17 04, 2024


2024-04-17T17:36:07-04:00April 17th, 2024|2- Daily Briefing|

Global Regulators Tackle NBFI Margining, Collateral Transformation

As it has long promised, the FSB today issued a consultation on standards designed to buttress derivatives, commodity, and securities-financing markets under stress through more stringent margining and collateral requirements.

Basel Head Says Go Slow re AI Risk, Supervisory Models

Basel’s Secretary General, Pablo Hernández de Cos, today focused on AI’s risk-reward profile in the banking sector, concluding that it raises a series of profound questions global regulators must work cooperatively to address.

Lummis, Gillibrand Begin Senate Stablecoin Debate

As long anticipated, Sens. Lummis (R-WY) and Gillibrand (D-NY) today introduced a significantly revised version of their 2022 Bill (see FSM Report CRYPTO28) laying out U.S. stablecoin standards.

FIO Subpoena Power Faces Rollback

At HFSC’s mark-up today, the committee began with Rep. Fitzgerald’s (R-WI) Insurance Data Protection Act, H.R. 5335, which would repeal the Federal Insurance Office’s authority to subpoena insurance companies for data collection.

HFSC Likely to Pass RegTech Bill

At HFSC’s extended mark-up today, the committee turned to H.R. 7437, a bipartisan bill that would require federal banking regulators to regularly review and report to Congress on their use of technology to ensure they’re equipped to address threats to the financial system.

HFSC Set to Pass AOCI Recognition, Systemic-Risk Designation Study Measures

Continuing our coverage of today’s mark-up, HFSC was generally supportive of the two bills on the agenda from Democrats, H.R. 4206 from Rep. Sherman (D-CA) requiring large banks with available for sale securities to mark to market …

16 04, 2024


2024-04-16T17:10:39-04:00April 16th, 2024|2- Daily Briefing|

House GOP Takes on New Merger Guidelines

The House Small Business Committee today sent a GOP letter to the FTC and Justice Department  strongly protesting new merger guidelines (see FSM Report MERGER13) on grounds that they sharply curtail needed small-business capital.

House Hikes Iran Sanctions

Working through a series of sanctions bills in the wake of recent geopolitical developments, the House yesterday voted 294-105 to advance H.R. 5921, a bill introduced by Rep. Huizenga (R-MI) that prohibits Treasury from authorizing transactions by U.S. financial institutions in connection with Iranian imports or exports other than food, medicine, and other humanitarian assistance.

House Passes Bill Targeting China-Iran Petroleum Trade

Continuing its response to recent geopolitical events, the House yesterday voted by a 383-11 margin to pass H.R. 5923, a bill from Reps. Lawler (R-NY) and Gottheimer (D-NJ) that would require the President to periodically determine if any Chinese financial institutions have purchased petroleum or petroleum products from Iran, stating that U.S. financial institutions also may not open or maintain certain accounts with Chinese institutions that have done so.

Warren Again Targets OCC Merger Decisions

Continuing recent attacks on the OCC’s approach to mergers, Sens. Warren (D-MA) and Blumenthal (D-CT) yesterday sent a letter to Acting Comptroller Hsu sharply criticizing the agency’s decision first to allow NYCB to acquire Flagstar bank and then do the same shortly thereafter for Signature.

OCC Toughens LCR, NSFR via New Reporting Requirements

The OCC today sought public comment as required by law for …

12 04, 2024


2024-04-12T16:37:57-04:00April 12th, 2024|3- This Week|

The CFPB Stand-Off

On Tuesday, the HFSC Financial Institutions Subcommittee holds yet another hearing which Republicans hope will so embarrass the CFPB that their decades-long quest to redesign or even kill it gains traction ahead of critical litigation and the national election.  The nominal topic of the hearing is the Bureau’s financial audit, and Republicans will surely make as much of it as they can to damage Director Chopra’s leadership.  However, the real target is the Bureau’s race to finalize a series of substantive actions ahead of its own political challenges should litigation and the election go against it.  The most immediate rule on the GOP’s firing line is the credit-card late-fee standard (see FSM Report CREDITCARD37), a rule now enmeshed in court decisions and challenges of unprecedented intricacy that nonetheless appear likely leading to a near-term injunction blocking the rule as lenders devoutly desire.


12 04, 2024


2024-04-12T16:38:09-04:00April 12th, 2024|2- Daily Briefing|

Barr, Tillis Warn CFPB Against Mandatory-Arbitration Ban

HFSC Financial Institutions Chair Barr (R-KY) and Sen. Tillis (R-NC) sent a letter to the CFPB today threatening to invoke the Congressional Review Act to overturn any newly-proposed mandatory-arbitration ban from the CFPB, warning that it would violate the CRA.  This is based on the enactment of a reversal of the agency’s prior ban in 2017 which the Members state now cannot be vitiated by any proposal close to the one revoked.

IOSCO Adds CD, AI Workstreams to Revised Work Plan

IOSCO today announced revisions to its 2024 work plan, adding new workstreams to address opacity and illiquidity in the single-name CDS market as well as the integrity, financial stability and investor protection associated with AI along with monitoring financial-asset tokenization.


8 04, 2024


2024-04-08T16:31:06-04:00April 8th, 2024|2- Daily Briefing|

Schumer Weighs In Against CapOne/Discover Deal

Senate Majority Leader Schumer (D-NY) made it clear that the Capital One/Discover merger faces an unusually high hurdle:  strong opposition with the power to pack even more of a political punch than concerns voiced so far by progressive Democrats.

Treasury IMF Presses for Bank Insurance, Pension, Bond-Fund Rules Restricting Private-Credit Interconnection

The IMF continued its pressure on private credit, finding that the sector clocked in last year at $2.1 trillion with three quarters of this in the U.S. and soon to eclipse syndicated lending and high-yield bonds.

GOP Introduces CRA Resolutions Challenging Climate-Risk Rules

Splitting the issue among various GOP sponsors, GOP members have introduced Congressional Review Act resolutions to overturn climate-risk rules finalized by the OCC (H.J. Res 124 by Rep. Donalds [R-FL] et al.), the FRB (H.J. Res 125 by Rep. Fitzgerald [R-WI] et al.), and FDIC (H.J. Res 126 by Rep. Houchin [R-IN] et al.).

CFPB Criticizes Credit Report Inaccuracies for Victims of Human Trafficking, Identity Theft

A CFPB report criticized furnishers for providing false or fraudulent information to consumer reporting companies and accused consumer reporting agencies of failing to ensure the accuracy of credit reports related to victims of human trafficking and identity theft, finding significant non-compliance with its 2022 rule requiring reporting companies to block adverse information.

FRB-NY Finds that Brokers with BHCs are Better, But Are They?

The Federal Reserve Bank of New York’s blog today posted a brief about a May 2021 study …

8 04, 2024


2024-04-08T15:25:01-04:00April 8th, 2024|4- GSE Activity Report|

Discounting Discount Points

It wasn’t hard for us to forecast that, after NEC Director Brainard endorsed CFPB Director Chopra’s jihad against mortgage “junk fees,” that the discount points that received particular opprobrium would be moved up the priority ladder for federal restriction.  A Friday CFPB report makes clear that this is indeed very much in the works.  We expect new standards to mandate additional protections for borrowers through more complex disclosures, sharp restrictions on comparison-shopping and lead-generation sites, and maybe even a UDAAP edict requiring that discount points be in a borrower’s best interest based on the likely break-even point.


5 04, 2024


2024-04-05T16:15:49-04:00April 5th, 2024|2- Daily Briefing|

CFPB Targets FHA, Refi Discount Points

The CFPB released a report finding that the percentage of homebuyers paying discount points roughly doubled from 2021 to 2023, with the increase more pronounced for buyers with lower credit scores.

Treasury KYC Proposal Coming This Year

In remarks, Treasury Undersecretary Brian Nelson made it clear that, as we anticipated, FinCEN’s pending RFI on KYC procedures will be reflected later this year in formal rulemaking as required by the 2021 law (see FSM Report AML133).

Bowman Focuses on Limited Liquidity-Resilience Reform

Building on her comments earlier this week regarding liquidity regulation, FRB Gov. Bowman said that regulators should “encourage, but not mandate” the exercise of contingent-funding plans, noting a fine line between bank supervision and interfering with bank management.

FSB Secretary General Calls For Tokenization Research

Reiterating the FSB’s ongoing stablecoin and digital-asset work, the Board’s Secretary General, John Schindler, today indicated that it would be useful for researchers to explore the potential use cases, benefits and risks of tokenization.


3 04, 2024


2024-04-03T17:21:51-04:00April 3rd, 2024|2- Daily Briefing|

Bowman Wants Policy Review, Fed-Operational Improvements Ahead of New Liquidity Regs

Turning from mergers to the Fed’s lender-of-last-resort role, Gov. Bowman today argues that new liquidity policies require careful review before any new rules are adopted.

Fed Treads Carefully in New Global Money-Tokenization Project

The BIS today announced a new program exploring ways in which tokenizing central-bank and bank money for wholesale transactions on programmable platforms would benefit the monetary system.

Powell Defends Independence, Mandate Limits

In remarks today on monetary policy and Fed independence, Chair Powell was at pains to emphasize that climate risk was outside the Federal Reserve’s mandate.

FHFA Treads Cautiously Towards FHLB Reform

Issuing a minor ruling regarding Puerto Rico cooperatives, FHFA today also laid out its 2024 priorities following last year’s report on the Home Loan Bank System.

Barr Stands by CRA Rule

Responding to questions about the court injunction on the CRA rule, FRB Vice Chair Barr today stated  that the rules are restated expectations within the boundaries of the Act and Congress intended the agencies to update the 1977 law.

Chopra: Merger Approval Requires Affirmative, Additive Community Benefit

Building on his comments when the FDIC board voted 3-2 to issue its merger proposal (see FSM Report MERGER15), CFPB Director Chopra today doubled down on the view that bank mergers should only be approved if there is demonstrable community benefit over an extended period of time.


1 04, 2024


2024-04-01T16:24:02-04:00April 1st, 2024|2- Daily Briefing|

FRB-NY: Experience Begets Overdraft Fee Knowledge

Perhaps reflecting the Biden Administration’s examination of overdraft fees, a new report from the Federal Reserve Bank of New York staff on overdraft credit found that experienced overdrafters are roughly twice as likely to know their bank’s overdraft fee than customers who have not overdrawn in the past year.  The report also finds that half of customers surveyed did not know their bank’s overdraft fee, which the report calls “potentially worrisome,” but notes that 41 percent of respondents are also indifferent to their bank’s overdraft policies.

Barr Takes Over CFPB Card-Fee Fight

As anticipated, HFSC Financial Institutions Subcommittee Chair Barr (R-KY) has introduced H.J. Res. 122, the same CRA resolution overturning CFPB’s late fee rule introduced last week by freshman Rep. Ogles (R-TN).  Reports indicate poor communication between the Chair and junior member, and we expect this resolution to be the one that moves forward.


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