Regulatory

On April 14, 2020 BAFT along with the ITFA, the Berne Union, the IACPM, the IUA and Lloyd’s Market Association filed a joint comment letter to policy makers in the European Union regarding the ongoing discussion about facilitating bank lending and the role of credit insurance amid the COVID-19 crisis.

The International Trade and Forfaiting Association (ITFA), the Bankers Association for Finance and Trade (BAFT), the Berne Union, the International Association of Credit Portfolio Managers (IACPM), the International Underwriting Association (IUA) and Lloyd’s Market Association (LMA) follow with great interest and appreciate the ongoing discussion of the policymakers in the European Union about facilitating bank lending amid the COVID-19 crisis. The aforementioned industry representatives believe that when it comes to credit insurance and guarantees, public and private sectors are inextricably connected through their respective complementary roles.

We welcome the initiatives to reconsider the provisioning requirements for loans covered by Export Credit Agencies and other publicly guaranteed loans. This will be a very helpful measure to enable banks to continue the flow of much needed trade finance.

We wish to highlight that the private credit insurance market also provides important support to economic activity within Europe through facilitating bank lending in the same way as public sector Export Credit Agencies. Like Export Credit Agency cover, private credit insurance support a wide range of short, medium and long-term bank lending, including trade-related, asset-backed and corporate loans, for activities across the entire European Union and worldwide.

Read the full Comment Letter in the Library of Documents page under Comment Letters.

On January 21, 2020, BAFT and other industry associations responded to the Consumer Financial Protection Bureau’s Notice of Proposed Rulemaking that would amend the Remittance Rule.

BAFT jointly with The Clearing House, the Consumer Bankers Association, and the American Bankers Association, submitted a comment letter to the US Consumer Financial Protection Bureau (CFPB) supporting it proposed amendments to the remittance rule. The amendments would create two new exceptions—one for exchange rates and one for fees—allowing banks to continue to rely on estimates when providing disclosures to customers. The CFPB proposed the amendments in response to concerns voiced earlier by the banking associations regarding the expiration in July 2020 of the rule’s existing temporary exception.  Also in the joint comment letter, BAFT encouraged the CFPB to make greater use of the rule’s existing permanent country exception, which allows estimation of disclosures for remittance transfers to certain countries where exact amounts can be particularly difficult to determine.  These changes would permit banks to continue to serve the needs of their customers who wish to initiate remittance transfers directly from their depository accounts.

To view the joint letter, visit our Library of Documents under the Comment Letters section.

On January 3, 2020, BAFT responded to the European Commission’s Public Consultation on Implementing the Final Basel III Reforms in the EU.

As the European Union begins the process of developing a Commission proposal to implement the final Basel III reforms ahead of the 2020 deadline, BAFT encouraged the Commission to take into consideration the impact on trade activities and consider utilizing discretion when implementing the Basel III framework. The response to the consultation follows a meeting BAFT held on October 31, 2019 with the European Commission to preview BAFT’s trade finance priorities for the implementation of the final Basel III package.

BAFT’s Europe Council’s Basel working group will remain engaged in the coming months. For further information, please contact Diana Rodriguez, Senior Director of International Policy, at [email protected].

To view the BAFT response visit our Library of Documents under the Comment Letters section.