Despite the progressive fury frequently voiced against Trump Administration bank regulators, today’s HFSC hearing generally went smoothly. This is not to say that Chairwoman Waters (D-CA) and many of her colleagues failed to take the regulators on – quite the contrary. Many positions – e.g., opposition to tailoring, undue deference to big banks, the BB&T/SunTrust merger – all came up. However, the biggest target – and a bipartisan one – was CECL. Although mentioned at yesterday’s Senate session (see Client Report REFORM156), House Members seem more determined to force CECL change or, failing that, to enact a statutory speed bump. The hearing also saw questioning for the first time about the systemic risk tech-platform companies may pose, although the FRB and FDIC demurred on their authority or any plans for action. The OCC’s special-purpose fintech charter (see FSM Report FINTECH20) also came in for harsh criticism, as did any plans by the Fed to own or operate faster retail payments. As discussed in this report, numerous other issues – e.g., FBO tailoring, incentive compensation, national interest rates, international insurance capital standards – were also discussed with varying levels of bipartisanship and commitments by the regulators for action.
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