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Legislation from House and Senate Democrats would force the Federal Reserve quickly to implement mandatory stress testing for all large banking organizations and large nonbanks judged by asset size if they are principally engaged in finance.  The measure attempts to address concerns about climate-risk uncertainties in areas such as data, models, and comparability by convening expert groups. The full report is available to retainer clients. To find out how you can sign up for the service, click here.

The House Financial Services Committee has reported H.R. 4616, a bill designed to prevent the chaos feared when the use of the LIBOR benchmark ceases for legacy contracts that lack language authorizing reliance on an alternative, "fallback" rate.  The measure in no way obviates the obligation U.S. financial institutions have to various regulators to abandon LIBOR where fallback language exists or in new contracts. The full report is available to retainer clients. To find out how you can sign up for the service, click here.

Today's Senate Banking hearing on bank supervision did not include FRB Vice Chairman Quarles, who came before the panel for withering criticism earlier this year (see Client Report REFORM206). Acting Comptroller Hsu, FDIC Chair McWilliams, and NCUA Chairman Harper received a considerably warmer welcome from Democrats, although Ranking Member Toomey (R-PA) blasted the OCC for what he called politicization of bank supervision and urged all the agencies to leave the CRA rulebook as is.  Chairman Brown (D-OH) attacked bank regulation prior to the arrival of the Biden team, by inference continuing his criticism of Chairman Powell's regulatory approach (see Client Report FEDERALRESERVE63).  Under questioning, Mr. Hsu announced that his agency is reviewing overdraft fees; while he did not say in [...]

The banking agencies have proposed sweeping standards that would hold all of the banking organizations they govern responsible for the safety and soundness, consumer compliance, and perhaps even diversity of a wide range of third-party business arrangements that now expressly bring in affiliates, subsidiaries, and parent holding companies along with the full scope of outsourced product and service relationships, marketing partnerships, joint offerings, and even use of a third-party mobile phone platform. Much of what would be required of banks may be feasible within contractual relationships, but the guidance would apply even when there is no exchange between the bank and a third party. The full report is available to retainer clients. To find out how you can sign up [...]