Weekly 10-Q: Check cashing fees are getting an overhaul from New York’s financial regulator

Last week, we covered: Things did not go Goldman Sachs’ way in Q4’22

Check cashing fees are getting an overhaul from New York's financial regulator

Superintendent of Financial Services Adrienne A. Harris announced that the New York State Department of Financial Services is putting into practice an updated check cashing regulation following the proposed regulation announced in June last year.

The new rules revamp processes that had been in place since 2005. Fee increases had been granted on an annual, automatic basis using the Consumer Price Index (CPI), a measure of inflation -- which wasn't a part of the method back in 2005.

The agency affirmed that the previous approach did not, and does not, take into account the “disproportionate impact inflation has” on state residents using check cashing services. If wages were not rising but the CPI rose, customers would have to weather the significant impacts of the higher fees and higher cost of living.

The new regulation will do away with the annual, automatic increases based on CPI. Similar to the approach of many other states, the regulation creates two tiers of fees for check cashers. The maximum fee that any check casher can charge for a public assistance check issued by a federal or state agency is 1.5%. This includes checks for social security, unemployment, emergency relief, veteran benefits, and more. For all other checks, the maximum fee that any check casher can charge is 2.2% or $1, whichever is greater.

The regulation is not applicable to commercial checks, which are exempt from statutory fee limits, or fees generated from other services that check cashers often provide including wire transfers, bill payments, and lottery tickets.

Top stories of the week

AMAZON
Amazon and Stripe are on their way to strengthening their partnership
Under an expanded global agreement, Amazon and Stripe plan to expand in the U.S., Europe, and Canada. In the new partnership, Stripe will expand its use of Amazon Web Services, which has served as Stripe’s cloud infrastructure provider, to operate and grow its business of catering to internet-based companies worldwide. The partnership history between the two companies dates back to 2017 when Amazon first tapped into Stripe to extend its then e-commerce business into Europe and Asia. (Insider Intelligence)

CAPITAL ONE
Capital One's Q4'22 earnings turned out to be a mixed bag
Capital One announced its Q4'22 earnings result last Tuesday. The firm reported a net income of $1.2 billion, or $3.03 per diluted common share, compared with a net income of $1.7 billion, or $4.20 per diluted common share in Q3 2022, and with net income of $2.4 billion, or $5.41 per diluted common share in Q4 2021. Analysts polled by StreetAccount expected a profit of $3.87 per share on revenue of $9.07 billion. Adjusted net income for the Q4 2022 was $2.82 per diluted common share. Net interest income also came in below expectations. The financial stock dropped 2.3% after Capital One reported below-expectations quarterly results. (Yahoo)

More than 1,000 tech roles slashed at Capital One
Capital One is the latest FI to cut jobs, with 1,100 staff in its agile development team to be released. The job chops come as the bank braces itself to readjust amid gloomy economic forecasts. The bank considers this move essential to get the company’s digital transformation started, but now the work will be integrated into “core” IT roles by hiring tech professionals with cloud, data, machine learning, and cyber security skills. The bank said this would help it deliver on the next phase of its tech transformation. (Bloomberg)

CFPB
The CFPB wants to hear about people’s experiences with credit card products
The Consumer Financial Protection Bureau issued a request for information seeking public feedback on how the consumer credit market is functioning as part of the review of the industry every two years and report to Congress. The Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) enacted by Congress mandates the CFPB to undertake a comprehensive review of the entire industry to help determine whether regulatory adjustments are needed. This is done to establish fair and transparent practices related to the extension of credit in the credit card market. (PYMNTS)

JPMORGAN CHASE
No 'special award' for Jamie Dimon this year
The declining economy has pushed investors to call for lower executive pay -- feeling the heat, some firms and their boards have given consent to this move. JPMorgan Chase CEO Jamie Dimon is the latest entrant in this league who will take home the same base pay in 2023 as he did in the previous year, and get no additional “special award.” He’ll receive total compensation of $34.5 million — a $1.5 million salary plus a bonus of $33 million, the bank confirmed in regulatory filings recently. (MarketWatch)

MARQETA
Marqeta's new web provisioning product aims to bolster mobile wallet use
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PAYPAL
PayPal and Bold Commerce partner to unite payments and commerce
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UPSTART
Upstart is unlocking the ‘omnichannel car buying’ experience
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ROBINHOOD
Robinhood's Twitter and other social media profiles got compromised
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Tweet of the week

Chart of the week

In the general-purpose category of digital wallets, PayPal is the most popular by far

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