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

  • 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.
  • And, feeling the heat of the economic downturn, JPMorgan's board has decided that CEO Jamie Dimon will take home the same base pay in 2023 as he did last year -- with no special award or bonus.

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

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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 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'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)

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)

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's new web provisioning product aims to bolster mobile wallet use

Marqeta launched its new web push provisioning product. With the new upgrade, Marqeta customers can reduce friction at the point of sale and enable their users to pay directly from their mobile wallets without requiring them to download a mobile application. This capability addresses a common pain point for consumers – the friction of having to download an app that may rarely be used in order to complete a transaction – likely improving conversion rates and creating a smoother customer experience. (Finextra)

PayPal and Bold Commerce partner to unite payments and commerce

PayPal has launched a new integration with eCommerce tech firm Bold Commerce. PayPal is working with Bold Commerce to bring payments and commerce together as the fintech company moves into the growing headless commerce market. The integration will let brands and retailers use Bold Commerce’s suite with PayPal’s commerce platform to launch sales beyond their websites and accept payment options that include PayPal and Venmo, PayPal’s pay later tools, and credit and debit cards. (American Banker)

Upstart is unlocking the ‘omnichannel car buying’ experience

Artificial intelligence (AI) lending marketplace, Upstart will add two new applications to its Auto Retail platform – Digital Finance and Online Sales – to offer dealerships a smooth online to in-store car-buying experience, from search to signing. Upstart showcased the applications at the National Automobile Dealers Association Show (NADA) in Dallas, Texas, Jan. 26-29. Upstart Auto Retail combines online and in-store digital retail capabilities with financing and manager tools to help dealerships create an omnichannel car-buying experience. Both applications can be customized to a dealership’s existing software solutions or workflows. (PYMNTS)

Robinhood's Twitter and other social media profiles got compromised

Cybercriminals hacked the Twitter account of the Robinhood exchange last Wednesday. The tweet was used to promote a scam offering crypto tokens and NFTs on the Binance Smart Chain through the PancakeSwap decentralized exchange. Robinhood's other social media profiles were also compromised. The platform confirmed that it removed the unauthorized posts from its Twitter, Instagram, and Facebook accounts within minutes -- however, the scammers were able to make off with 26.95 BNB tokens, around $8,200. Binance CEO Changpeng CZ Zhao confirmed that the account had been locked pending further investigation. (CoinDesk)

Tweet of the week

Source: Nancy Pelosi Stock Tracker

Chart of the week

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

Source: The Financial Brand

What's trending

  • Embedded finance in ‘first inning’ of payments evolution, says FIS (PYMNTS)
  • U.S. Bancorp sees big opportunity in California after Union Bank deal (American Banker)
  • Circle blames SEC for the collapse of $9 billion SPAC (FT)
  • The new venture capitalists: How community banks are fueling the growth of fintech (Forbes)
  • Mastercard and ZoodPay to launch the first-of-its-kind prepaid virtual BNPL card in Eastern Europe, Middle East, and Africa (EEMEA) region for the underbanked population (PYMNTS)

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