#Chopra – Federal Financial Analytics

30 03, 2023

DAILY033023

Eliza Allen2023-03-30T17:27:30-04:00March 30th, 2023|2- Daily Briefing|

Yellen Calls for Bank, Nonbank Regulatory Rewrite

Implicitly confirming press reports that the White House will soon press for tougher bank rules, Treasury Secretary Yellen today said that, as beneficial as the rules imposed since the great financial crisis have been, more stringent standards are necessary.

Hsu Sets Dual OCC Mission: Safety, Fairness

In remarks today, Acting Comptroller Hsu emphatically echoed statements of other top regulators that the banking system is safe and sound, emphasizing that the OCC is monitoring the market and is prepared to use its tools to protect the system.

Basel Updates Global Liquidity, Operational Standards

Although the U.S. has still not even proposed the Basel IV “end-game” standards, the Basel Committee continues to refine them and today issued its latest set of FAQs.

White House Sets Reg-Reform Agenda

As anticipated early this morning, the White House has issued a statement calling on federal banking agencies to roll back rules the President describes as weakening “common-sense bank safety and supervision.”

Senate Dems Press Agencies to Strengthen Capital Rules

Following this week’s hearings (see Client Report REFORM218), Sens. Warren (D-MA), Blumenthal (D-CT), and Duckworth (D-IL) sent a letter to Vice Chair Barr, Chairman Gruenberg, and Acting Comptroller Hsu urging them to strengthen large-bank capital requirements.

CFPB Stands By Its Small-Business Reporting Rules

Despite strong industry and GOP opposition, the CFPB today finalized its small business data collection rulemaking in a sweeping final rule the Bureau says will increase transparency in small business lending, promote economic …

29 03, 2023

DAILY032923

Eliza Allen2023-03-29T17:30:21-04:00March 29th, 2023|2- Daily Briefing|

Barr Keeps CRA Hope Alive

Ahead of what is certainly going to be a trying HFSC hearing later today, FRB Vice Chairman Barr told an audience that pending CRA rules (see FSM Report CRA32) are still in the works, declining to provide any completion timeline.

Chopra Expands Post-SVB Policy Action Items

In remarks posted after a panel discussion yesterday, CFPB director and FDIC board member Rohit Chopra reaffirmed Chairman Gruenberg’s comments that changes are likely to capital and liquidity rules, but added action related to interest-rate risk management, resolution planning and stress-testing to the to-do list.

Senate Finance Dems Demand Tougher Penalties, Enforcement to Prevent Swiss Tax-Evasion Activities

Senate Finance Democrats today released a damning investigative report accusing Credit Suisse of persistently and often criminally enabling U.S. tax evasion despite a 2014 plea agreement with the U.S. Chairman Wyden (D-OR) presses for additional civil and criminal actions, noting that the UBS acquisition does not “wipe the slate clean.”

Bipartisan Senate Clawback Bill Reaches to BHC Investors, Creditors

Preempting Chairman Brown’s plans to introduce clawback legislation (see Client Report REFORM217), Sens. Warren (D-MA), Cortez Masto (D-NV), Hawley (R-MO), and Braun (R-IN) today introduced their own bill to do so.

CFPB Sets Comment Deadline For Controversial Credit Card Proposal

The Federal Register today includes the CFPB’s proposed rule on Credit Card Penalty Fees.

Daily032923.pdf…

8 03, 2023

DAILY030823

Eliza Allen2023-03-08T17:06:14-05:00March 8th, 2023|2- Daily Briefing|

HFSC Plans Broad Attack, Limited Legislation to Rewrite Administration Crypto Standards

The HFSC staff memo makes it clear that the Digital Asset Subcommittee hearing on Thursday will be a strong general GOP attack on Biden Administration crypto policy and specific campaign against the SEC’s enforcement-focused strategy.

HFSC Plans to Blast CFPB, Press Limited Change

Thursday’s HFSC Monetary Policy Subcommittee hearing on the CFPB is sure to be a raucous, partisan affair judging by the staff memo describing it. Republicans have strongly objected to the Bureau before its inception, with concerns sharply heightened by a series of recent actions under Director Chopra.

CFPB Slams Fees, Promises Mercy

Ahead of a meeting later today between senior White House officials, Director Chopra, and hundreds of state legislators concerning the President’s “junk fee” agenda, the CFPB today released Supervisory Highlights focusing on recent instances of what it deems unlawful junk fees in deposit accounts, auto loan servicing, mortgage servicing, payday lending, and student loan servicing.

GAO Doubts Fintech’s Inclusion Advantage

The GAO today released a report finding that fintech may enhance inclusion, but that this inclusion comes at risk due to the patchwork of rules governing firms offering products – e.g., wage advances – that may put vulnerable households at risk.

HFSC Republicans Scrutinize SEC Rulemaking, Fed Climate Policy

As anticipated, today’s HFSC Subcommittee Hearing with the inspectors-general for the FRB, CFPB, Treasury, and SEC focused on GOP attacks on the SEC’s IG vacancy and the CFPB’s funding mechanism.

Brown, Others Demand ABA …

1 03, 2023

DAILY030123

Eliza Allen2023-03-01T16:38:23-05:00March 1st, 2023|2- Daily Briefing|

What’s Next For McHenry Privacy Bill

As we anticipated yesterday, HFSC reported H.R. 1165, Chairman McHenry’s privacy bill, on a party-line vote of 26-21. Discussions this morning lead us to conclude that Mr. McHenry plans to consider additional changes that could be made via a manager’s amendment when bringing the bill to the House floor given that its fate there is uncertain given the GOP’s slim majority.

CFPB Targets Public-Benefits Finance

The CFPB today published a “spotlight” examining numerous fees it says “erode” public benefit programs delivered through various financial products. Focusing in particular on prepaid cards, the spotlight states that the Bureau will monitor and may take action against entities violating consumer protection laws in the delivery of cash assistance. This comes following a major enforcement action in this area against Bank of America and reports of others pending against large banks.

Treasury Sets Out Steps Seemingly Towards A U.S. CBDC

Following up the President’s executive order on digital assets (see Client Report CRYPTO26) and Treasury’s subsequent report (see Client Report CBDC14), Under-Secretary Nellie Liang today outlined next steps leading to the Administration’s decision about CBDC benefits that will strongly guide the Fed’s CBDC final call. Ms. Liang details how CBDC and FedNow each have benefits, describing how CBDCs generally work and could function in the U.S.

Daily030123.pdf…

28 02, 2023

DAILY022823

Eliza Allen2023-02-28T17:16:34-05:00February 28th, 2023|2- Daily Briefing|

CFPB Treads Gingerly on Mortgage-Disclosure Exceptions

In a notice emphasizing the CFPB’s distaste for allowing regulatory exceptions, the Bureau asks for comment on an application for one to which it seems a bit more sympathetic.

FDIC Sees Sunny Side of Bank Earnings Data

In its review of banking-industry fourth-quarter results, the FDIC today notes a sharp increase in the gap between bank loan yield and deposit interest costs.

Basel Forecasts End-Game Capital Shortfalls

The Basel Committee today issued its latest monitoring report, finding that large global banks saw capital decreases to pre-pandemic levels even as liquidity ratios continued to improve.

Bipartisan China Bills Fly Through HFSC Markup

As anticipated, HFSC today reported five bills to censure China and protect Taiwan, along with bills addressing drug-trafficking financing, biomedical security and bank service company examinations.

Democrats Stand Firm versus Privacy Preemption

Following an orderly and bipartisan start to today’s HFSC markup, Democrats and Republicans today came to verbal blows over the Chairman’s data privacy bill.

Daily022823.pdf…

24 02, 2023

DAILY022423

Eliza Allen2023-02-24T16:55:41-05:00February 24th, 2023|2- Daily Briefing|

HFSC Starts With A Bang

On Tuesday, HFSC Chairman McHenry (R-NC) honors his commitment to advance significant legislation with what is sure to be a raucous mark-up. Most importantly, Chairman McHenry will bring up a bill yet to be introduced rewriting consumer-data privacy standards.

FHFA New-Product Vetting Delayed

FHFA today pushed back the effective date of its New-Product Rule by sixty days on grounds that more time is needed for the agency and the GSEs to develop the internal processes necessary for compliance. The former effective date was February 27; the new effective date is April 28.

HFSC Set To Lock Horns On Data Privacy

With the opening quote in his release making clear that this will be a partisan fight, HFSC Chairman McHenry (R-NC) formally introduced the privacy legislation that, as noted earlier today, is now set for Tuesday’s mark-up.

CFPB Begins Administrative Adjudication, Speeding Enforcement Actions

The CFPB today finalized new adjudication rules that add administrative adjudication to its usual course of seeking redress in federal district courts. The agency argues that predecessors from which Dodd-Frank drew its responsibilities use administrative adjudication and it is thus within the CFPB’s purview now also to do so.

Daily022423.pdf…

8 02, 2023

FedFin on: Credit-Card Late Fee Regulation

Arezou Rafikian2023-02-09T09:43:39-05:00February 8th, 2023|The Vault|

Following on a controversial advance notice of proposed rulemaking, the CFPB has now released an NPR setting specific standards for credit-card late fees that also eliminates the inflation adjustments established by the Federal Reserve when implementing the 2009 credit-card law. The NPR also seeks comment on still more stringent late-fee restraints and limits on some or all of the other penalty fees now charged by some credit-card issuers. When issuing the ANPR, the Bureau also noted that it plans to advance other initiatives under its “junk-fee” standards, likely starting with those pursuant to ….

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

8 02, 2023

CREDITCARD36

Eliza Allen2023-02-08T13:00:21-05:00February 8th, 2023|1- Financial Services Management|

Credit-Card Late Fee Regulation

Following on a controversial advance notice of proposed rulemaking, the CFPB has now released an NPR setting specific standards for credit-card late fees that also eliminates the inflation adjustments established by the Federal Reserve when implementing the 2009 credit-card law. The NPR also seeks comment on still more stringent late-fee restraints and limits on some or all of the other penalty fees now charged by some credit-card issuers. When issuing the ANPR, the Bureau also noted that it plans to advance other initiatives under its “junk-fee” standards, likely starting with those pursuant to the Electronic Funds Transfer Act affecting a wide range of payment and transaction-account products. Should it then follow the model proposed here for credit cards, significant alterations in current business practice could occur with uncertain consumer benefits despite nominal upfront savings.

CREDITCARD36.pdf…

7 02, 2023

DAILY020723

Eliza Allen2023-02-07T16:53:41-05:00February 7th, 2023|2- Daily Briefing|

CFPB Extends Digital Marketing Reach To “Pay-To-Play” Platforms

Expanding its reach to other forms of digital marketing (see FSM Report FINTECH30), the CFPB today issued an advisory opinion stipulating that what it calls “pay-to-play” consumer platforms presenting mortgage and settlement options are likely to violate the law.

High-Impact Fed Charter Policy Takes Effect

The Federal Register today includes the FRB’s policy statement rejecting the “states as laboratories for change” construct by conforming state member bank powers largely only to those authorized for national banks. The statement is now effective.

GOP, Democrats Vie for Toughest Anti-China Stance

As we anticipated, at today’s full HFSC Committee hearing on China, Chairman McHenry (R-NC) made it clear that he intends action addressing emerging financial and economic risks, reiterating principles such as a commitment to free markets, opposing policies that stifle innovation, and preventing “malign” financial activities or interests.

Barr Backs Short-Term, Small Dollar Lending, Flexible Public-Welfare Option

In remarks today, Fed Vice Chair Barr stressed the need to eliminate discrimination in banking, noting the importance of the CRA rewrite (see FSM Report CRA32) to address redlining and community development. However, he was silent as to the date by which the agencies are likely to issue the long-awaited final rule.

Daily020723.pdf…

23 01, 2023

M012323

Eliza Allen2023-01-23T11:10:06-05:00January 23rd, 2023|6- Client Memo|

How the CFPB Plans to Rule by Registry

Last week, we provided clients with an in-depth analysis of the CFPB’s latest nonbank registry as well as a hard look at its impact on mortgage securitization. Any nonbank subject to the CFPB will find its legal arsenal much depleted by the registry’s requirements, a point already well understood by opponents. Far less noticed but of still greater consequence to all consumer-finance companies is another implication of the Bureaus actions here and in another recent registry proposal: even where the CFPB has little to no regulatory authority, it will deploy its formidable ability to gain public attention to make unbearable the reputational risk of any practice it abhors.

m012323.pdf…