#bigtech – Page 4 – Federal Financial Analytics

26 04, 2022

FedFin on: Chopra Stands His Ground on Sweeping Agenda, Administrative Process

Arezou Rafikian2023-03-01T15:52:51-05:00April 26th, 2022|The Vault|

The Senate Banking Committee’s hearing today with CFPB Director Chopra was a sharply partisan session with little immediate impact on what Mr. Chopra plans to do to achieve his sweeping new vision. Although the debate will have little to no impact on bank-merger policy, much of the session focused on the actions Mr. Chopra took in concert with Acting Chairman Gruenberg to wrest FDIC control from former Chair McWilliams and issue an RFI suggesting significant changes to both merger analytics and bank-resolution policy…

The full report is available to retainer clients. To find out how you can sign up for the service, click here.…

22 03, 2022

CONSUMER39

Arezou Rafikian2023-04-03T13:12:56-04:00March 22nd, 2022|1- Financial Services Management|

Anti-Discrimination Enforcement

Reflecting one of its new director’s top priorities as well as that of the Biden Administration, the Bureau of Consumer Financial Protection has significantly revised its examination manual when it comes to behavior that might be viewed as discriminatory in a wide range of consumer-financial products, services, underwriting, advertising, marketing, governance, and other arenas. Because the new approach is both sweeping and imprecise, different examiners and/or different CFPB offices may reach different interpretations of data and company attributes as indications of discrimination. The Bureau has thus put the entire sector on notice that anything that might have even the appearance of overt discrimination, discriminatory treatment, or disparate impact could result in CFPB sanction.

CONSUMER39.pdf…

21 03, 2022

DAILY032122

Eliza Allen2023-04-03T13:15:47-04:00March 21st, 2022|2- Daily Briefing|

FSB Cites Growing FinTech/BigTech Concerns, Policy Solutions Await

The FSB today published its latest assessment of fintech, now adding bigtech to the picture and elaborating on the array of policy concerns it and BIS have previously sketched out. We will shortly provide clients with an in-depth analysis of a report which concludes that the pandemic has significantly accelerated digital transformation. This improves financial inclusion, but raises growing risk of structural change by way of dominant players outside the regulatory perimeter.

SEC Sets Out Sweeping U.S. Climate-Risk Disclosure Construct

On unsurprising party lines (3-1), the SEC today released proposed climate-risk disclosures for public registrants. Although Congressional Democrats pressed for express materiality standards, the proposal relies on current interpretations of what must be disclosed. Although Congressional Republicans derided the proposal as far outside the Commission’s mandate, it would require not only Scope 1 and 2 disclosures, but also an initial construct designed to lead gradually, but indisputably, to Scope 3 disclosures from larger companies.

Daily032122.pdf…

21 03, 2022

m032122

Arezou Rafikian2023-04-03T13:18:30-04:00March 21st, 2022|6- Client Memo|

How to Set Course to a Digital Future

Last week, we laid out the macrofinancial implications of the Ukraine crisis – i.e., its impact on the global financial-and-regulatory order. Some of this analysis is founded on President Biden’s digital-asset executive order, which also has profound and immediate impact on critical macroprudential issues at the border of innovation and regulation to which we now turn. To forecast how digitalization will come upon us, the digital-asset order must be read in the Administration’s broader context in which high-impact political issues, such as racial equity, weigh at least as heavily as the complexities of CBDC or even the benefit of a future financial crises foregone.

m032122.pdf…

21 03, 2022

Karen Petrou: How to Set Course to a Digital Future

Arezou Rafikian2023-04-03T13:18:42-04:00March 21st, 2022|The Vault|

Last week, we laid out the macrofinancial implications of the Ukraine crisis – i.e., its impact on the global financial-and-regulatory order. Some of this analysis is founded on President Biden’s digital-asset executive order, which also has profound and immediate impact on critical macroprudential issues at the border of innovation and regulation to which we now turn. To forecast how digitalization will come upon us, the digital-asset order must be read in the Administration’s broader context in which high-impact political issues, such as racial equity, weigh at least as heavily as the complexities of CBDC or even the benefit of a future financial crises foregone.

Administration policy based on Democratic politics is set not only by the digital-asset order, but also by other White House directives that will define the boundaries of what Treasury and the agencies – the Fed included at least to a point – will do. To forecast digital-asset policy, one must thus also divine the outcome of two other executive orders.

First, there’s the President’s competition directive. Every critical consumer-protection question under the CFPB’s purview is now considered first and foremost in terms of competition, with the agency’s director making it manifestly clear that almost anything done by any big bank is a target for structural reform. Director Chopra doesn’t like fintech or biotech much better than most banks do, but his approach to digital assets is likely only to squelch big banks as much as he can and thus to drive cryptoassets further into …

2 02, 2022

DAILY020222

Eliza Allen2023-04-05T14:10:54-04:00February 2nd, 2022|2- Daily Briefing|

BIS Outlines Regulatory Goals for More Tech-Based Lending
A new BIS paper approaches fintech’s financial-inclusion impact from a new angle: the extent to which personal-information collateral backing consumer debt can be governed to ensure that innovation also advances inclusion without leading to undue market power and/or disintermediation.

BIS Chief Calls for CBDC ASAP
The BIS today released a speech late last month from Managing Director Carstens saying that the “soul of money” – i.e., its essence and purpose – is best entrusted to central banks, not DLT or private issuers.

CFPB Redoubles Effort Against “Junk” Fees
The CFPB today posted a note standing firmly behind its RFI seeking input on the “junk” fees the agency believes pervade consumer finance (see FSM Report CONSUMER38).

Senate GOP Heighten Objections to FDIC Democrats
Senate Republicans today strengthened their objections to the December effort by FDIC Democrats to release a bank-merger RFI (see FSM Report MERGER9), introducing legislation to strip the Board of the Comptroller of the Currency and CFPB director.

Daily020222.pdf…

21 12, 2021

MERGER10

Arezou Rafikian2023-05-22T13:50:11-04:00December 21st, 2021|1- Financial Services Management|

Bank-Merger Policy Review

Just days after the FDIC chair refused to advance a request for comment on bank-merger policy, the Department of Justice released one signaling agreement with many of the concerns Democrats aired in concert with the RFI. Justice did so by reopening a 2020 inquiry on which neither the Trump nor Biden Administrations acted, reiterating the questions then and adding new ones indirectly addressing the competitiveness, community service, and consolidation questions highlighted in President Biden’s executive order on overall U.S. competition.

MERGER10.pdf…

7 12, 2021

Daily120721

Arezou Rafikian2023-05-23T13:20:29-04:00December 7th, 2021|2- Daily Briefing|

FBO Sanctions Update
Sens. Cotton (R-AR), Rubio (R-Fl) and eleven GOP colleagues have introduced S. 3318, legislation pressing the U.S. to deny foreign financial institutions access to the U.S. financial system if they provide “Palestinian martyr” payments.

Chopra Slams “Banking Cartel” as CFPB Sets LIBOR Standards
The CFPB today issued its final LIBOR-transition rule, with Director Chopra’s accompanying statement emphasizing that this rule will now prevent the “banking cartel” from again illegally setting disadvantageous consumer interest rates.

CFPB Accepting Additional Bigtech Inquiry Comments
The CFPB today reopened the comment period on its bigtech inquiry, now accepting comment until December 21. As we noted when the comment period opened, the Bureau then provided a very short comment window because Director Chopra said that the Bureau must move quickly due to the initiative’s importance.

Warren Readies Anti-Powell Attack
Sen. Warren (D-MA) today released a letter making it clear that she will strongly oppose Chairman Powell when his confirmation comes before the Senate Banking Committee.

FSB: Persistent Gaps Challenge Resolution Regimes
The FSB today updated progress on implementing its key attributes of effective resolution regimes, reporting significant advances at GSIBs despite gaps at smaller banks, insurance companies, and CCPs.

HFSC Dems: Investment Firms Must Increase Diversity
Ahead of a hearing Thursday sure to be critical of large financial companies, a new HFSC majority staff report on diversity and inclusion looks at large investment firms (including those owned by banks) and finds little progress.

Daily120721.pdf…

6 12, 2021

M120621

Arezou Rafikian2023-05-23T13:26:33-04:00December 6th, 2021|6- Client Memo|

Why Pro-Competition Consumer Finance May Not be Pro-Consumer Consumer Finance

Under Rohit Chopra, consumer protection has taken an important, widely-overlooked turn with potent consequences for all retail financial-product providers. Media coverage of the CFPB’s bigtech order, mortgage-discrimination action, and last week’s anti-overdraft campaign highlighted traditional issues such as fair lending and predatory pricing. These are indeed in the CFPB’s sights, but so also is a much bigger target: the extent to which a few large companies are said to be able to set consumer interest rates and otherwise dictate the shape of U.S. retail finance. This might cut big banks down to the puny size their critics seek, but it’s more likely to accelerate the transformation of retail finance into a wild west of unregulated providers outside the reach of safety-and-soundness standards and, in many cases, even of the CFPB. If this pro-competition campaign is mis-calibrated, the CFPB will put consumers at still greater risk.

M120621.pdf

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6 12, 2021

Karen Petrou: Why Pro-Competition Consumer Finance May Not be Pro-Consumer Consumer Finance

Arezou Rafikian2023-05-23T13:26:47-04:00December 6th, 2021|The Vault|

Under Rohit Chopra, consumer protection has taken an important, widely-overlooked turn with potent consequences for all retail financial-product providers. Media coverage of the CFPB’s bigtech order, mortgage-discrimination action, and last week’s anti-overdraft campaign highlighted traditional issues such as fair lending and predatory pricing. These are indeed in the CFPB’s sights, but so also is a much bigger target: the extent to which a few large companies are said to be able to set consumer interest rates and otherwise dictate the shape of U.S. retail finance. This might cut big banks down to the puny size their critics seek, but it’s more likely to accelerate the transformation of retail finance into a wild west of unregulated providers outside the reach of safety-and-soundness standards and, in many cases, even of the CFPB. If this pro-competition campaign is mis-calibrated, the CFPB will put consumers at still greater risk.

Mr. Chopra’s interest in market competition doubtless derives from his stint as a lone, strong voice at the Federal Trade Commission who lost pretty much every battle he waged against giant corporate combos. It surely stems also from President Biden’s executive order demanding that federal agencies take express pro-competitive action. And, indeed, there’s a lot to do in sectors such as tech-platform companies that already seem to have skipped over just being monopolies to become potent oligopolies with powerful impact over each aspect of everyday life, not to mention pricing and economic inequality.

However, neither traditional nor neo-Brandeisian antitrust theory applies well …