WASHINGTON - (12/09/04) -- A group of prominent lawmakerscalled on the Federal Reserve and financial institutions this weekto make sure that consumers share in the benefits of expeditedfunds availability provided by the new electronic check act, knownas Check 21. In separate letters to Federal Reserve Chairman AlanGreenspan and financial trade groups, including CUNA and NAFC,leaders of the House Financial Services Committee urged that banksand credit unions review the 'hold time' they impose on checks inlight of the new law, lest all of the financial benefits of thereduction in check clearing time accrue to those depositoryinstitutions. "We recognize that check holds are important tools toprevent fraud and to ensure the integrity of the payments system;however, we also believe that the reduction in clearing timesshould result in a corresponding reduction in check hold times,"the group, led by Committee Chairman Michael Oxley of Ohio, wrote.The group urged the Fed to review the effects of Check 21 on thespeed of payments and whether the Fed should amend its Reg CC whichsets hold times for checks. The new law, which establishes legalauthority for electronic checks, is expected to significantlyshorten clearing time for checks, making billions of dollars inadditional interest, or 'float', available for financialinstitutions and consumers.
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The top five banks and thrifts have combined total assets of nearly $13 trillion.
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Many legal experts think the Supreme Court will rule in favor of the Consumer Financial Protection Bureau in a case challenging its funding. Such a ruling would unleash a flurry of litigation that has been on hold pending the outcome of the constitutional challenge.
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Lawmakers including one of the original sponsors of the Corporate Transparency Act have filed an amicus brief in the appeal against an Alabama court ruling that the law is unconstitutional, which would throw into question Treasury's newly-established beneficial ownership structure.
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The Connecticut bank —a regional traditionally regarded as a cautious lender — said nonperforming loans and leases rose 53% year-over-year. The uptick was in mostly the commercial-and-industrial loan space, although there was one nonperforming commercial real estate loan, executives said.
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The two regional banks are anticipating that borrower demand will increase in the back half of the year. High interest rates and economic uncertainty have been muting the appetite for borrowing.
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In a letter to Treasury Secretary Janet Yellen last week, the Massachusetts senator highlighted the growing use of cryptocurrencies by malicious organizations abroad and underscored the need for anti-money-laundering and counterterrorism provisions in future proposals.
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