#equality – Federal Financial Analytics

30 03, 2023

DAILY033023

Eliza Allen2023-03-30T17:27:30-04:00March 30th, 2023|2- Daily Briefing|

Yellen Calls for Bank, Nonbank Regulatory Rewrite

Implicitly confirming press reports that the White House will soon press for tougher bank rules, Treasury Secretary Yellen today said that, as beneficial as the rules imposed since the great financial crisis have been, more stringent standards are necessary.

Hsu Sets Dual OCC Mission: Safety, Fairness

In remarks today, Acting Comptroller Hsu emphatically echoed statements of other top regulators that the banking system is safe and sound, emphasizing that the OCC is monitoring the market and is prepared to use its tools to protect the system.

Basel Updates Global Liquidity, Operational Standards

Although the U.S. has still not even proposed the Basel IV “end-game” standards, the Basel Committee continues to refine them and today issued its latest set of FAQs.

White House Sets Reg-Reform Agenda

As anticipated early this morning, the White House has issued a statement calling on federal banking agencies to roll back rules the President describes as weakening “common-sense bank safety and supervision.”

Senate Dems Press Agencies to Strengthen Capital Rules

Following this week’s hearings (see Client Report REFORM218), Sens. Warren (D-MA), Blumenthal (D-CT), and Duckworth (D-IL) sent a letter to Vice Chair Barr, Chairman Gruenberg, and Acting Comptroller Hsu urging them to strengthen large-bank capital requirements.

CFPB Stands By Its Small-Business Reporting Rules

Despite strong industry and GOP opposition, the CFPB today finalized its small business data collection rulemaking in a sweeping final rule the Bureau says will increase transparency in small business lending, promote economic …

17 03, 2023

DAILY031723

Eliza Allen2023-03-17T16:53:13-04:00March 17th, 2023|2- Daily Briefing|

Biden Positions White House On Side Of SVB/SBNY Enforcement Actions

Reflecting growing political heat as SVB/SBNY revelations continue, President Biden today called on Congress to toughen enforcement penalties for senior management at failed banks. As noted on the fact sheet accompanying the formal request to Congress, the White House believes current law makes it unduly difficult for regulators to claw back executive compensation following a receivership and/or to bar individuals from further banking-industry employment.

HUD Reinstates Tough Disparate-Impact Standard

HUD today announced a final rule rescinding a 2020 rule governing Fair Housing Act disparate impact claims (see FSM Report FAIRLEND8) and restoring a 2013 discriminatory effects rule (see FSM Report FAIRLEND4). The fact sheet accompanying the announcement claimed that the complications added in 2020 rule would have made it “virtually impossible” for HUD and private plaintiffs to prove discrimination.

Waters Pledges Bill on Failed-Bank Execs, Pushes Incentive-Comp Regs

Shortly after the President called on Congress to toughen penalties for failed bank executives, HFSC Ranking Member Waters (D-CA) sent a letter today to Fed, FDIC, and SEC leadership announcing she is crafting legislation to do so. The letter also reiterated Democratic calls for the agencies to hold SVB and SBNY executives accountable and urged them to finalize longstanding compensation rules (see FSM Report COMPENSATION30), which Ms. Waters demanded include strong clawback provisions.

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3 03, 2023

Al030623

Eliza Allen2023-03-03T17:17:37-05:00March 3rd, 2023|3- This Week|

Gloves Off

When Chairman Powell comes before HFSC and Senate Banking this week, we’ll see if FedFin’s forecast for newly-rough going plays out, but all signs say it will. In the lead-up to the midterm, Democrats other than Sen. Warren (D-MA) who weren’t all that sympathetic to many Fed actions held their tongues in order to protect a central bank that, for all its putative independence, seemed aligned with Biden Administration statements promoting American prosperity and the near-term chances of reduced inflation. With the 2024 election looking even uglier than the midterm and Republicans in control of the House, Mr. Powell may find himself squeezed hard from both sides of the aisle, taking lots of heat on issues ranging from monetary policy and the debt ceiling to a panoply of Fed regulatory and payment-system decisions along with the pending nomination of a new vice chair.

Al030623.pdf…

17 02, 2023

DAILY021723

Eliza Allen2023-02-17T12:16:37-05:00February 17th, 2023|2- Daily Briefing|

Senate Dems Frame FRB-Nomination Demands

In conjunction with a bill spearheaded by Sen. Jack Reed (D-RI), Banking Chairman Brown (D-OH) joined other Democrats yesterday in introducing S. 496, legislation to require that the Federal Reserve Board have a governor dedicated to worker interests much as the seat now held by Gov. Bowman is by law required to focus on community-bank considerations. The measure was also introduced in the last Congress and was then as now intended more to send a signal to the White House about the candidates Senate Banking will view with the greatest favor rather than as a serious effort to change the law.

Swiss Bank Role In SEC Crypto Action Sure To Hike Pressure On Banking Agencies

We draw to your attention the reference to a Swiss bank in the SEC’s enforcement order against Terraform Labs and its founder, Do Kwon. Although criticized today by Republicans as an example of the SEC’s prior regulatory failures, the order itself is unsurprising given that Mr. Kwon is a fugitive and the algorithmic stablecoin’s collapse shocked previously complacent crypto markets and regulators. The SEC’s order says only that $100 million was illegally transferred into a “Swiss bank,” not naming the institution.

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16 02, 2023

DAILY021623

Eliza Allen2023-02-16T16:46:08-05:00February 16th, 2023|2- Daily Briefing|

House GOP Slams Beneficial-Ownership Database

Reiterating longstanding concerns, HFSC Chairman McHenry (R-NC) and National Security, Illicit Finance, and International Financial Institutions Subcommittee Chairman Luetkemeyer (R-MO) submitted a comment letter today strongly opposing FinCEN’s latest beneficial ownership NPR.

House GOP Decries SEC Crypto-Custody Construct

Reflecting GOP concerns about the SEC’s new custody proposal as well as broad GOP objections to much of what Chairman Gensler does, HFSC Republicans today tweeted that the proposal will not ensure sufficient investor safeguards in part because restrictions on bank custody services remain.

Biden Order Reasserts Racial-Equity Agenda

Reiterating much of his last racial-equity executive order, President Biden today issued an order directing federal agencies to establish equity teams and comprehensive strategies to implement the order’s new equity initiatives.

FSB Pledges Further Work on DeFi Financial-Stability Risks

The FSB today released a report finding that DeFi’s financial stability risks are limited but may grow should linkages increase to traditional finance.

CFPB: Unfair Credit-Card Competition Evident Via Data Suppression

Following strongly-worded letters to six credit card lenders last May, the CFPB today concluded that these companies have suppressed payment data for competitive purposes.

FHFA Floats Single-Family ESG Bonds

Building on its equitable-finance initiative, FHFA today released a request for input on the benefits and risks of Fannie and Freddie single family social bonds.

Daily021623.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…

9 02, 2023

Daily020923

Eliza Allen2023-02-09T16:59:20-05:00February 9th, 2023|2- Daily Briefing|

FHFA Forecasts Substantive FHLB Action

Ahead of tomorrow’s comments on the FHLB System by Director Thompson (see forthcoming FedFin analysis), an FHFA official’s op-ed in the American Banker for the first time makes it clear that last year’s hearings will lead to substantive action. This rebuts suggestions Karen Petrou also discounted on a recent podcast when asked if the hearings were just a FHFA exercise to defer action.

Housing Finance Plays Second Fiddle At Senate Banking

Today’s Senate Banking Committee opening hearing for this Congress focused on public, rural, and rental housing. In addition, Chairman Brown (D-OH) concentrated on rental affordability; Ranking Member Scott (R-SC) addressed the federal deficit and federal housing policies.

Daily020923.pdf…

8 02, 2023

DAILY020823

Eliza Allen2023-02-08T17:36:06-05:00February 8th, 2023|2- Daily Briefing|

Biden Puts His Stamp On CFPB Credit-Card Fee Controls

Scuttling industry expectations that the CFPB’s credit-card fee clampdown will never be implemented, President Biden last night zeroed in on his administration’s campaign to eliminate “junk” fees, including “exorbitant” overdraft fees and credit card late fees.

Senate GOP Launches Anti-Woke Attack

Accelerating the GOP’s anti-woke endeavor, Sen. Kevin Cramer (R-SD) and 36 GOP senators have introduced S. 293 to impose strict sanctions on banks that provide or deny financial services for what the senators consider political reasons.

Treasury: Happy In The Cloud If It Doesn’t Rain

In its long-awaited report today on the systemic implications of cloud computing, Treasury today encouraged more rapid adoption even as it pointed to systemic-risk considerations.

HFSC Subcomm: Privacy Compromise May Not Prove Impossible

Today’s kick-off hearing by HFSC’s Subcommittee on Financial Institutions and Monetary Policy suggested that Chairman Barr (R-KY) will move deliberately on his priorities even as full Committee Chairman McHenry (R-NC) pursues higher-profile items such as anti-China policy.

BIS Renews Campaign For Bigtech Systemic Standards

Reiterating longstanding BIS concerns about bigtech platforms, General Manager Agustín Carstens today updated the changes he believes are urgently needed to address growing systemic risk in this sector.

Daily020823.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…

6 02, 2023

GSE-020623

William Cross2023-02-08T13:03:48-05:00February 6th, 2023|4- GSE Activity Report|

Disparate Refinancing Reviewed

A new post from the Federal Reserve Bank of Atlanta summarizes key findings from recent pandemic-era mortgage refinancing research, reiterating prior findings that more White mortgage borrowers got lower refinancing interest rates in 2020 compared to Blacks.

GSE020623.pdf…