#Cryptoassets – Page 3 – Federal Financial Analytics

6 07, 2023

DAILY070623

Eliza Allen2023-07-06T16:55:22-04:00July 6th, 2023|2- Daily Briefing|

Basel Redesigns Global Bank-Supervision Construct

As promised at its last meeting, the Basel Committee today released a public consultation on revisions to its 2012 core supervisory principles (see FSM Report REFORM92).

Accommodative CRE Policy Goes Live

Publication in the Federal Register today makes effective a finalized policy statement issued by the banking agencies and NCUA late last week on how financial institutions are to handle troubled commercial real estate (CRE) loans.

Senate Dems Demand CFPB Voice-Cloning Action

Following his letter to large bank CEOs regarding AI fraud, Chairman Brown (D-OH) along with Sens. Menendez (D-NJ), Reed (D-RI), and Smith (D-MN) today sent a letter to Director Chopra urging action against AI-related financial scams.

FSB Turns to GSIB Resolvability

The FSB’s plenary today announced that recent events have spurred it to assess the resolvability of GSIBs and other large banks, providing neither timeline nor focus for this work.

FRB-NY Study Advances Wholesale Digital Currency

Although making clear that it sets no new policy nor endorses any CBDC action, the Federal Reserve Bank of New York’s Innovation Center published a DLT proof-of-concept finding that shared ledgers can effectively support both wholesale domestic interbank and cross-border payments.

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14 06, 2023

CONSUMER51

Eliza Allen2023-06-14T16:55:35-04:00June 14th, 2023|5- Client Report|

Chopra Holds His Own Under GOP SVB, Consumer-Protection Attack

With Rep. Andy Barr (R-KY) leading the attack with an accusation of CFPB “McCarthyism,” today’s HFSC hearing with Director Chopra tracked much in yesterday’s Senate Banking session. As before, Republicans strongly attacked the credit-card late-fee proposal (see FSM Report CREDITCARD36) and new small-business reporting requirements. However, the lengthy session also allowed Members on both sides of the aisle to probe issues to which Senate Banking failed to turn. One of these was the FDIC’s decision to establish bridge banks for SVB and Signature and to sell FRC to JPM. Mr. Chopra vigorously denied any role of what some have called progressive ideology in opposing bids for SVB, noting also systemic concerns at that time partly due to fears about Credit Suisse. The agency’s controversial data-rights proposal will be out in October, with Director Chopra saying also that the proposal covers nonbanks by virtue of the data to be covered. Provider cyber-security will also be addressed. This report covers additional high-impact issues at the hearing including AI, UDAAP, and systemic designation.

CONSUMER51.pdf…

8 06, 2023

DAILY060823

Eliza Allen2023-06-08T16:56:17-04:00June 8th, 2023|2- Daily Briefing|

Bills Advanced re Emergency M&A, FDIC Ceiling

The Congressional Record today includes two Democratic bills with possible prospects despite House GOP control.

CFPB Extends Data Broker RFI Deadline

The CFPB today extended the comment deadline on its RFI inquiring about the business models and practices of data brokers.

Treasury Fairness/Compliance Initiative Targets Government Payments

Treasury today issued a new policy on promoting fair and effective compliance via a memorandum from Deputy Secretary Adeyemo.

Gensler Doubles Down On SEC Crypto Policy

In remarks today implicitly rebutting GOP assertions that the SEC has gone too far and new law expanding CFTC authority is needed, SEC Chairman Gensler strongly reasserted that most cryptoassets are securities subject to SEC oversight.

Bank Regulators, CFPB Encourage Appraisal Revaluation

Reflecting ongoing efforts to address appraisal bias, the banking agencies and the CFPB today proposed new interagency guidance on reconsiderations of value (ROV) for residential real estate, outlining the risks of deficient valuations and highlighting policies addressing them.

Daily060823.pdf…

22 05, 2023

DAILY052223

Eliza Allen2023-05-22T16:53:15-04:00May 22nd, 2023|2- Daily Briefing|

HFSC Set To Tackle LLPAs, GSE Policy

As noted, HFSC tomorrow will grill FHFA Director Thompson. Republicans will surely emphasize their opposition to recent LLPAs laid out at a subcommittee hearing last week; Democrats will continue to defend them.

Americans Struggle With Inflation, Savings; Bank Use Stable

Although the Fed’s latest economic well-being study has grim macro results with significant political consequences, it also finds that 94 percent of Americans in 2022 had banking relationships, an unchanged rate from 2021 although gaps remain by age, race, ethnicity, and disability.

Kashkari Disputes Need For Broad Reg Rewrite If Big-Bank Capital Goes Way Up

Renewing his campaign to hike large-bank capital ratios, FRB-Minneapolis President Neel Kashkari today said that higher capital requirements would have prevented recent failures and that additional, over-complex rules are poor substitutes for them.

Daily052223.pdf…

15 05, 2023

DAILY051523

Eliza Allen2023-05-15T17:23:44-04:00May 15th, 2023|2- Daily Briefing|

Yellen Highlights Investor – Not Uninsured-Deposit – Runs, Buoys Sector Mergers

In an interview over the weekend, Treasury Secretary Yellen struck a decidedly different tone on bank mergers than voiced in the Administration’s policy prior to recent failures.

Gensler Outlines Top Financial Stability Concerns

In remarks today, SEC Chair Gensler outlined his financial-stability priorities.

Failed-Bank CEOs Defend Themselves, Contest Need For Receivership

Ahead of testimony tomorrow before Senate Banking, the CEOs of SVB and Signature have filed statements defending their actions and those of their colleagues.

FHFA Seeks Views On New Pricing Framework

Following last week’s announcement that it would postpone its controversial decision to retain an upfront fee related to a borrower’s debt-to-income level, the FHFA today released a Request for Input on the Enterprises’ single-family pricing framework as well as the process for setting their upfront guarantee fees.

Barr Stands His Supervisory, Regulatory Ground

Vice Chairman Barr’s testimony for Congressional hearings this week has just been released along with the Board’s 2023 supervision-and-regulation report.

Gruenberg Sticks To His Guns

FDIC Chairman Gruenberg’s Congressional testimony largely recounts prior statements about the condition of the banking system, recent bank failures, the new special-assessment proposal (see FSM Report DEPOSITINSURANCE120), and the agency’s deposit-insurance reform conclusion (see Client Report DEPOSITINSURANCE119).

Daily051523.pdf…

27 04, 2023

DAILY042723

Eliza Allen2023-04-27T17:05:53-04:00April 27th, 2023|2- Daily Briefing|

House GOP Presses Entirely New Digital Asset Jurisdictional Framework

Before today’s HFSC Subcommittee session on digital asset regulatory gaps began, full committee Chairman McHenry (R-NC) and House Ag. Committee Chairman Thompson (R-PA) along with Reps. Hill (R-AR) and Johnson (R-AL) issued a joint statement emphasizing that inter-committee collaboration will characterize future legislative efforts and announcing that the committees will hold a joint hearing next month. Opening the hearing, Subcommittee Chairman Hill argued that Congress must act to resolve definitional and jurisdictional disagreements between the SEC and CFTC. He also called for a disclosure regime tailored to the specific needs of digital asset purchasers. Ranking Member Lynch (D-MA) sided with SEC Chairman Gensler’s views that most digital assets are securities and also defended the current regulatory regime.

Daily042723.pdf…

20 04, 2023

DAILY042023

Eliza Allen2023-04-20T17:02:29-04:00April 20th, 2023|2- Daily Briefing|

Reed-Grassley Bill Lays Out Another Clawback Construct

Sens. Reed (D-RI) and Grassley (R-IA) introduced yesterday S. 1181, a bill allowing the FDIC to claw back the prior two years of failed bank executive compensation and prohibits them from working at another financial institution for at least two years.

FRB-NY Staff Find Severe Climate Risk At Big Four U.S. Banks But We Wonder

Based on a more in-depth study, a new FRB-NY post measures the market risk to financial institutions related to climate change.

FSB Report Shows Growing Supervisory Interest In Climate-Related Compensation Frameworks

A new FSB report on climate-related financial risk factors in compensation frameworks across the banking, insurance and asset management sectors concludes that financial institutions will need to continuously revise their climate-related criteria to ensure effective alignment of compensation with prudent risk management.

Brown Presses For Stringent FHLB Mission Standards

Following considerable furor over the role of the FHLBs in recent bank failures, Senate Banking Chairman Brown (D-OH) has written to FHFA Director Thompson requesting that the agency’s planned FHLB report also include a detailed assessment of this issue.

Waller Sees Promise In Tokenization, AI

Following prior comments about crypto risk, FRB Gov. Waller today highlighted two innovations he believes may well have natural use cases if their risks can be contained or mitigated.

Fed Study: Bank Enforcement Action Resolution Improves Minority Lending Outcomes

A new Federal Reserve paper concludes that enhancing bank loan and internal governance policies is critical to improving access to credit for minority …

18 04, 2023

DAILY041823

Eliza Allen2023-04-18T17:03:30-04:00April 18th, 2023|2- Daily Briefing|

FRB-NY Finds NBFIs a Source of Systemic Risk Over the Centuries

Reflecting renewed interest in “narrow banks,” the Federal Reserve Bank of New York blog posted evidence of systemic risk from nonbanks in the absence of any banks at all.

Stablecoin Compromise Faces Steep Challenges

As noted yesterday, HFSC’s Digital Asset Subcommittee is set for a Wednesday hearing clearly intended to lay the groundwork for near-term action on Chairman McHenry’s (R-NC) longstanding goal of enacting stablecoin legislation.

Despite Failures, DIF Restoration Ahead Of Schedule

At the FDIC Board’s meeting today, FDIC staff said that – while the timing for restoring the DIF to its 1.35% statutory minimum remains uncertain – the DIF could reach its statutory minimum ahead of time and by 2024.

Bowman Remains Staunch CBDC Skeptic

Reiterating that any U.S. CBDC requires Congressional approval, Gov. Bowman today also reiterated her longstanding skepticism to any such instrument.

CFPB Plans Timing Study to Buttress Junk-Fee Regs

The Federal Register today includes a CFPB comment request on its “Junk Fees Timing Study,” which would be part of a series of online lab experiments testing differences in consumer choices across different information presentations.

Warren, Reed Demand OFR Use Subpoenas To Obtain Systemic Data

Sens. Warren (D-MA) and Reed (D-RI) today urged OFR Acting Director Martin to fill data gaps around financial stability risks posed by climate change, cryptocurrencies, and repo markets.

Daily041823.pdf…

9 03, 2023

DAILY030923

Eliza Allen2023-03-09T16:52:09-05:00March 9th, 2023|2- Daily Briefing|

Barr Emphasizes Steep Barriers to Bank Crypto, Retail CBDC

In remarks today, FRB Vice Chair Barr reiterated that banks should take an extremely cautious approach when engaging with cryptoassets or counterparties and stressed the need to include stablecoins within the regulatory perimeter. For the first time, the Fed made it clear that, while it is open to DLT, smart-contract, and similar payment-system innovations, it is dubious that any will have near-term benefits and all require careful regulatory design.

Expected Battle Lines Form Over CFPB Future

As predicted, today’s HFSC Subcommittee hearing on the CFPB was a partisan and raucous session, with Republicans focusing most strongly on legal and constitutional issues around the Bureau’s funding and enforcement authority and Democrats defending both its legality and effectiveness. Much will come of this in terms of HFSC and floor votes, but we expect no statutory change in this Congress under this President.

Hill Sets Table for Bipartisan Crypto Action

Today’s Digital Assets Subcommittee hearing was considerably more conciliatory than the CFPB session earlier today, with Chairman Hill (R-AR) making clear in his opening statement that he is not launching a partisan attack against the SEC, the banking agencies, or the White House. He hopes instead to press bipartisan legislation, thanking former Chair Waters (D-CA) for her work on stablecoins and emphasizing the need not only for new law there, but also across the array of pending digital-asset questions.

Daily030923.pdf…

6 03, 2023

DAILY030623

Eliza Allen2023-03-06T16:54:30-05:00March 6th, 2023|2- Daily Briefing|

GOP Revs Up Fight Vs. Big-Bank Capital Hikes

Firing a fusillade ahead of capital rewrites expected late this month, Senate Banking Republicans late Friday sent FRB Chairman Powell a letter arguing strongly against capital increases and laying out a strong view that the agencies are required by law to tailor key standards.

BIS Project Finds Retail-CBDC Cross-Border Benefits

In a project boosting retail CBDC, the BIS Innovation Hub today announced the results of Project Icebreaker, a cross-border retail CBDC pilot between Sweden, Norway, and Israel.

GOP Will Deploy IGs To Demand Fed, CFPB, SEC Reform

In addition to a hearing that morning with Chairman Powell, the full HFSC will call federal banking agencies on the carpet Wednesday for “wasteful” spending and other governance issues.

Dems Beg Gensler Not to Scrap Scope 3 Climate Disclosures

Responding to intense GOP opposition to the SEC’s climate disclosure proposal, fifty Congressional Democrats led by Sen. Warren (D-MA) sent a letter to SEC Chairman Gensler today urging him not to scale the proposal back, especially its Scope 3 provisions.

Treasury Wants Fast NBFI, OEF, Crypto Standards

Treasury International Affairs Under-Secretary Jay Shambaugh today outlined U.S. priorities, emphasizing not only the importance of containing Russia and countering new threats, but also quickly advancing numerous global initiatives.

Hsu Pushes To Start The End Game

Acting Comptroller Hsu today reiterated his determination to act as quickly as possible on Basel’s end-game rules, noting the interagency statement last year that this would soon be done without providing …