#CRA – Federal Financial Analytics

15 03, 2023

DAILY031523

Eliza Allen2023-03-15T16:58:30-04:00March 15th, 2023|2- Daily Briefing|

Waters Reiterates ICE/BKI Opposition

HFSC Ranking Member Waters (D-CA) released a statement today applauding the FTC’s move to block Intercontinental Exchange from acquiring the mortgage software company Black Knight.

Progressives Press For Tailoring Redo

Cementing prior denouncements of 2018 Dodd-Frank “rollbacks” into legislative action, 17 Democratic senators and 31 House Members today took direct aim at Trump-era banking policy by introducing legislation that would repeal Title IV of the Economic Growth, Regulatory Relief, and Consumer Protection Act.

Bowman Presses Small-Bank Mergers, Climate Caution, Third-Party Guardrails

In remarks today, FRB Governor Bowman noted that delays in merger reviews cause significant operational and reputational risks and suggested considering all competitors when evaluating a small bank merger’s competitive effect to reduce delays.

New CFPB RFI Brings Data Brokers Under Scrutiny

Ahead of a planned rulemaking, the CFPB today released an RFI seeking comments on the business practices of data brokers, focusing on new business models to determine if certain practices fall under the scope of FCRA.

Warren, Blumenthal Call on DOJ, SEC to Investigate SVB

Although media reports indicate that an investigation is already under way, Sens. Warren (D-MA) and Blumenthal (D-CT) sent a letter today to Attorney General Garland and SEC Chairman Gensler urging them to investigate senior SVB officials if they are not already doing so.

FHFA Delays New DTI-Based Upfront Fee

Following an announcement this January that FHFA would implement changes to Fannie and Freddie’s single-family pricing framework, Director Thompson today announced that the Agency will delay the effective …

7 03, 2023

FEDERALRESERVE72

William Cross2023-03-07T16:06:02-05:00March 7th, 2023|5- Client Report|

Battle Lines Form Over Capital Rewrite

Although Chairman Powell’s testimony kept exclusively to monetary policy, today’s Senate Banking hearing seemed only to go through the motions set at previous hearings with regard to inflation, growth, and the Fed’s long-term objectives. Real energy was reserved for regulatory-policy questions, most notably future bank capital standards. As anticipated, Republicans were unified in a series of questions all focused on the extent to which Chairman Powell will allow Vice Chairman Barr’s holistic-capital exercise to result in the higher capital standards Mr. Barr says are warranted for the largest banks.

FEDERALRESERVE72.pdf…

6 03, 2023

M030623

Eliza Allen2023-03-06T16:31:40-05:00March 6th, 2023|6- Client Memo|

Why Way-Woke Won’t Work in 2023

The fact that both the House and Senate passed a Congressional Review Act resolution overturning the Department of Labor’s ESG standards makes it clear that striking an anti-woke blow is deemed good politics by red and purple politicians. The President’s certain veto also makes it clear that a blue man sees matters quite differently, as did 204 House Democrats and 46 of their Senate colleagues. This stalemate will continue for changes to federal law, but it won’t stop Republicans from taking a lot out on financial regulators and big banks that they can’t get into the law books. Thus, anyone deemed even a bit woke-ful will get an earful.

M030623.pdf…

6 03, 2023

Karen Petrou: Why Way-Woke Won’t Work in 2023

Arezou Rafikian2023-03-06T16:31:48-05:00March 6th, 2023|The Vault|

The fact that both the House and Senate passed a Congressional Review Act resolution overturning the Department of Labor’s ESG standards makes it clear that striking an anti-woke blow is deemed good politics by red and purple politicians. The President’s certain veto also makes it clear that a blue man sees matters quite differently, as did 204 House Democrats and 46 of their Senate colleagues. This stalemate will continue for changes to federal law, but it won’t stop Republicans from taking a lot out on financial regulators and big banks that they can’t get into the law books. Thus, anyone deemed even a bit woke-ful will get an earful.

Even if all these excoriations are only rhetorical, they will prove meaningful because even federal regulators immune from the appropriations process are susceptible to political influence – as well they should be if they are not also to be unaccountable. That anti-wokeness is already making its mark is evident in many ways, most recently in the inter- agency crypto-liquidity risk statement at great pains to refute any Republican suggestion that tough new standards amount to a blanket ban on engaging in any form of legal cryptoasset activity. In essence, the new statement says, “banks can do crypto if it’s legal, but they almost surely shouldn’t do crypto because it’s way risky and we’re watching.”

To be sure, anything crypto isn’t always toxic. Another way the agencies will handle accusations that they are conducting a stealth-woke anti-crypto campaign is to make it …

27 02, 2023

DAILY022723

Eliza Allen2023-02-27T16:39:49-05:00February 27th, 2023|2- Daily Briefing|

FRB-NY: CRA Now Makes No Measurable Difference

As the banking agencies wrestle with their still-unfinished CRA rule (see FSM Report CRA32), the Federal Reserve Bank of New York today released a staff report concluding that the law has little to no impact on like-kind household credit in target areas. Using data available only to the Fed, the report finds that banks largely meet CRA in target areas by acquiring existing mortgage loans, not making new ones.

SCOTUS Re CFPB Has Broad Ramifications

In a case with significant implications not only for the CFPB, but also other financial agencies, the Supreme Court today agreed to review the Fifth Circuit’s decision invalidating CFPB funding via transfers from the Federal Reserve’s income rather than annual Congressional appropriation.

CFPB Puts A Repeat Offender Out Of Business

Wielding the hammer Director Chopra claimed when he announced his campaign against repeat offenders, the CFPB today used the powers it argues derive from its authorizing law (see FSM Report CONSUMER14) to put a nonbank mortgage lender out of business. In this case, RMK Financial was found to have persistently violated a 2015 agreement under consumer-finance laws and rules to mislead veterans about the terms of their VA and FHA mortgages.

Daily022723.pdf…

22 02, 2023

DAILY022223

Eliza Allen2023-02-22T16:44:44-05:00February 22nd, 2023|2- Daily Briefing|

BIS Backs Away From Old CBDC, Presses New “Unified Ledger”

BIS General Manager Agustín Carstens today distanced the global central bank somewhat from its prior calls for two-tier CBDC as quickly as possible (see Client Report CBDC6).

Administration Drops FHA Premiums in Broad Housing Push

In a victory for mortgage lenders and defeat for private mortgage insurance and the GSEs, Vice President Harris announced that FHA will shortly reduce mortgage premiums by .30 percent, saving the average homeowner $800 in total premiums or $67 a month.

GOP Opens Anti-CBDC Campaign

Starting the GOP’s 2023 campaign against CBDC with a specific initiative, Rep. Tom Emmer SP (R-MN) and nine Republicans have introduced H.R. 1122.

FDIC Found Remiss re Systemic Resolution

In its assessment of challenges facing FDIC leadership, the Office of Inspector General (OIG) finds that the agency may not be ready to handle an OLA or systemic resolution, nor is it yet able to assess climate financial risk and sanctions compliance.

FHFA Looks Into FHLB-Member Community Activities

Perhaps advancing FHFA Director Thompson’s commitment to review aspects of the FHLB System, her agency today released a request for views on the extent to which a Home Loan Bank member supported its community to retain eligibility for long-term System advances.

Daily022223.pdf…

10 02, 2023

DAILY021023

Eliza Allen2023-02-10T17:02:31-05:00February 10th, 2023|2- Daily Briefing|

Waller Reiterates Fed’s Wary Cryptoasset Policy

In remarks today, FRB Governor Waller reiterated the Fed’s wary approach to cryptoassets, repeating the Fed’s requirements (see FSM Report CRYPTO31) for banks that wish to engage with crypto customers or activities. Following the collapse of FTX and its ripple effect on banks such as Silvergate (see Client Report CRYPTO38), Mr. Waller stressed that banks engaging with crypto customers must have a thorough understanding of their client’s business models, risk management systems and corporate governance.

Hsu Reprises, Expands Bank Merger Reform

In remarks today, the OCC Chief Counsel on behalf of Acting Comptroller Hsu stressed the need to update competition metrics, financial stability considerations, and community assessments in bank merger reviews, but gave no indication of when new merger policy may be finalized. Mr. Hsu argued that while HHI is an objective and transparent metric, it is no longer suitable for measuring competition because its deposit share-based approach fails to capture the competitive effect of nonbanks and online banking.

FHFA Outlines Substantive FHLB Reform Agenda

As anticipated earlier this week, FHFA Director Thompson today called the status quo of the FHLB system unacceptable and said that FHFA will make “meaningful” recommendations to improve the sector. This will take shape in a report following completion of FHFA’s roundtable series concluding in March. FHFA’s report will make statutory recommendations to Congress and lay out its own regulatory objectives, perhaps starting with an ANPR and/or regulatory guidance or supervisory actions.

Daily021023.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…

21 12, 2022

FedFin on: Nonbank Enforcement-Order Registry

Arezou Rafikian2022-12-21T16:54:37-05:00December 21st, 2022|The Vault|

The CFPB is proposing to create a public registry of certain enforcement actions that would initially cover nonbanks (including BHCs) with a goal of drawing public and enforcement-agency attention to what the Bureau’s director calls “serial offenders.” …

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

21 12, 2022

CONSUMER47

Eliza Allen2022-12-21T15:27:45-05:00December 21st, 2022|1- Financial Services Management|

Nonbank Enforcement-Order Registry

The CFPB is proposing to create a public registry of certain enforcement actions that would initially cover nonbanks (including BHCs) with a goal of drawing public and enforcement-agency attention to what the Bureau’s director calls “serial offenders.” The new filings would be extensive and likely expensive in terms not just of the filings, but also of the analytical processes needed to ensure accuracy and the internal controls assuring officers making requisite attestations that their statements are complete and accurate. Public disclosure of much in the filings – including information that companies consider confidential – would make it easier for other enforcement agencies to identify institutions that may also have violated their own standards as well as alert state and federal banking agencies to entities under their supervision with potential compliance and risk-management shortcomings.

CONSUMER47.pdf…