As promised, this report provides an in-depth analysis of Treasury’s report and resulting recommendations to the President’s Competition Council on the impact of new nonbank consumer-finance entrants from a competition, consumer-protection, and financial-stability perspective. Although the report calls for reconsideration of bank-merger policy with an eye to the growing role of fintechs and bigtechs, its overall view of market power fails in our view to capture the actual landscape in which…
Treasury Plumbs the Depth of Nonbank Finance, Seeks New Merger Policy, Rules
As promised, this report provides an in-depth analysis of Treasury’s report and resulting recommendations to the President’s Competition Council on the impact of new nonbank consumer-finance entrants from a competition, consumer-protection, and financial-stability perspective. Although the report calls for reconsideration of bank-merger policy with an eye to the growing role of fintechs and bigtechs, its overall view of market power fails in our view to capture the actual landscape in which these important new entrants compete with banks. For example, its focus on deposit-market concentration compares banks principally to neobanks, failing to consider deposit-like products such as prime MMFs and in many cases also credit-union deposits. As a result, erroneous conclusions are drawn about market power that exists when all competitors – not just bigtechs or fintechs – are considered.
Toomey Calls for More Fed Transparency
Sen. Toomey (R-PA) continued Republican demands for still more Fed transparency, sharply criticizing the Fed’s Friday proposal to provide some transparency into which institutions are granted master accounts.
Sweeping CFPB Fee Restrictions Now Effective
CFPB Advances Bigtech Market Power Campaign
Continuing its campaign against bigtech’s market power, the Federal Register today includes the CFPB’s notice and request for comment on what fees bigtech payment operators levy on users for violations of acceptable use policies and whether their policies include provisions to restrict user platform access.
Fed Staff Paper Tries To Gauge Social Welfare Impact Of Liquidity, Capital Regs
A new Fed staff study attempts to lay out the social costs and benefits of large-bank liquidity and capital regulation.
Warren Continues Campaign Against Wells Fargo, Zelle
Sen. Warren (D-MA) today continued her campaign against Zelle by sending letters to its parent company and Wells Fargo, taking particular aim at what she deems the latter’s failure to provide adequate claims and reimbursement data and labelling responses to previous letters “insulting.”
Warren Denounces Fed “Culture of Corruption”
Sen. Warren (D-MA) today also continued her campaign against Chairman Powell, sending him a letter alleging “another set of egregious and embarrassing ethics breaches.”
CFPB Tackles Payment-System User Fines
Following Director Chopra’s recent focus on Paypal’s withdrawn content penalty, the CFPB today announced it will reopen the public comment period on its bigtech payments order, widening its focus beyond Paypal to all bigtech payment-service providers. Notably, Zelle is not included in this round. The order had required Facebook, Google, Apple, Amazon, Square, and Paypal to turn over information on their payments products, business plans, and practices. The Bureau now seeks further information on their acceptable use policies and how and under what circumstances they levy fines.
Setting Stage for US Action, UK Regulators Target Bigtech Consumer-Finance Market Power
Focusing principally on competition, the UK’s Financial Conduct Authority (FCA) today released a discussion paper investigating bigtech’s entry into payments, deposit, consumer-credit, and insurance.
With Yellen Backing, SEC Central-Clearing NPR Advances
The Federal Register today includes the SEC’s proposal requiring that market clearinghouses submit certain secondary-market transactions for clearing along with the small percentage now already centrally-cleared.
FDIC Reports Significant Financial Inclusion Progress
Showing significant improvements in financial inclusion, the FDIC today released its biennial under- and unbanked household survey.
CFPB to Require Almost-Open Banking
At long last and as recently promised, the CFPB later this week will start a rulemaking process that would ultimately require financial institutions to share personal data with a consumer upon his or her request.
Democrats Get Ready To Blame The Fed
White House Reaffirms Anti-Algo Stand
The White House late yesterday announced core bigtech policy principles. These are extremely general and do not go as far in areas such as antitrust that progressives sought.
U.S. Announces Start of Work on Basel “End Game”
Ahead of what might otherwise have been a fractious Basel Committee meeting, the Fed, OCC, and FDIC today reaffirmed the U.S. commitment to finalize what FRB Vice Chair Barr Wednesday called the Basel III “end-game.”
Basel Chair Announces Preliminary AI Priorities
Pablo Hernández de Cos, Chair of the Basel Committee, announced today the work that regulators plan on AI and algorithmic decision-making.
OFR Details Climate Data-Sharing Efforts
Acting OFR Director James Martin today addressed the need for integrated climate-related financial data and challenges to forecasting and modeling climate risk.
Liang Stresses Climate-Resiliency
Treasury Under Secretary Liang today reiterated an array of agency and Administration climate-risk priorities, emphasizing ongoing Treasury and FSOC climate resiliency efforts and underscoring Treasury’s commitment to a net-zero economy.
Treasury To Issue Price-Cap Sanction Guidance
Deputy Treasury Secretary Wally Adeyemo today made it clear that enforcement of the anti-Russia oil-price caps will depend not only on restricting shipping insurance, but also doing so for financial and payment services.