#CFTC – Page 4 – Federal Financial Analytics

15 09, 2022

INVESTOR20

Arezou Rafikian2022-10-13T11:52:44-04:00September 15th, 2022|5- Client Report|

After Senate Banking Session, SEC Stays on Course

The Senate Banking hearing with Chairman Gensler today went as expected: Democrats generally praised his work while Republicans strongly opposed it on both substantive and procedural grounds. As a result, we expect the chairman to continue as he has in the wake of prior, comparable hearings – pretty much as he pleases and as the rest of the commission will support. This will clearly change if Republicans gain control of both Houses of Congress after the midterm. Unless or until it does, the SEC will continue its enforcement-focused approach to cryptoasset regulation and climate disclosures. Chairman Brown (D-OH) also confirmed our forecast: he will defend not only his jurisdiction, but also a much more stringent approach to crypto regulation than contemplated by the Senate Agriculture Committee’s bipartisan legislation.

INVESTOR20.pdf…

9 09, 2022

Al091222

Eliza Allen2022-10-24T11:55:52-04:00September 9th, 2022|3- This Week|

The Crypto Kid

As we noted last week, SEC Chairman Gensler has made it even clearer that he’s giving no crypto ground to the CFTC or indeed to anyone who doesn’t agree that the Commission has the statutory authority to govern anything crypto token or intermediary that the Commission believes engages in securities offering, settlement, or transactions. This follows the “same-risk, same-rules” framework most recently affirmed for bank digital standards in Michael Barr’s maiden speech, but Mr. Gensler takes it to a different level. Unlike his banking-agency colleagues, he doesn’t have to reach inter-agency consensus to get what he wants unless or until Congress or the courts tell him otherwise. To be sure, some members of Congress will try just this later in the week. The Senate Agriculture Committee’s hearing will stand by the CFTC and Senate Banking Republicans will excoriate Mr. Gensler on Thursday for his strong stand on crypto along with much else. As always, we’ll be watching, analyzing, and reporting, but let us know if you’ve any questions in the interim.

Al091222.pdf…

8 09, 2022

DAILY090822

Eliza Allen2022-11-09T13:00:10-05:00September 8th, 2022|2- Daily Briefing|

Gensler Stands Crypto Ground

In remarks today, SEC Chairman Gensler stood firm: almost all crypto tokens are securities because they are investment contracts under the “Howey Test.” Further guidance is unnecessary, he said, because the Commission has been clear and crypto companies request it only because they do not like this conclusion, not because they fail to understand it.

GOP Demands Answers On CBDC Authorization, Construct

Ranking Member McHenry (R-NC) and all of the HFSC’s Republicans today sent a letter to Vice Chair Brainard demanding that she clarify several issues germane to U.S. CBDC issuance. These most notably include the extent to which the “support” from the Administration and Congress she said was needed (see Client Report CBDC13) means express statutory change and Administration order.

Toomey Demands Greater CRA Transparency, Updated Regulations

Ranking Member Toomey (R-PA) today sent a letter to Vice Chair Brainard, Acting Comptroller Hsu, and Director Gruenberg sharply criticizing what he calls a lack of transparency of CRA-derived community benefit plans (CBPs). Describing these as an “egregious” circumvention of congressional intent, he demands that the banking regulators update regulations implementing GLBA’s CRA sunshine provision, specifically urging them to establish a public database containing all CRA-related agreements in full.

Daily090822.pdf…

30 08, 2022

DAILY083022

Eliza Allen2023-01-03T16:41:05-05:00August 30th, 2022|2- Daily Briefing|

FRB-Atlanta: Cardless Consumers Pay More Per Transaction

After the Fed announced imminent FedNow liftoff, the Federal Reserve Bank of Atlanta yesterday issued a release summarizing research that concludes that lower-income consumers pay considerably more per each payment transaction due the use of cash and debit cards that do not provide credit-card rewards and the overall price increase that merchants charge to compensate for interchange fees.

Oversight Subcomm Chair Presses Agencies on Crypto Oversight, Jurisdictional Warfare

The Chairman of the House Oversight Committee’s Subcommittee on Economic and Consumer Policy, Rep. Raja Krishnamoorthi (D-IL), today sent letters to Treasury, the SEC, the CFTC, the FTC, and several major crypto exchanges demanding information and documents showing what each is doing to combat cryptocurrency-related fraud. Calling for improved regulation and guidance, the Chairman criticizes regulators for their insufficient coordination in response to escalating risks.

Daily083022.pdf…

3 08, 2022

DAILY080322

Eliza Allen2023-01-04T13:29:59-05:00August 3rd, 2022|2- Daily Briefing|

Senate Ag Crypto Bill Lauds CFTC, Faces Many Obstacles

As we anticipated as the crypto debate continues, the Senate Agriculture Committee has sought to claim jurisdiction with a new, bipartisan bill granting the CFTC broad regulatory, supervisory, and enforcement powers over most digital-asset platforms and the assets traded on them.

ECB Study Favors CBDCs Over Private Crypto for Cross-Border Payments

A study released by the ECB today argues that CBDCs would be a cheaper, safer, and more effective vehicle for cross border payments for global transactions than privately-issued cryptoassets or stablecoins. Based on assessment of global, not just EU markets, the study thus has implications for those in the U.S. opposing a CBDC.

FRB-Minneapolis Renews Attack on Big-Bank Capital Resilience

Renewing its attack on big-bank capital ratios, the Federal Reserve Bank of Minneapolis today released its own stress-test conclusions, reinforcing its president’s longstanding view that the largest U.S. banks are woefully under-capitalized even though test results show considerable variance on a bank-by-bank basis as well as overall resilience.

FRB Philadelphia President Touts Fintech’s Financial Inclusion Potential

FRB Philadelphia President Patrick Harker today stated that fintech can increase financial inclusion, specifically citing buy-now pay-later products because they offer financial services to low- to moderate-income customers who would otherwise be locked out of traditional lending because they are more likely to be non-White, lower earning, and younger.

Daily080322.pdf…

25 07, 2022

DAILY072522

Eliza Allen2023-01-04T15:47:24-05:00July 25th, 2022|2- Daily Briefing|

Stablecoin Bill Still in Limbo

As we noted last week, the fate of stablecoin legislation at this week’s HFSC mark-up has been uncertain. The committee staff memo today does not include a bill in this area; it is our understanding that negotiations continue on a draft amenable to both Chairwoman Waters (D-CA) and Ranking Member McHenry (R-NC).

OCC Seeks Fintech, Nonbank Analyses

The OCC today calls for academic and policy-focused papers on the impact of fintech and nonbanks on banking and the markets for lending, deposit-taking, and payment services. This sweeping inquiry is designed to inform the agency as policy continues to take shape in these high-profile areas, with the announcement today providing no insight into whether these papers – which will doubtless come also from trade associations and other advocacy groups – will do more than provide a symposium’s worth of discussion.

Stablecoin Rules – or Lack Thereof – Likely to Remain

As noted in media this afternoon, HFSC will in fact not mark up a stablecoin bill on Wednesday. Instead, some staff indicate that a discussion draft will be released so that the process of crafting a bill can continue in August in hopes of a September vote. However, even if one were to occur, the odds of legislation in this Congress are slim to none at so late a date in the absence of any meaningful Senate Banking action in this arena.

Daily072522.pdf…

18 07, 2022

DAILY071822

Eliza Allen2023-01-06T14:51:54-05:00July 18th, 2022|2- Daily Briefing|

HFSC Set for Consequential GSE-Reform Review

As noted last week, HFSC will on Wednesday convene a hearing with FHFA Director Thompson. Although Republicans sought this session, the majority-staff memo ahead of the hearing unsurprisingly reflects Democratic views on matters such as the GSEs’ equitable-finance plans.

Comment Period Extended on Consequential Credit-Card Proposal

The Federal Register today provides a ten-day comment period extension for the CFPB’s ANPR on Credit Card Late Fees and Late Payments (see FSM Report CREDITCARD35). The former deadline was July 22; it is now August 1.

G20 Ministerial Dissolves Over Sanctions, Climate Risk

Reinforcing fears of global fragmentation, the G20 finance ministerial over the weekend was unable to agree on a joint communique even though these are historically anodyne pronouncements that mask considerable disagreement.

CFTC Presses for Commodity-Originator Climate-Risk Comments

The CFTC today extended the comment deadline for its climate-risk RFI from August 8 to October 7. Chairman Rostin Behnam said the Commission did so to encourage feedback from farmers and other small entities critical to the Commission’s mission.

Daily071822.pdf…

13 07, 2022

DAILY071322

Eliza Allen2023-01-06T15:18:57-05:00July 13th, 2022|2- Daily Briefing|

Small Business Committee Urges Fintech Transparency, New CFPB Role in Fintech Lending

Today’s Small Business Subcommittee on Oversight, Investigations, and Regulations hearing on fintech transparency focused on financial practices that may harm small businesses’ access to credit.

HFSC Party Lines Form on CRA Rewrite

As anticipated, the Subcommittee on Consumer Protection and Financial Institutions today held a hearing examining the banking agencies’ proposed rule to modernize the CRA (see FSM Report CRA32).

Fed Proposes Debit-Card, Payment-System Data Collections

Although the Fed has yet to finalize a controversial proposal related to debit-interchange fees (see FSM Report INTERCHANGE8), it has proposed changes to how it collects debit-card information essential to implementing changes to network selection and, should it come to do so, fee calculations.

FSB Chair Reiterates Need for Crypto Regulation, Highlights Progress on Climate Roadmap

FSB Chair Klaas Knot’s letter today to the G20 ministerial reiterated all the points regarding COVID exit strategies, regulation of cryptoassets, and executing FSB’s climate roadmap outlined after June’s plenary meeting.

Senate Democrats Demand More Stringent, Binding Fed Ethics Standards

Senate Banking Committee Chairman Sherrod Brown (D-OH) joined by four other Democrats today sent a letter to Chairman Powell again calling for more stringent, enforceable Fed ethics standards, and reminded Mr. Powell in strongly-written arguments about the need to do so via binding regulation or by the kind of statutory change they have already introduced.

Global Regulators Press for Global Stablecoin Payment-Risk Standards

Doubtless spurred by FSB requests and market …

23 06, 2022

DAILY062322

Eliza Allen2023-01-25T15:46:26-05:00June 23rd, 2022|2- Daily Briefing|

Treasury Tries Transparency

Treasury and its inter-agency working group today advanced its earlier findings (see Client Report TMARKET2) with a public consultation on data transparency.

House Ag Subcommittee Advances CFTC Digital-Asset Authority

Advancing proposals to give the CFTC jurisdiction over aspects of the crypto market as proposed in the Lummis-Gillibrand bill (see FSM Report CRYPTO28), the House Agriculture Subcommittee on Commodity Exchanges, Energy, and Credit today advanced statutory changes that not only give the CFTC this authority, but also expand the committee’s jurisdiction.

OCC Targets Macro Risks

The OCC today released its latest analysis of risks to federally-chartered institutions, reiterating longstanding operational-risk concerns now heightened by the challenges facing banks seeking to retain or hire specialized personnel.

House Republicans Craft New Data-Privacy Regime

HFSC Ranking Member McHenry (R-NC) and panel Republicans today released a draft bill establishing consumer-data privacy rights with an eye on emerging financial providers and products.

Daily062322.pdf…

15 06, 2022

CRYPTO28

Eliza Allen2023-01-26T15:43:09-05:00June 15th, 2022|1- Financial Services Management|

U.S. Digital-Asset Framework

After protracted negotiations and much public attention, bipartisan senators have introduced a far-reaching bill designed to encourage digital-asset use without undue risk to consumers, investors, or the financial system. The bill decides most, if not all, of the outstanding regulatory barriers to digital-asset use in favor of digital assets and their providers. Provisions in many cases go farther than public discussion has so far noted – for example, the measure not only expands the ability of digital-asset providers to reach retail and wholesale customers, but also gives them access to FDIC resolution without the cost of paying insurance premiums or coming under many of the rules that govern insured depositories. Digital-asset providers could also make loans without the disclosures designed to be transparent to less well-informed consumers or the other consumer-protection standards administered by the CFPB.

CRYPTO28.pdf …