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So far Eliza Allen has created 76 blog entries.
23 05, 2022

DAILY052322

2022-05-23T16:39:23-04:00May 23rd, 2022|2- Daily Briefing|

FRB-NY Staff: Mandatory Flood Insurance Harms LMI Households

A New York Fed blog post today points to another important, unintended consequence of well-meaning regulation: the adverse impact of mandatory flood-insurance coverage on LMI households.

FRB Atlanta Staff Bolsters Proposed Cash Acceptance Mandate

blog post today from the Federal Reserve Bank of Atlanta strengthens the case for the mandate for retailer cash acceptance recently approved by the House Financial Services Committee.

Kansas City Fed Finds Persistent Commodity-Market Price Hikes, Volatility

Reflecting concerns in a recent Petrou op-ed, the Federal Reserve Bank of Kansas City today released a report differing from the FOMC’s optimistic inflation forecasts at least as far as they relate to commodities.

HFSC Tackles Disability Rights

Tomorrow’s HFSC Subcommittee on Diversity and Inclusion hearing on disability rights will focus not only on housing access, but also on the extent to which a broad range financial services are easily accessible to persons with disabilities.

Fed Survey Shows Significant LMI Investment in Payment, Investment Crypto

The Fed today released a report on household well-being in 2021, detailing an array of survey findings that generally show Americans feeling remarkably prosperous and satisfied.  The Fed cautions that this may no longer pertain, but the data do suggest what may be more than a passing rebound in economic resilience for at least some families.

Daily052322.pdf

20 05, 2022

DAILY052022

2022-05-20T16:39:03-04:00May 20th, 2022|2- Daily Briefing|

G7 Presses for Global Crypto Action

Preoccupied though it was with Ukraine, the G7 ministerial communiqué advances and hones global work on digital assets.  Most notably, it calls on the FSB to advance and implement comprehensive cryptoasset regulation.  As recent FSB statements indicate, the Board is contemplating its options; this G7 directive may accelerate work into more concrete standards more quickly, stipulating like-kind rules for like-kind activities.  The communiqué also calls global disclosure standards on stablecoin reserve assets and “encourages” jurisdictions to explore CBDC’s “international dimensions.”

Global Regulators Press for Harmonized, DeFi Cross-Border Payments

The BIS and CPMI today issued to papers supporting their work to build out the cross-border payment system advocated by the FSB (see FSM Report PAYMENT23).  The first paper lays out an aspirational global rulebook designed to ensure that all transborder nodes are premised on common standards for finality, certainty, and the other criteria essential to sound payment-system operations.  The second paper takes the concept of legal uniformity into the new arena of decentralized finance, laying out where DeFi might be applicable to cross-border payments with a best-execution DeFi construct, an approach for inter-operability among central banks and private banks, a DeFi utilities for AML/KYC identification, and a small-payment platform.

Daily052022.pdf

19 05, 2022

DAILY051922

2022-05-19T17:20:04-04:00May 19th, 2022|2- Daily Briefing|

BIS Finds New Shadow Crypto Finance, Risks in Spotlight

The BIS yesterday released a paper concluding that, while bank exposures in this high-risk sector are small in aggregate, digital assets nonetheless pose systemic risks.

Commerce Asks About CBDC, Payment System

Following the direction of the President’s digital asset executive order (see Client Report CRYPTO26), the Department of Commerce today released a request for comment on enhancing US competitiveness in  this sector.

Barr Breezes By

Today’s Senate Banking confirmation hearing with Michael Barr showed the Fed vice-chair nominee in careful form likely to assure him confirmation despite strong GOP opposition.

CFPB Tells States to Flex Their Enforcement Muscles

Turning again to actions outside the direct reach of public notice-and-comment requirements, the CFPB today issued an interpretive rule essentially encouraging states to enforce federal consumer-protection standards.

Fed Finalizes FedNow Framework

The Fed today issued a final rule laying out the legal framework governing the FedNow instant payment service it is racing to roll out (see FSM Report PAYMENT20).

Daily051922.pdf

18 05, 2022

DAILY051822

2022-05-18T17:02:28-04:00May 18th, 2022|2- Daily Briefing|

ILC Restrictions Hit Speedbump

The House Financial Services Committee today attempted to markup H.R. 5912 (Garcia, D-IL), a bill that would subject ILCs and their parent companies to BHC regulation (see FSM Report ILC13).  Reflecting concerns about the bill’s grandfather provisions, Rep. Garcia introduced an amendment to the bill that would subject commercial entities looking to acquire an ILC to prior FSOC review.

Barr Highlights Crypto Rules, Equity Ahead of Hearing

Although we will provide clients tomorrow with an in-depth assessment of his confirmation hearing, Michael Barr’s testimony confirms that he will take a different approach to financial regulation than his predecessor, Randy Quarles.  His very brief statement emphasizes the need for innovation to come with regulation and for it to advance fairness.

Bill Requiring Cash Acceptance Reported to House

The House Financial Services Committee today reported H.R. 4395 (Payne, D-NJ), a bill that requires all businesses to accept cash payments for transactions under $2000, by a vote of 32-17.  The panel added an amendment from Rep. Garcia (D-TX) to clarify that only businesses with a physical location are covered.

Daily051822.pdf

17 05, 2022

DAILY051722

2022-05-17T16:44:24-04:00May 17th, 2022|2- Daily Briefing|

Chopra’s Call for FDIC Insurance Revocation Gains Strength

Although Republican Members of Congress last week sharply criticized Rohit Chopra’s suggestion that FDIC coverage be denied banks that violate consumer-protection standards, the proposal has picked up support among at least some Democratic state legislators.

FDIC Advertising Rule Sets New Course for CFPB Fintech Enforcement

The FDIC today finalized its proposal (see FSM Report DEPOSITINSURANCE112) to increase the penalties when advertising or other actions mislead consumers as to the extent to which FDIC insurance covers deposits or deposit-like placements.

SEC Turns to Systemic Standards

In remarks today, SEC Chairman Gensler expanded his campaign against market concentration related to payment-for-order flow to a broader set of systemic-risk concerns due to increased concentration of key securities-market infrastructure activities in a small number of very large firms.

Hsu Sounds Alarm re Risk Concentrations, Consumer Fragility

In remarks today, SEC Chairman Gensler expanded his campaign against market concentration related to payment-for-order flow to a broader set of systemic-risk concerns due to increased concentration of key securities-market infrastructure activities in a small number of very large firms.

Daily051722.pdf

13 05, 2022

DAILY051322

2022-05-13T16:18:40-04:00May 13th, 2022|2- Daily Briefing|

GOP Fuels FDIC Battle With New Letter To Chopra

Following up on their scathing letter yesterday to Acting Comptroller Hsu, leading House Republicans today sent another letter to CFPB Director Rohit Chopra demanding significantly more transparency around the Bureau’s Policy Fellowship Program and accusing the Director of using the Program as a means to circumvent civil service laws.  Signatories of the letter, which include HFSC Ranking Member McHenry (R-NC) along with Reps. Emmer (R-MN), Luetkemeyer (R-MO), and Timmons (R-SC), sharply question Director Chopra over possible favoritism in the Fellow selection process.

Treasury Reiterates Need for Shell-Company Transparency

Treasury today announced its 2022 national illicit-finance strategy, now governing the rest of a year in which Russia-related transactions have assumed far greater importance than when risks underlying this strategy were first identified.  Four priority recommendations emphasize shell companies and all-cash real estate transactions, with the release reiterating Treasury’s first-ever order sanctioning accountants and other service providers related to corporate formation if they support sanctioned individuals or entities.

Daily051322.pdf

12 05, 2022

DAILY051222

2022-05-12T17:18:45-04:00May 12th, 2022|2- Daily Briefing|

Basel Heading Towards Tough New Crypto Standards

In remarks today, Basel Committee Director Pablo Hernández de Cos reiterated that Basel’s latest cryptoasset consultation will be out in “coming months,” going on to say that while global negotiations have yet to resolve various controversies raised in the consultation (see FSM Report CRYPTO19), he emphasized that he is not persuaded by comments urging lenient capital treatment to prevent crypto activity from migrating outside banking.

House Codifies Sanctions for Subsidiaries

The House yesterday passed H.R. 7066, legislation sponsored by Rep. Sherman (D-CA) to tighten secondary sanctions against Russia and its allies.  Approved on a 418-2 vote, the bill stands high odds of inclusion in the omnibus Ukraine and sanctions legislation wending its way through Congress.

GOP Takes on Hsu, Merger Policy

Republicans today made it clear that the blame they directed for what they called the “FDIC coup”, so far directed only to CFPB Director Chopra, has now ensnared Acting Comptroller Hsu.

Daily051222.pdf

11 05, 2022

DAILY051122

2022-05-11T17:19:48-04:00May 11th, 2022|2- Daily Briefing|

HFSC re FSOC: SIFIs, Climate, Stablecoins, Lots More

Looking ahead to tomorrow’s HFSC hearing with Secretary Yellen, the Democratic staff memo suggests that this session will track much of what occurred yesterday at Senate Banking (see Client Report FSOC26): i.e., discussion of the need for stablecoin legislation, the role of SIFI designation, and the overall risks presented by higher inflation, Russia, China, and climate change.

Basel Plans Wholesale Review of Post-GFC Regulatory Regime

The head of the Basel Committee, Pablo Hernández de Cos, today announced a full-scale evaluation of the Basel III construct set for release later this year.  The report will evaluate complexity, regulatory interactions and systemic-risk dynamics, focusing on capital, liquidity, leverage, and macroprudential elements of the Basel III reforms.  The report will also evaluate resilience and financial-activity behavioral incentives.

FSB Plans Commodity, Climate, Crypto Agenda

In remarks today, FSB head Klaas Knot reiterated ongoing concern about commodity markets and continuing financial-market resilience despite stress absorption since Russia first invaded Ukraine.  Mr. Knot is also concerned that some banks are generally over-leveraged and those with prime brokers may be at particular risk.

Daily051122.pdf

10 05, 2022

DAILY051022

2022-05-10T17:07:03-04:00May 10th, 2022|2- Daily Briefing|

HFSC Looks at NSRO Competition, Insurance Ratings

The HFSC Investor Protection Subcommittee hearing on bond markets reopens debate about the credit rating agencies that is unlikely to end in substantive action despite continuing Democratic displeasure with these agencies and the SEC standards mandated for them by the Dodd-Frank Act (see Client Report RATINGS49).

FinCEN Under Still More Beneficial-Ownership Pressure

Picking up on a theme at a recent HFSC hearing, Sens. Warren (D-MA), Grassley (R-IA), and over a dozen bipartisan senators sent a letter to Treasury demanding faster action on stalled beneficial-ownership disclosure rules.  Acknowledging that FinCEN lacks the resources it needs, the senators nonetheless demand action in part to ensure effective anti-Russia sanctions enforcement.

IMF Head Calls for New Global Payment-System Infrastructure

In remarks today, IMF Managing Director Kristalina Georgieva identified financial-market fragmentation  in the wake of Russian sanctions as the threat to the global order also discussed in a recent Petrou op-ed.

Daily051022.pdf

9 05, 2022

DAILY050922

2022-05-09T16:57:42-04:00May 9th, 2022|2- Daily Briefing|

U.S. Adopts Powerful Back-Door Campaign vs. Shell Companies, Trusts

In conjunction with a G-7 statement strongly condemning Russia, Treasury took an innovative move to address shell companies linked to the Russian Federation even as FinCEN’s beneficial-ownership rules remain bogged down.

Hsu Promises Deal-By-Deal Review of Large Regional M&A Pending Broad, Forward-Looking Policy

Citing changes in both U.S. banking and inequality since the last round of merger-policy statements in 1995, Acting Comptroller Hsu today called for a new policy that is neither pro- nor anti-merger but rather determines which larger mergers are “good” transactions so that only risky ones are rejected.

SEC Bows to Critics with Longer Comment Periods

In a significant concession to Congressional Republicans and industry critics, the SEC today extended the comment period for two of its most controversial initiatives.  The deadline for comments on its climate-risk disclosures is moved forward by twenty-eight days to June 17.

CFPB Takes Administrative Action Expanding ECOA Reach, Lender Risk

Living up to its promise on Friday to address structural racism, the CFPB today issued a new advisory extending its fair-lending enforcement scope under the ECOA to all aspects of a credit transaction, not just loan origination or servicing.

Daily050922.pdf

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