21 09, 2021

Daily092121

2021-09-21T20:55:34+00:00September 21st, 2021|2- Daily Briefing|

EU Regulators Mark Path to “Platformization” Policy
Advancing work on an issue barely touched in the U.S., the European Banking Authority (EBA) today announced a supervisory agenda aimed at “platformization” – i.e., the increasing integration of finance with technology or other nonbank delivery platforms.

Basel Plans Climate-Risk Consultation, Defers Digitalization Decisions
The Basel Committee today announced that it discussed climate-related financial risks at its recent meetings, now developing a set of climate-risk supervisory practices for consultation later this year.

Hsu Highlights Crypto’s Systemic, Structural, Equality Risks
OCC Acting Comptroller Hsu today picked up the point in Karen Petrou’s recent op-ed: cryptocurrencies may well pose risks to those least able to bear them.

Daily092121.pdf

21 09, 2021

DATA2

2021-09-21T19:34:04+00:00September 21st, 2021|5- Client Report|

HFSC Tackles Consumer Data Ownership

Today’s HFSC Fintech Task Force Hearing featured an appearance by Full Committee Chairwoman Waters (D-CA) arguing against consumer opt-out. Although her statement was focused on privacy given the nature of the hearing, it may have broader implications for other financial services issues, including overdrafts. The hearing also featured bipartisan support for the CFPB’s consumer data ownership ANPR (see FSM Report DATA), with Ranking Member Davidson (R-OH) highlighting the need to read consent narrowly and provide “property rights” for consumers over their financial data. Rep. Davidson indicated that he is also developing a bill to secure those rights.

DATA2.pdf

20 09, 2021

Daiy092021

2021-09-20T21:58:23+00:00September 20th, 2021|2- Daily Briefing|

HFSC Dems Lay Out CFPB Data-Ownership Priorities
Ahead of the HFSC FinTech Task Force consumer-data hearing tomorrow, majority staff’s memo indicates the session is only an update on recent developments such as President Biden’s Executive Order (see Client Report MERGER6) urging the CFPB to expedite its consumer-data ownership ANPR (see FSM Report DATA). R

Gensler Stands by SOFR
SEC Chairman Gary Gensler today reiterated that he has and will raise objections to LIBOR alternatives that fail to meet his standards for market liquidity and rate-setter objectivity.

Daily092021.pdf

20 09, 2021

M092021

2021-09-20T14:57:14+00:00September 20th, 2021|6- Client Memo|

Choosing Between Evisceration, Amputation, or Decapitation to Punish Big Banks

One can pretty much count on senior Democrats to demand summary execution when Wells Fargo stumbles on its troubled path to exoneration from the Fed’s scorching 2018 enforcement order. So, when the OCC last week embarrassed the bank with renewed sanctions, Sen. Warren didn’t miss a beat; as we noted, she promptly sent Jay Powell a letter demanding that the bank be disemboweled. However, if Sen. Warren really wants to ensure that accident-prone banks mend their ways, she would do better by pressing remedies that might really work for the consumers she wants to protect.

M092021.pdf

20 09, 2021

AL092021

2021-09-20T14:53:26+00:00September 20th, 2021|3- This Week|

A Powerful Push Towards a New Securities Regulatory Regime

Last week was an eventful one for U.S. securities regulation both through what was said and even more interestingly left unsaid:

What Was Said:  At his first hearing after confirmation (see Client Report INVESTOR18), SEC Chairman Gensler reiterated his far-reaching agenda, one then met by the increasingly-usual partisan acrimony.  As our client report makes clear, Mr. Gensler stood his ground on hot-button topics such as cryptoasset regulation, payment for order flow, retail-investor protection, climate-risk and human-capital disclosures, incentive compensation, and MMF reform.

AL092021.pdf

20 09, 2021

Karen Petrou: Choosing Between Evisceration, Amputation, or Decapitation to Punish Big Banks

2021-09-20T14:42:28+00:00September 20th, 2021|The Vault|

One can pretty much count on senior Democrats to demand summary execution when Wells Fargo stumbles on its troubled path to exoneration from the Fed’s scorching 2018 enforcement order. So, when the OCC last week embarrassed the bank with renewed sanctions, Sen. Warren didn’t miss a beat; as we noted, she promptly sent Jay Powell a letter demanding that the bank be disemboweled. However, if Sen. Warren really wants to ensure that accident-prone banks mend their ways, she would do better by pressing remedies that might really work for the consumers she wants to protect.

Disembowelment via Sen. Warren would come via regulatory resurrection of the Glass-Steagall Act along her preferred lines. As she explains this in her letter, the Fed would use the authority she believes it has to revoke Wells Fargo’s charter as a financial holding company (FHC), thereby ending the holding company’s ability to engage in both consumer banking and securities activities.

Sen. Warren considers the mix of consumer and capital-markets activities fraught with contagion for vulnerable consumers, but none of the violations that sparked enforcement orders has anything to do with wholesale finance and could well have occurred in the most consumer-pristine of retail banks. For example, the OCC’s latest order punishes what are said to be severe lapses in mortgage servicing. IPO offerings, brokerage services, and even junk-bond sales have diddly to do with mortgage servicing or the cross-selling scandal that brought all this down on the bank in the first place. Thus, divesting capital-markets …

17 09, 2021

AL092021

2021-09-17T20:44:48+00:00September 17th, 2021|3- This Week|

A Powerful Push Towards a New Securities Regulatory Regime

Last week was an eventful one for U.S. securities regulation both through what was said and even more interestingly left unsaid.

AL092021.pdf

17 09, 2021

DAILY091721

2021-09-17T20:33:29+00:00September 17th, 2021|2- Daily Briefing|

Path Paved for Interagency CRA Rule

The Federal Register today includes the OCC’s proposal to replace its controversial Community Reinvestment Act (CRA) rule (see Client Report CRA28) with the 1995 interagency CRA standard until pending inter-agency work on a new regime is complete.

 

Is the SEC Planning a Push-Out Pull Back?

As we noted, SEC Chairman Gensler’s written Senate Banking testimony included a short – but very significant – statement prioritizing Commission review of key fixed-income market sectors.

 

Daily091721.pdf

17 09, 2021

PUSH-OUT14

2021-09-17T16:59:12+00:00September 17th, 2021|5- Client Report|

 Is the SEC Planning a Push-Out Pull Back?
As we noted, SEC Chairman Gensler’s written Senate Banking testimony included a short – but very significant – statement prioritizing Commission review of key fixed-income market sectors. This did not come up at the hearing (see Client Report INVESTOR18), which focused on hot partisan issues such as climate risk and cryptoassets. However, the extent to which the SEC renews efforts to govern fixed-income activities it now thinks too far outside its reach has significant strategic implications, most immediately for large banks that might find key underwriting and capital-markets activities under additional standards and greater enforcement risk. In this report, we assess what Mr. Gensler contemplates for the corporate, muni, and asset-backed securities (ABS) markets, revisiting the “push-out” battles the Commission largely lost over a decade ago to evaluate whether the Fed could or would defend banks again from demands that key activities register with the SEC.

PUSH-OUT14.pdf

17 09, 2021

Daily091721

2021-09-20T14:55:51+00:00September 17th, 2021|2- Daily Briefing|

Path Paved for Interagency CRA Rule
The Federal Register today includes the OCC’s proposal to replace its controversial Community Reinvestment Act (CRA) rule (see Client Report CRA28) with the 1995 interagency CRA standard until pending inter-agency work on a new regime is complete.

Is the SEC Planning a Push-Out Pull Back?
As we noted, SEC Chairman Gensler’s written Senate Banking testimony included a short – but very significant – statement prioritizing Commission review of key fixed-income market sectors.

Daily091721.pdf

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