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So far William Cross has created 54 blog entries.
30 05, 2023


2023-05-30T16:54:05-04:00May 30th, 2023|1- Financial Services Management|

Enforcement Policy

Following a speech earlier this year by the Acting Comptroller arguing that some banks are “too big to manage” and the furor caused by recent failures, the OCC has significantly revised its enforcement policy.  The new framework requires examiners promptly to intervene if any of a bank’s CAMELS scores slips to 3 for unsatisfactory or if the bank is what CFPB Director Chopra would call a “repeat offender” of law, rule, or express supervisory actions or found deficient in practices necessary to ensuring safety and soundness.


23 05, 2023


2023-05-23T17:03:09-04:00May 23rd, 2023|4- GSE Activity Report|

Loathing, Loving, and Leaving LLPAs As Is

Today’s HFSC hearing with Sandra Thompson was the anti-LLPA event we anticipated when it came to Republicans that also saw the stout defense Democrats were sure to provide combined with FHFA’s resolute  stand on doing nothing to change the LLPAs or guarantee-fees beyond what might come of the pending RFI.  More interesting to us were lower-profile exchanges on other pending issues along with the complete absence of anyone on the dais suggesting Congress will ever even pretend to do anything about ending the conservatorships.


18 05, 2023


2023-05-18T16:16:02-04:00May 18th, 2023|5- Client Report|

Federal Regulators Lose Ground as Senate Banking Reviews Recent Failures

Describing the CEOs’ statements at his last hearing as “the dog-ate-my-homework” excuses for grievous failings, Senate Banking Committee Chairman Brown (D-OH) also attacked Republicans for placing blame on monetary policy, not the culture of supervisory laxity he details with various quotes from Trump Administration officials.  Still, the panel’s legislative agenda seems limited to the executive-clawback measure we projected as the most likely outcome immediately after the mid-March failures (see Client Report REFORM218).  Sen. John Kennedy (R-LA) countered that Vice Chairman Barr’s attribution of blame to Randy Quarles is the Fed coming up with a similarly-lame excuse for its recent failings.


9 05, 2023


2023-05-09T11:25:24-04:00May 9th, 2023|5- Client Report|

Fed Frets About Banks, Nonbanks, Hedge Funds

Perhaps because its last financial-stability report (see Client Report SYSTEMIC94) was contradicted  just five months later by a systemic-risk designation, the Federal Reserve’s latest report eschews a conclusion about prospective risk in favor of a review of current concerns.  As noted upon the report’s release, these include a somewhat less effusive view of bank resilience than has characterized prior reports but the Board nonetheless views the banking system as sound and recent failures as essentially idiosyncratic.  The report is, however, concerned with midsized-bank CRE concentrations and the near-term impact of macroeconomic factors and deposit outflows on credit availability, noting as Chairman Powell did last week that this could adversely affect economic growth.


8 05, 2023


2023-05-08T10:10:21-04:00May 8th, 2023|6- Client Memo|

How to End the Sins of Supervisory Omissions and Bail-Out Commissions

The reason the FDIC sold First Republic to JPMorgan is that it didn’t want to do yet another resolution that bailed out uninsured depositors.  The reason the FDIC didn’t want to backstop more uninsured depositors is that it would have had to say First Republic was as systemic as SVB and Signature Bank and this was nowhere near as credible.  The reason the FDIC had to find these two earlier failures systemic was because it couldn’t think of anything better and the reason it couldn’t think of anything better in any of these resolutions is that it was wholly unprepared for them and, now, for any of the others that may come suddenly upon us.  The FDIC must quickly rewrite its resolution playbook, but even a good one won’t work without a new set of triggers for meaningful prompt corrective action that forces change at troubled banks and readies the FDIC for resolution – not bail-out – if change doesn’t come quickly.



1 05, 2023


2023-05-01T15:27:55-04:00May 1st, 2023|5- Client Report|

FedFin Analysis: GAO Slams FRB, FDIC Supervision

Following our analyses of the Fed’s report on SVB (see Client Report REFORM221) and the FDIC’s on SBNY (see Client Report REFORM222), we turn now to one from the General Accountability Office sure to have at least as much impact on bipartisan consideration of what needs next to be done to govern regional banks.  HFSC Chairman McHenry (R-NC) has already cited the GAO report in his rebuttal to those from the banking agencies, and it may well have tempered Senate Banking Chairman Brown’s (D-OH) support of a focus solely on new law and rule.


1 05, 2023


2023-05-01T11:25:10-04:00May 1st, 2023|5- Client Report|

FedFin Assessment:  Fed Contemplates Supervisory Reform, Promises Regulatory Rewrite

In this and subsequent reports, we build on our initial reactions to SVB/SBNY reports from the Fed, FDIC, and GAO, focusing in more depth on the agencies’ plans for near-term action with strategic consequence and key points in the GAO’s report that will strongly influence Hill reactions on both sides of the aisle.  Informed by today’s rescue of First Republic – on which more is to come from us shortly – FedFin starts here with the Fed, not going into detail on the results of its extensive fact-finding unless new facts are likely to influence near-term policy and political response.  As previously noted, the Fed’s report acknowledges serious supervisory shortcomings, with the detailed analysis concluding that the “root cause” of this is “difficult to ascertain, especially given the impact of the pandemic on remote supervision in 2020 and 2021.”



26 04, 2023


2023-04-27T10:27:37-04:00April 26th, 2023|2- Daily Briefing|

Senate Banking Housing Plans Focus on Affordability, Access

At today’s Senate Banking hearing on affordable housing, Chairman Brown (D-OH) framed the committee’s legislative agenda in his opening statement but did not indicate any timing or future action.

CFPB Targets Piggyback-Mortgage Collection

The CFPB today issued guidance on debt collection practices it asserts violate the Fair Debt Collection Practices Act by attempting to collect time-barred debt where the statute of limitations has expired.

Comment Deadline Set For Sweeping FHFA Equitable Housing NPR

The Federal Register today includes FHFA’s NPR codifying Sandra Thompson’s equitable- and fair housing agenda in a body of rule that future directors would find more difficult to reverse and FHFA could enforce with more punitive standards.

HFSC GOP Demands FHFA Reverse LLPA Changes

HFSC Chairman McHenry (R-NC) and Rep. Davidson (R-OH) sent a letter to FHFA Director Thompson today demanding that the agency reverse changes to the GSEs loan level pricing adjustments (LLPAs).

LIBOR Transition Still Too Slow, Agencies Say

The Fed, FDIC, NCUA, OCC, and CFPB along with state bank and state credit union regulators today issued a joint statement reminding supervised institutions that USD LIBOR panels will end on June 30.

FDIC, OCC Deploy UDAP Powers for Targeted Deposit Fees

So far without the Fed, the FDIC and OCC today released supervisory guidance asserting that authorize-positive, settle-negative (ASPN) charges are an unfair practice under UDAAP criteria and present consumer compliance risk.

HFSC GOP Leaders Press Banking Agencies on Digital “Chokepoint” Policy

HFSC Chairman McHenry (R-NC) was …

19 04, 2023


2023-04-19T16:30:09-04:00April 19th, 2023|5- Client Report|

Stablecoin Legislation Faces Long Odds

As we anticipated, the HFSC Digital Asset Subcommittee hearing today on federal stablecoin legislation did not entertain bipartisan expressions of support for the draft noticed with the hearing announcement. Indeed, both Subcommittee Chairman Hill (R-AR) and full committee Ranking Member Waters (D-CA) outlined numerous and often conflicting concerns likely to slow redrafting of a measure Chairman McHenry (R-NC) hopes will remain bipartisan in order to enhance the already-challenging odds of enactment in this Congress. As this report details, significant outstanding issues include the extent to which nonbank stablecoin issuers operate outside the full range of bank-like rules, the risks this presents, how best to address inclusion, and whether there should be federal preemption.


12 04, 2023


2023-04-12T16:47:09-04:00April 12th, 2023|1- Financial Services Management|

Executive-Compensation Clawbacks

Executive compensation incentives have proved among the most important reform priorities in the wake of recent bank failures.  In addition to efforts to complete long-delayed regulations mandated by the Dodd-Frank Act, bipartisan Members are pressing different approaches to clawing back compensation from failed-bank executives who appear to have profited handsomely despite allowing or even encouraging untenable risks.  One major, recent measure would not only grant the FDIC express clawback authority in the wake of non-systemic resolutions, but also expand clawbacks to a wide range of persons affiliated with the failed bank and to holding-company investors. 


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