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17 06, 2022

DAILY061722

2023-01-26T11:48:59-05:00June 17th, 2022|2- Daily Briefing|

Powell Ponders the Dollar
In remarks today at a conference on the dollar’s reserve-currency status, Chairman Powell highlighted Fed actions to ensure that the dollar is not only an essential global payment instrument, but also a stable one.

Republicans Prepare to Investigate SEC over Climate-Risk Disclosures
In a letter to SEC Chairman Gensler, Senate Banking Republicans upped their campaign against the SEC’s proposed climate disclosure rule, asking the Chairman to provide all written communication related to it.

Chopra Redoubles Plans for Innovative Standard-Setting, Tough New Rules
In a sweeping statement today, CFPB Director Chopra strongly defended his agency’s unusual approach to recent guidance and rulemakings as well as detailed ongoing priorities.

BIS Announces New Crypto, Cybersecurity, and Green Finance Projects
The BIS Innovation Hub today updated its 2022 work program with several new projects on cryptocurrency, cybersecurity, green finance, and CBDC.

Daily061722.pdf

1 06, 2022

FedFin: AI Adverse-Action Requirements

2023-02-21T12:52:57-05:00June 1st, 2022|The Vault|

Continuing its use of novel rulings that preclude public notice and comment, the CFPB has issued a landmark ruling on artificial intelligence (AI) and other forms of algorithmic underwriting stipulating lender responsibility for sending out the adverse action notices required under the Equal Credit Opportunity Act (ECOA).  The CFPB recently added a broader range of credit decisions on outstanding loans (e.g., granting or reducing lines), to these notice requirements, making the reach of this new policy still broader.  Lenders are responsible for adherence to these requirements even if their underwriting models are provided by third parties or credit decisions are made by third parties such as fintechs or auto dealers.  However, when these nonbanks are the lender, they are then subject to CFPB enforcement even if the Bureau does not have formal supervisory power over them under another recent CFPB ruling…

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

1 06, 2022

FAIRLEND11

2023-02-21T12:52:48-05:00June 1st, 2022|1- Financial Services Management|

AI Adverse-Action Requirements

Continuing its use of novel rulings that preclude public notice and comment, the CFPB has issued a landmark ruling on artificial intelligence (AI) and other forms of algorithmic underwriting stipulating lender responsibility for sending out the adverse action notices required under the Equal Credit Opportunity Act (ECOA).  The CFPB recently added a broader range of credit decisions on outstanding loans (e.g., granting or reducing lines), to these notice requirements, making the reach of this new policy still broader. Lenders are responsible for adherence to these requirements even if their underwriting models are provided by third parties or credit decisions are made by third parties such as fintechs or auto dealers. However, when these nonbanks are the lender, they are then subject to CFPB enforcement even if the Bureau does not have formal supervisory power over them under another recent CFPB ruling. The press release accompanying the circular also includes more sweeping statements about broader fair-lending compliance obligations when using these underwriting systems.

FAIRLEND11.pdf

24 05, 2022

DAILY052422

2023-02-21T13:49:08-05:00May 24th, 2022|2- Daily Briefing|

BIS Committee Fears Debt Build-Up Poses Systemic Risk

The BIS Committee on the Global Financial System has concluded that sharp increases in household and corporate debt pose increasing systemic risk.

CFPB Creates New Competition Office, Plan

Reflecting its director’s continuing focus on consumer-finance competition, the CFPB today recast an office that previously encouraged “sandbox” product launches into an office focused principally on enhancing the ability of small firms and start-ups to compete with big banks, fintech, and bigtech.

FRB-Dallas Staff: TALF Worked for CMBS

The Federal Reserve Bank of Dallas has issued a new report documenting the manner in which Fed support at the pandemic’s outset supported U.S. commercial real estate.

IDIs Sound, but Worrisome Signs

The FDIC’s report on banking-sector 1Q data shows that, despite continuing strong earnings and robust credit quality, some IDIs are facing serious challenges.

HFSC Disabilities Hearing Confirms Little Appetite for New Legislation

As anticipated, HFSC’s Subcommittee on Diversity and Inclusion hearing today covered issues faced by persons with disabilities such as under-banking, unemployment and housing inaccessibility.

Brainard to Lay Out Key CBDC Considerations

The HFSC staff memo today on Thursday’s CBDC hearing confirms that it will be a consequential session.

HFSC Backs OLA, Climate Action in FY23 Budget

The House Financial Services Committee today released its views on the FY2023 budget, detailing broad support for the administration’s financial stability, climate, and housing efforts to guide its future authorizing work and that of the appropriations committees to the extent they heed HFSC’s request.…

9 05, 2022

DAILY050922

2023-03-01T13:21:36-05:00May 9th, 2022|2- Daily Briefing|

U.S. Adopts Powerful Back-Door Campaign vs. Shell Companies, Trusts

In conjunction with a G-7 statement strongly condemning Russia, Treasury took an innovative move to address shell companies linked to the Russian Federation even as FinCEN’s beneficial-ownership rules remain bogged down.

Hsu Promises Deal-By-Deal Review of Large Regional M&A Pending Broad, Forward-Looking Policy

Citing changes in both U.S. banking and inequality since the last round of merger-policy statements in 1995, Acting Comptroller Hsu today called for a new policy that is neither pro- nor anti-merger but rather determines which larger mergers are “good” transactions so that only risky ones are rejected.

SEC Bows to Critics with Longer Comment Periods

In a significant concession to Congressional Republicans and industry critics, the SEC today extended the comment period for two of its most controversial initiatives.  The deadline for comments on its climate-risk disclosures is moved forward by twenty-eight days to June 17.

CFPB Takes Administrative Action Expanding ECOA Reach, Lender Risk

Living up to its promise on Friday to address structural racism, the CFPB today issued a new advisory extending its fair-lending enforcement scope under the ECOA to all aspects of a credit transaction, not just loan origination or servicing.

Daily050922.pdf

22 04, 2022

Al042522

2023-03-01T16:02:32-05:00April 22nd, 2022|3- This Week|

Recidivist Witness Tackles Repeat Offenders

Later this week, CFPB Director Chopra will appear at what are sure to be acrimonious sessions before the House Financial Services and Senate Banking Committees.  Laying some pipe ahead of time, Mr. Chopra joined New York’s AG in taking action against another firm he characterized as a “repeat offender,” tracking rhetoric in a prior “repeat-offender” suit but not – at least so far – trying to drive these firms out of business.  We expect this repeat-offender initiative to be one focus of Mr. Chopra’s testimony and perhaps also a topic on which Chairwoman Waters (D-CA) will engage to highlight her longstanding effort to punish non-compliant “megabanks” (see FSM Report GSIB11).  These hearings will, though, witness far more than a few more notches on Mr. Chopra’s belt.  The hearing thus will focus on hot-button issues such as student lending, medical debt, and the employer practices highlighted in Member posts late last week.

Al042522.pdf

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