18 05, 2023


2023-05-18T16:16:02-04:00May 18th, 2023|5- Client Report|

Federal Regulators Lose Ground as Senate Banking Reviews Recent Failures

Describing the CEOs’ statements at his last hearing as “the dog-ate-my-homework” excuses for grievous failings, Senate Banking Committee Chairman Brown (D-OH) also attacked Republicans for placing blame on monetary policy, not the culture of supervisory laxity he details with various quotes from Trump Administration officials.  Still, the panel’s legislative agenda seems limited to the executive-clawback measure we projected as the most likely outcome immediately after the mid-March failures (see Client Report REFORM218).  Sen. John Kennedy (R-LA) countered that Vice Chairman Barr’s attribution of blame to Randy Quarles is the Fed coming up with a similarly-lame excuse for its recent failings.


12 04, 2023


2023-04-12T16:47:09-04:00April 12th, 2023|1- Financial Services Management|

Executive-Compensation Clawbacks

Executive compensation incentives have proved among the most important reform priorities in the wake of recent bank failures.  In addition to efforts to complete long-delayed regulations mandated by the Dodd-Frank Act, bipartisan Members are pressing different approaches to clawing back compensation from failed-bank executives who appear to have profited handsomely despite allowing or even encouraging untenable risks.  One major, recent measure would not only grant the FDIC express clawback authority in the wake of non-systemic resolutions, but also expand clawbacks to a wide range of persons affiliated with the failed bank and to holding-company investors. 


3 04, 2023


2023-04-03T11:02:55-04:00April 3rd, 2023|3- This Week|

Ready for a Recess?

We certainly are after the last three weeks! But, while Congress may be away until the middle of April, the FRB and FDIC will be hard at work writing reports that, for all their promised rigor, are likely to target specific failings at individual offices for the “idiosyncratic” risks and super-bad management that the agencies believe were largely the reason for SVB, Signature, and Silvergate’s demise. Following the White House’s lead, the agencies in concert with the OCC will also lay the groundwork for rapid-fire action on a raft of rules as soon as these reports are released.


29 03, 2023


2023-03-29T17:27:51-04:00March 29th, 2023|5- Client Report|

HFSC Focuses on Supervision, Clawbacks, Process, New Resolution and Run-Risk Options

Today’s HFSC hearing on recent bank failures was more partisan than yesterday’s Senate Banking session (see Client Report REFORM217).  Still, there were significant areas of agreement evidenced not only through the marathon hearing, but also at its end, when Chairman McHenry (R-NC) and Ranking Member Waters (D-CA) agreed that they are frustrated with the regulators’ testimony, want more supervisory accountability, and will demand reforms once promised internal investigations are concluded.  Several new issues were brought out today, including why the FedWire closing times precluded liquidity support that might have sustained SVB liquidity, whether TLAC should be required at banks of all sizes, tactics to quell viral runs, and whether tough new rules will cover mid-sized banks and/or community institutions.


29 03, 2023


2023-03-29T17:30:21-04:00March 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.


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