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Two recent developments are sending a message to credit card issuers that the regulatory and political winds are not blowing in their favor.

Rohit Chopra, director of the Consumer Financial Protection Bureau (CFPB), on June 22 issued an advance notice of proposed rulemaking to assess if late fees charged by credit card issuers are “reasonable and proportional,” as required by the Credit Card Accountability Responsibility and Disclosure (CARD) Act.

Chopra’s notice came weeks after longtime card industry adversary Sen. Richard Durbin chaired a Judiciary Committee meeting exploring “excessive interchange fees.” While Durbin advocated for reforms, some of his suggestions would set the industry back by decades, likely ending the ability of small banks and credit unions to offer credit cards and directly harming consumers.

Though the outcome is uncertain, the trajectory is clear. Now is the time for a refresher course on the current rules of the road and for issuers to prepare for any potential changes arising during this period of heightened scrutiny.

While a number of financial institutions remain cautious about cryptocurrency, many use the underlying technology for other purposes.

The up-and-down swings of digital assets, and an uncertain regulatory climate, have kept a fair share of banks and credit unions on the sidelines. At the same time, FIs have shown a willingness to embrace distributed ledger technology (DLT) ahead of the volatile crypto market.

Several initiatives by the Consumer Financial Protection Bureau (CFPB) seem poised to increase competition between traditional financial services providers and fintechs.

An effort to regulate nonbanks has gained support from banks and credit unions. Still, the CFPB’s plan to make it easier for consumers to move accounts will pressure traditional financial institutions to offer more products and better services.

These initiatives are coming when the agency is scrutinizing overdraft and nonsufficient funds (NSF) fees, the CARD Act, and the terms and disclosures of Buy Now, Pay Later (BNPL) offerings – the latter a topic SRM recently wrote a report on.

All signs point to the need for banks and credit unions to buckle up in coming months. These expected changes will likely bring fintech even more into the mainstream and raise the stakes when it comes to recruiting and retaining clients.

In a recent conversation with a Colorado banker about tech strategies, he mentioned a looming investor meeting. He was putting together an overview and was trying to decide the best way to proceed.

"These are the people who provide the underlying support for what we're doing, so I want to make sure they know the road we're on will provide the value they want," he told me.

Financial institutions of all sizes are under pressure to find new revenue sources and solidify their status as customers' trusted financial advisors. One would think FIs would race to participate in a lending category projected to grow significantly in coming years – and one where 70% of consumers indicated in a recent survey that they'd prefer access through their bank.

That isn’t necessarily the case. Surprisingly, a study by IntraFi Network found that 80% of community banks and credit unions have no plans to introduce Buy Now, Pay Later (BNPL) services. A new SRM report details why FIs should closely examine this opportunity – not only as a revenue generator but also to defend current and future business.

Perspective matters when it comes to cryptocurrency.

The demise of the TerraUSD stablecoin has understandably spooked the markets. Any sudden freefall will panic people and make them wonder what’s next.

Investors, and FIs looking to offer crypto services, need to read between the lines and view this crash as an educational opportunity.

Fintech is helping a growing number of banks and credit unions reconfigure the communities they serve.

Historically, financial institutions have focused on clients based on geography, be that a neighborhood or city for banks or a local company or industry for credit union membership. Over time, those boundaries became more fluid as banks entered new markets and credit unions expanded their fields of membership.

Several high-profile banks, including Capital One, Citigroup, Wells Fargo, and Bank of America, have announced plans to either eliminate or dramatically reduce overdraft (OD) and nonsufficient funds (NSF) fees. It could be argued that these banks made this leap before regulators, including the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC), required them to do so.

The prolonged period of taking deposit gathering for granted seems to be nearing an end.

Financial institutions have been awash in deposits for years, flush with liquidity. According to data from the Federal Deposit Insurance Corp, deposit balances at banks have risen by 35% in the past two years alone.

The bigger challenge has been finding ways to put those deposits to use in profitable ways.

The Biden Administration’s Executive Order for digital assets observed that one in six adult Americans are involved with cryptocurrency, while other surveys place this figure closer to one in three. At the same time, a solid majority of Americans indicate they’d prefer to conduct crypto dealings through their financial institution.

This seems like a dream scenario for banks and credit unions looking for opportunities to deepen client relationships and pursue new sources of fee income to replace the overdraft/NSF revenue and interchange that is increasingly under threat.