section 956 of the Dodd-Frank Act while still pending approval by different federal members; FFIEC, SEC, and FHA aims to require any depository institutions with assets greater than $1 billion to file an annual report that details the structure of their incentive compensation plans. While institutions over $50 billion have to provide policies for their executives as well as any individuals who have to ability to expose the institution to possible losses related to the size, capital, and/or overall risk tolerance. Along with these restrictions the rule is requiring that at least 50% of the incentive-based pay be deferred for at least three years. So as a stockholder of several financial institutions I’ll be looking forward to their annual reports depicting the new rule if passed. Click here to read more about this regulation.

http://regreformtracker.aba.com/2011/02/fdic-issues-exec-comp-rules-for.html?utm_source=regreformtracker&utm_medium=ABA+Dodd-Frank+Tracker

Banks are on Cloud Nine

Banks are beginning to tinkle with the idea of cloud computing however water treading like a marine in formation. Because of the uncertainties of data breach and security vulnerabilities banks are turning to vendors for best practices. Such an environment was completed by Bank of Oklahoma during their sales management implementation for its banking, wealth management, and operational group. The arrangement with the outside sales vendor Salesforce.com allows the bank to develop its own customized dashboards allowing for quick delegation of new opportunities, trends and metrics across the bank’s employees. Follow the link to learn more about this topic:

http://www.bai.org/BANKINGSTRATEGIES/operations-and-technology/technology-and-information/head-in-the-clouds-feet-on-the-ground?utm_source=BSO_Daily_020211&utm_medium=email&utm_campaign=BSO_Daily_Enewsletter&utm_content=BAIfeature

The Reminisces of Marked to Market

FASB recently approved plans to proceed with an accounting model whereby loans and debt securities that are held as “customer financing activities of a bank” to be recorded at amortized costs in response to the massive opposition of bankers and investors. However, question still remain as what will be the ultimate impact to the bank’s financial statements. For example currently classified securities as HTM (held to maturity) could be subject to MTM (mark to market) and determining the exact definition of “customer financing activities” is still up to FASB to decide. So it deals with managing credit risk rather than ALM (asset liability management) topic but what do they in the event of a deep dive on valuation while managing the credit? This line in the sand needs to be addresses clearly by FASB and I’m sure they will. Follow the link to learn more about this topic:

http://www.aba.com/Press+Room/051409MTMLettertoCongress.htm

Is FASB & IASB too late to deliver their New Impairment Punch?

Both FASB (Financial Accounting Standards Board) and IASB (International Accounting Standards Board) requested input on their new common impairment model that is based on recording “expected losses” as opposed to the current “incurred losses.” However, this approach only applies to loans evaluated within a portfolio rather than individually. The results could be a double whammy on banks as banks should expect significantly higher ALLL (allowances for loan and lease losses) in addition to the BASEL III higher capital requirements thus meaning little lending capacity. Follow the link to learn more about what the American Bankers Association has posted:

http://www.aba.com/Industry+Issues/IASB_FASIssues.htm