Max Camateros-Mann

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So far Max Camateros-Mann has created 37 blog entries.
25 01, 2023

CONSUMER49

2023-01-25T10:04:03-05:00January 25th, 2023|1- Financial Services Management|

Negative Option Marketing

Using one of its controversial edicts to set what some consider a new rule, the CFPB has opined that negative-option or “subscription” marketing of consumer-financial products or services may be unfair, deceptive, or abusive (UDAAP) and thus subject to significant sanction for both the provider and any third parties with which it works.  Although the circular does not prohibit negative-option marketing, these sanctions and the sometimes-vague nature of stipulated safeguards may lead some financial companies simply to eschew subscription marketing.  The circular is unclear as to the extent of a financial company’s liability for supporting sales via a third-party vendor whose practices fall short of CFPB expectations.

CONSUMER49.pdf

17 01, 2023

m011723

2023-01-17T16:53:14-05:00January 17th, 2023|6- Client Memo|

How FHLBs Miss the Mission, Heighten Financial Risk

Recent revelations about the Federal Home Loan Bank System have made it still more imperative to address whether at least $1 trillion of implicitly-guaranteed federal debt should be authorized to feather the FHLBs’ pockets instead of furthering public welfare.

m011723.pdf

9 01, 2023

m010923

2023-01-09T09:24:52-05:00January 9th, 2023|6- Client Memo|

Is Silvergate solvent?

Is Silvergate solvent?  Media coverage suggests it can stay in business based on the crypto bank’s liquidity.  Liquidity is, though, only a necessary condition for a bank to survive.  For it actually to remain in business, a bank must also be solvent.  For Silvergate and several other crypto-heavy banks this won’t be easy.

m010923.pdf

6 01, 2023

CRYPTO37

2023-01-06T10:24:38-05:00January 6th, 2023|1- Financial Services Management|

Bank Crypto Safety-and-Soundness Standards

The Basel Committee has finalized its second try at global standards governing bank cryptoasset exposures, laying out a path that U.S. agencies plan quickly to implement even as Congress continues to wrestle with this fast-changing sector.  In general, the final Basel approach allows banks both to undertake cryptoasset activities and hold exposures in this sector.  However, the conditions applied to all but the most straightforward digital assets issued by regulated entities and to all stablecoins are extensive and costly.  These are likely to dampen bank exposures and thus contribute to the small amount of crypto interconnectedness that regulators believe was the reason that recent crypto meltdowns posed no systemic risk.

CRYPTO37.pdf

5 01, 2023

GSE-010523a

2023-01-05T12:35:32-05:00January 5th, 2023|4- GSE Activity Report|

Is the Price Still Right?

FHFA’s latest scorecard for Fannie, Freddie, and CSS reiterates Director Thompson’s overarching objectives for Fannie and Freddie in the new era of equitable finance, CRT, and capital compliance.  However, it differs from 2022 in that it has a greater focus on climate risk both through affordable housing programs and new risk management protocols.

GSE-010523a.pdf

3 01, 2023

m010323

2023-01-03T16:02:09-05:00January 3rd, 2023|6- Client Memo|

Why Congress will Try to Recapture Fed Payments  to Banks in 2023 and Why It Can’t

Among the unmourned victims of 2022 is to be found modern monetary theory.  Although it seemed clear from the start that MMT was a product of magical thinking, it engendered insouciance that kept fiscal deficits rising ever higher. Now, Republicans will press for fiscal austerity.  Democrats will fight back, but they too will seek as much fiscal constraint as compatible with gaining power in 2024.  Congress thus will look for new revenue sources that aren’t taxes and quickly find one at the Fed on which both sides agree: cutting payments to the nation’s biggest financial institutions.

m010323.pdf

3 01, 2023

DEPOSITINSURANCE117

2023-01-03T10:15:13-05:00January 3rd, 2023|1- Financial Services Management|

FDIC Coverage Protections

In the wake of increasing instances in which customers are confused and even misled about the extent to which fintech and cryptoasset holdings are insured deposits, the FDIC is proposing new standards addressing this problem as well as ways to modernize IDI representations of their own FDIC-insured offerings in branches and through the fast-changing array of retail banking delivery channels.  The last time these signage standards were updated beyond a generic FDIC 2022 rule barring misrepresentation was 2007, a time of course well before digital finance took off.  Now, new signage, displays, or postings would need to clearly, conspicuously, and continuously advise retail customers when funds are FDIC insured and that FDIC insurance does not cover offerings in the facilities that would now be segregated from where insured deposit are receipt to accept non-deposit funding.

DEPOSITINSURANCE117.pdf

30 12, 2022

Al010223

2022-12-30T12:27:06-05:00December 30th, 2022|3- This Week|

Warming up for 2023

The last thing another pandemic-saddled holiday season needed was a nation-wide winter weather event and major airline cataclysm, but a year that brought us the Ukraine war and inflation levels not seen since the 1980’s was sure to sign off with a bit of chaos.  We hope you were still able to celebrate and aren’t missing any luggage.  Despite it all, global and U.S. financial regulators advanced many significant issues through the holidays.  To help you catch up, here’s a round-up of what we sent over the past two weeks sure to come immediately into focus as critical issues advance:

Al010223.pdf

14 12, 2022

CONSUMER45

2022-12-15T17:14:06-05:00December 14th, 2022|5- Client Report|

HFSC GOP Sets Table for Rocky CFPB Relationship

Despite early warm goodbyes to outgoing Chairwoman Waters (D-CA), GOP members wasted no time trading blows at a fiery HFSC session today with CFPB Director Chopra.  As anticipated, incoming Chair McHenry (R-NC) and committee Republicans focused their efforts on what they call “regulation by guidance,” accusing the Director of trying to influence the behavior of firms through nonbinding releases and avoiding the public rulemaking process.  In his testimony and answers to members, Director Chopra said that the Bureau is watching voluntary industry action on Zelle fraud before taking action and is more broadly focused on payment-system standards that ensure neutrality and strict data-privacy.  Republican members also highlighted how the Bureau’s proposed small-business reports (see FSM Report SMBUS27) put undue regulatory burden on small banks.  Additionally, Rep. Loudermilk (R-GA) inquired about the appropriateness of making banks liable for P2P fraud.  Democrats refrained from questioning the Bureau’s actions, instead asking about its bigtech inquiry, the resurgence of ARMs, and blackbox algorithms.  Reps. Cleaver (D-OH) and Vargas (D-CA) also continued their attacks on crypto from yesterday’s hearing, calling it dangerous and useless.

CONSUMER45.pdf

2 12, 2022

AL120522

2022-12-06T11:23:10-05:00December 2nd, 2022|3- This Week|

The CFTC Showdown

As our in-depth client report described (see Client Report CRYPTO35), CFTC Chairman Rostin Behnam stoutly insisted that the Commission not only couldn’t have averted FTX’s collapse, but also that it did it all it could within the strict limitations of its authority.  What he needed, he said, was more power and, to at least some extent, bipartisan senators on the Senate Agriculture Committee concurred.  Those who had worked closely with FTX and the CFTC may have felt they had little choice but to join the CFTC in doubling-down in support of S.4760, the Digital Commodities Consumer Protection Act.  This is a bill we previously noted would not stand unnoticed and uncriticized by the Biden Administration, Banking Committee, and progressives calling for stringent crypto standards.

AL120522.pdf

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