#beneficial ownership

16 02, 2023

DAILY021623

2023-02-16T16:46:08-05:00February 16th, 2023|2- Daily Briefing|

House GOP Slams Beneficial-Ownership Database

Reiterating longstanding concerns, HFSC Chairman McHenry (R-NC) and National Security, Illicit Finance, and International Financial Institutions Subcommittee Chairman Luetkemeyer (R-MO) submitted a comment letter today strongly opposing FinCEN’s latest beneficial ownership NPR.

House GOP Decries SEC Crypto-Custody Construct

Reflecting GOP concerns about the SEC’s new custody proposal as well as broad GOP objections to much of what Chairman Gensler does, HFSC Republicans today tweeted that the proposal will not ensure sufficient investor safeguards in part because restrictions on bank custody services remain.

Biden Order Reasserts Racial-Equity Agenda

Reiterating much of his last racial-equity executive order, President Biden today issued an order directing federal agencies to establish equity teams and comprehensive strategies to implement the order’s new equity initiatives.

FSB Pledges Further Work on DeFi Financial-Stability Risks

The FSB today released a report finding that DeFi’s financial stability risks are limited but may grow should linkages increase to traditional finance.

CFPB: Unfair Credit-Card Competition Evident Via Data Suppression

Following strongly-worded letters to six credit card lenders last May, the CFPB today concluded that these companies have suppressed payment data for competitive purposes.

FHFA Floats Single-Family ESG Bonds

Building on its equitable-finance initiative, FHFA today released a request for input on the benefits and risks of Fannie and Freddie single family social bonds.

Daily021623.pdf

17 01, 2023

DAILY011723

2023-01-17T17:03:48-05:00January 17th, 2023|2- Daily Briefing|

FinCEN Opens Beneficial-Ownership Reports to Public Comment

Likely furthering its effort to garner greater public buy-in for its beneficial ownership information (BOI) standards, FinCEN is now requesting public comment on these reports.

CFPB Presses Consumers, Employees to Action

In a post today, the CFPB double-downed on its recent precedent-setting enforcement action against Wells Fargo (see Client Report CONSUMER46).

Breaking Up Won’t Be Hard to Do

In a high-impact speech today, Acting Comptroller Hsu expressly threatens that the OCC will not stop at the kind of growth restrictions imposed on Wells Fargo (see Client Report CORPGOV26) or the CFPB’s fines (see Client Report CONSUMER46) if a large bank is a repeat offender in safety-and-soundness arenas.

Fed Begins Big-Bank Physical/Transition Financial Climate Risk Analysis

The Fed today announced a two module structure for its upcoming GSIB pilot climate scenario analysis,  kicking off a process to identify the data, governance, and processes banks need to manage the financial risks related to physical and transition climate events.

Daily011723.pdf

15 12, 2022

DAILY121522

2022-12-15T17:13:08-05:00December 15th, 2022|2- Daily Briefing|

FinCEN Advances Beneficial-Ownership Privacy Constraints

Following its finalization of the beneficial ownership reporting rule, FinCEN today issued a notice of proposed rulemaking that would clarify how beneficial ownership information (BOI) must be acquired, used, and stored.  The proposal limits BOI access to only federal national security agencies, law enforcement authorities with a court order, financial institutions with customer due diligence requirements, and certain foreign and Treasury officials, all of which are subject to stringent security protocols aligned with the scope of the information request.

Chopra Defends Nonbank Repeat-Offender Registry, Confirms Zelle Watch-and-Wait

Today’s Senate Banking hearing repeated much of what HFSC and Director Chopra said yesterday (see Client Report CONSUMER45), with Democrats lauding the Bureau and Republicans condemning it for politicization, poor administrative process, and an unconstitutional construct. Ranking Member Toomey (R-PA) grilled Director Chopra on the Bureau’s new proposal requiring certain nonbank financial firms to report enforcement actions, asking him what he would do if a nonbank said it was compliant with a consent order and the CFPB disagreed.

Comment Deadline Extended For Controversial DSIB-Resolution Standards

Reflecting continuing controversy, the Federal Reserve Board and FDIC today announced that they will extend by one month the comment deadline for their ANPR on large bank resolvability standards.  The former deadline was December 23; the new deadline is January 23.

Daily121522.pdf

30 09, 2022

DAILY093022

2022-10-03T13:40:26-04:00September 30th, 2022|2- Daily Briefing|

Brainard Acknowledges Risk But Sticks to Policy Guns

Responding to acute concerns that Fed policy will shatter global financial stability, Fed Vice Chair Brainard today emphasized her longstanding and once-isolated view that monetary policy must consider financial stability.

Global Standard-Setters Turn to Clearing Margin, Liquidity

The Basel Committee, IOSCO, and CPMI issued the first substantive response to the FSB’s decision to target margining practices following its review of the 2020 financial crisis and the need to address nonbank financial intermediation (see Client Report NBFI).

HFSC Republicans Denounce Beneficial Ownership Rule

HFSC Ranking Member McHenry (R-NC) and Rep. Luetkemeyer (R-MO) released a statement today sharply criticizing FinCEN’s beneficial ownership final rule as overly broad and complex.

Basel Concludes High Capital Compatible with Sustained Profitability

The Basel Committee today released its latest report on bank capitalization, finding that profitability remains robust despite capital ratios increasing to the highest level since the beginning of the exercise in 2012.

Bowman Comes Out Swinging on New, Costly Big-Bank Rules

Following a speech earlier this week largely siding with banks on merger policy, FRB Gov. Bowman today agreed with assertions from bank CEOs (see Client Report REFORM213) and others that the largest U.S. banks are now well capitalized as judged by ratios and effective stress testing.

FRB/FDIC Turn to Regional Resolvability

The Fed and FDIC today announced that they will shortly propose resolution guidance for most regional banks.

Daily093022.pdf

10 05, 2022

DAILY051022

2023-02-21T15:41:13-05:00May 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

28 04, 2022

Daily042822

2023-03-01T14:51:33-05:00April 28th, 2022|2- Daily Briefing|

FinCEN Head Pleads for Funding to Advance Rulemaking, Sanctions

Acting Director of FinCEN Himamauli Das testified at a poorly attended HFSC hearing today, calling for more funding to handle not only the challenges created by the invasion of Ukraine, but also the many standards required by the 2021 AML Act (see FSM Report AML133).  Under questioning, Mr. Das agreed that the agency is falling behind on the beneficial ownership rules, promising to do better as quickly as resources will allow.

Fraudulent-Authorization Payment Bill Advances

At today’s HFSC’s Task Force on Financial Technology hearing, Chair Lynch (D-MA) advanced draft legislation stipulating bank accountability for fraudulent authorizations under the Electronic Funds Transfer Act. This measure builds on complaints voiced earlier this week detailed by Sens. Warren (D-MA) and Menendez (D-NJ) attacking Zelle, with Rep. Lynch saying that protecting consumers is an immediate priority.

Daily042822.pdf

8 02, 2022

Daily020822

2023-04-05T11:47:05-04:00February 8th, 2022|2- Daily Briefing|

Fed Study Attempts to Address Scope of U.S. Macroprudential Risk
Building on prior FRB research on the increasingly porous regulatory perimeter, a new FRB staff study crafts quantitative measures of the U.S. financial system to assess growing macroprudential risk.  In contrast to the relatively-sanguine view of asset prices in the Fed’s most recent stability report (see Client Report SYSTEMIC92), the study finds that cyclical credit flows into unregulated institutions are a leading indicator of systemic risk.

FRB-NY: Stablecoins Won’t Last
The Federal Reserve Bank of New York yesterday posted a paper concluding that stablecoins are not likely to prove a lasting part of the U.S. financial system.  We will shortly provide clients with an in-depth analysis of today’s HFSC hearing; the staff memo preceding it clearly takes a different stand, as did the PWG’s report (see Client Report CRYPTO21).

Democrats Detail Beneficial-Ownership Regulatory Standards
Sen. Brown (D-OH) and Reps. Waters (D-CA) and Maloney (D-NY) late yesterday released their comment letter to Secretary Yellen on FinCEN’s initial beneficial-ownership standards.  The letter generally praises the proposal, including its broad beneficial-owner definition and those for “substantial control,” “ownership interest,” and “reporting company.”

Basel Chief Pleads for Tough III/IV Standards
The Basel Committee’s new chair, Pablo Hernández de Cos, today told the European Parliament that jurisdictions must quickly finalize the Basel III/IV package of capital reforms.  As noted yesterday, Acting FDIC Chairman Gruenberg included these in his near-term priorities, departing from prior FDIC and Fed statements by …

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