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 …

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 …

4 04, 2024


2024-04-04T17:00:02-04:00April 4th, 2024|2- Daily Briefing|

Hsu, Gruenberg Skirt CRA Legal Battle

The CRA-related remarks today from Acting Comptroller Hsu and Chair Gruenberg were considerably more muted than those yesterday from Vice Chair Barr, although Mr. Gruenberg expressly defends the new rule despite the pending legal challenge.

FRB-NY: Life, P&C Insurance Poses Climate Risk to Financial Markets

The Federal Reserve Bank of New York yesterday posted a brief focusing on financial-market risk due to climate change, concluding that there is some of potentially systemic magnitude.  This finding is based on a nine-month-old staff report focusing specifically on the insurance sector.

FDIC Presses Banks to do More in LMI Communities

Previewed in remarks by Chair Gruenberg this morning, the FDIC today released its economic inclusion strategic plan calling on banks to invest in LMI and underbanked communities.


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.


22 03, 2024


2024-03-22T16:13:11-04:00March 22nd, 2024|2- Daily Briefing|

Banking Agencies Push Back Key Deadline

Easing a bit of burden and doubtless with litigation in mind, the banking agencies today issued an interim final rule extending the applicability date of facility-based assessment areas and public file provisions of the CRA rule from April 1, 2024 to January 1, 2026.  With this change, the manner in which assessment areas are evaluated is aligned to the same deadline.  The IFR also includes non-substantive revisions to the final rule.

HFSC GOP Calls for GAO Interchange Fee Study

Following introduction of HFSC Subcommittee Chair Luetkemeyer’s (R-MO) bill (H.R. 7531) to require the Fed to conduct a qualitative impact study of the interchange fee proposal, he and Subcommittee Chair Barr (R-KY) yesterday sent a letter to the GAO requesting a study of the potential impacts of the proposal (see FSM Report INTERCHANGE12).  The members state that the proposal would cause banks and credit unions to face “material obstacles” to offset the regulatory, anti-fraud, and operating costs for extending banking services to low-balance consumers, with the proposal also raising “unique concerns” because the Fed offers competing payment services.  The members request that the GAO’s analysis examine the rule’s effects on consumer access to checking account services with regards to minimum balance costs, increases in ancillary fee revenue, LMI population access, and the cumulative impacts of agency rules since January 1, 2023 affecting debit accounts.

Barr Concedes Capital Rules Will Change

Ending speculation that Vice Chair Barr will not accede to Chair Powell’s end-game …

21 03, 2024


2024-03-21T17:00:13-04:00March 21st, 2024|2- Daily Briefing|

FDIC Plans Merger Squelch

Both the policy and politics of the FDIC’s proposed merger policy follow that of its 2022 RFI (see FSM Report MERGER9), a very stringent approach to bank-merger review that split the FDIC 3-2 on party lines.  We will shortly provide clients with an in-depth analysis of the proposed approach, approved on a 3-2 vote.  It tracks much in the OCC’s proposal (see FSM Report MERGER14) but is still more stringent in several key areas.  Notably, it does not rely on qualitative financial-stability considerations, instead setting a $100 billion threshold for additional scrutiny.

Chopra Wants Far Tougher Bank-Merger Policy

CFPB Director Chopra elaborated today on his comments at the FDIC meeting, saying that he thinks the proposal is fine as far as it goes but that federal policy should go considerably further to curtail bank consolidation.  Actions he advocates include hard caps on bank growth and size (presumably meaning a limit on organic growth as well as via acquisition) and a roll-back of the systemic exemption in failing-bank acquisitions to block any future JPM/FRC-style transactions.


7 02, 2024


2024-02-07T17:14:25-05:00February 7th, 2024|2- Daily Briefing|

Fed Study: 96 CRA Reforms Had No Impact on Bank LMI Lending, Subprime Crisis

As banks take on the new CRA rule in the courts (see FSM Report CRA32), a new Fed study suggests that prior CRA changes had no meaningful impact on LMI mortgage lending in assessment areas and did not cause the subprime crisis as a prior study asserted.

NYCB’s Prospects, Policy and Political Consequences

After the markets closed, NYCB was up a bit from its lows, but it remains to be seen if this is a “dead-cat bounce” or stabilization. Regardless, the company’s market capitalization is down 57 percent since it surprised markets with unexpectedly-bad results.


1 02, 2024


2024-02-01T16:56:10-05:00February 1st, 2024|2- Daily Briefing|

CRA Rules Finally Go Live

The Federal Register today contains the OCC, FDIC, and FRB’s CRA final rule over three months after it was approved last October. The effective date of April 1 is unchanged and the regulation is now official; anyone contemplating litigation can begin formal proceedings.

Congress Takes on SEC Crypto-Custody Accounting

As anticipated, Sen. Lummis (R-WY) has today introduced a resolution to overturn the SEC’s staff accounting bulletin (SAB) 121 via the Congressional Review Act (see FSM Report CUSTODY5).  Reps. Nickel (D-NC) and Flood (R-NE) have introduced an identical resolution in the House, with HFSC Chairman McHenry (R-NC) already making clear that he intends to support the measure.


10 01, 2024


2024-01-10T17:00:41-05:00January 10th, 2024|2- Daily Briefing|

HFSC’s HUD Hearing to Trod Partisan Ground

HFSC’s majority staff memo on Thursday’s hearing with HUD Secretary Fudge makes it still clearer that the session will focus on affordable housing, homelessness, and public-housing agencies in cities such as New York and Washington, D.C.

HFSC GOP Slams DOL Fiduciary Rule

At today’s HFSC Capital Markets Subcommittee hearing on the DOL’s Fiduciary Rule, Subcommittee Chairwoman Wagner (R-MO) argued that the proposal should be withdrawn, calling it a partisan effort to eliminate “junk fees.”

HFSC Takes Partisan Approach to FSOC

At today’s HFSC Digital Assets Subcommittee hearing on FSOC’s systemic-designation framework (see FSM Report SYSTEMIC98), Subcommittee Chairman Hill (R-AR) questioned FSOC’s approach to addressing systemic risk, claiming that the Council’s revised guidance is vulnerable to abuse and unintended consequences.

CFPB Small-Business Reg Survives

Senate Republicans tried today to override the President’s veto of the Congressional Review Act resolution approved by both Houses of Congress to repeal the CFPB’s small-business reporting rule.


20 12, 2023


2023-12-20T16:49:55-05:00December 20th, 2023|2- Daily Briefing|

CFPB Small-Business Reporting Reg Remains

In conjunction with his expected veto last night of legislation that would have overturned the CFPB’s small-business reporting rule, President Biden indicated that the Bureau’s rule is central to CRA implementation and would bring transparency to small-business lending.

FSB, IOSCO Try Get-Tough Approach to OEF Illiquidity

As promised, the FSB and IOSCO today finalized recommendations designed to enhance OEF resilience.

HFSC GOP Demands CFPB Nonbank Delay, Clarification

HFSC Chairman McHenry (R-NC) and nineteen Committee Republicans sent a letter to CFPB Director Chopra urging the Bureau to extend by thirty days the comment deadline for its proposal to supervise large nonbank payment providers (see FSM Report PAYMENT27).

FERC Passive-Ownership Inquiry Poses Challenges to Funds, Banks

The Federal Energy Regulatory Commission has opened another avenue scrutinizing the extent to which large asset managers may control the companies in which they invest.

FDIC Approves Significantly Revised Sign, Advertising Standards

The FDIC Board today unanimously approved a final rule modernizing requirements for use of the FDIC’s official sign and clarifying what constitutes misrepresentation and misuse of the FDIC’s name or logo.


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