#Federal Register – Federal Financial Analytics

6 12, 2023

DAILY120623

Eliza Allen2023-12-06T16:42:25-05:00December 6th, 2023|2- Daily Briefing|

OFR Sees Heightened Systemic Risk

Striking a considerably more somber note than the FRB (see Client Report SYSTEMIC97), OFR today concluded that systemic risk is elevated due to an upcoming economic slowdown, heightened inflation, and geopolitical risk and global conflict.

OCC Cracks Down on BNPL Finance

Reflecting continuing CFPB concerns about buy-now/pay-later finance, the OCC today sets new risk-management standards for federally-chartered entities in this arena.

HFSC Housing Subcommittee Revisits Housing Debate

Today’s HFSC Housing Subcommittee hearing largely followed the staff memo’s outlined political playbook, with Chairman Davidson (R-OH) calling for market-based solutions and Ranking Member Presley (D-MA) arguing that expanded subsidies are necessary alongside zoning reform to make housing affordable.

Fed Proposes Market-Risk Valuation Reporting

Readying disclosures for the market-risk capital rewrite (see FSM Report CAPITAL233), the Federal Reserve has proposed new reporting standards that would require covered banks to disclose valuations of their covered positions taking into account unearned credit spreads, close-out costs, early termination costs, investing and funding costs, liquidity, and model risk.

Fed Proposes New Liquidity Risk Reporting Standards

Reflecting growing fears that banks could not actually monetize HQLAs under stress as proved the case for Credit Suisse, the FRB is also proposing new reporting standards requiring covered companies to report on qualifying master netting agreement compliance with current liquidity-risk measurement standards.

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22 11, 2023

DAILY112223

Eliza Allen2023-11-22T12:23:22-05:00November 22nd, 2023|2- Daily Briefing|

Fed Study: CBDC Analysis Needs Work, but Public-Welfare Benefits are Likely

A new FRB staff literature survey of CBDC analyses points to the wide variety of often-opposing findings relating to critical matters such as bank disintermediation and financial stability, attributing this in part to the different CBDC models under consideration in various nations.

Agencies Extend LTD Comment Period

As implied at a recent hearing (see Client Report REFORM229), the agencies have now delayed the comment deadline on long-term debt (see FSM Report TLAC9) until January 16 from November 30.

HFSC GOP Plans Immediate FDIC-Workplace Hearings

Clearly dissatisfied even though the FDIC’s new investigation will proceed without Chair Gruenberg’s involvement, HFSC Financial Institutions Subcommittee Chair Barr (R-KY) and Oversight Subcommittee Chair Huizenga (R-MI) wrote to Mr. Gruenberg demanding that he recuse himself from overseeing any independent investigation.

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14 11, 2023

DAILY111423

Eliza Allen2023-11-14T16:51:55-05:00November 14th, 2023|2- Daily Briefing|

Comment Deadline Set for Debit-Card Interchange Fee Cap

The Federal Register today includes the Federal Reserve’s proposed sharp reduction in the cap for debit-card interchange fees. As previously noted (see FSM Report INTERCHANGE12), the reduction is premised on the Fed’s finding of lowered debit-card costs, but its methodology is largely unchanged and thus may not reflect current and prospective costs such as those associated with pending deposit-insurance, capital, liquidity, CRA, and open-banking standards.

FSB Hones in on Insurance Company Risk, Resolvability

At its plenary meeting over the last two days, the FSB reviewed its longstanding priorities in areas such as NBFIs, climate risk, and cryptoassets. The most notable change in priorities comes with renewed focus on insurance-company systemic risk due to challenging resolution.

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1 09, 2023

DAILY090123

Eliza Allen2023-09-01T12:18:22-04:00September 1st, 2023|2- Daily Briefing|

Durbin, Marshall Reinforce Demand for Card-Fee Cuts

Pressing their bill to limit credit-card interchange fees (see FSM Report INTERCHANGE10), Senate Whip and Judiciary Chairman Durbin (D-IL) and Sen. Marshall (R-KS) this week called on Visa and Mastercard to reverse planned fee hikes. Sen. Durbin is pressing hard to attach the bill to a must-pass vehicle later this month; as noted, it would extend routing-system requirements to credit cards and could lead to significant reductions in card-fee income for banks.

GSIB Surcharge Revisions in Register

The Federal Register today includes the Federal Reserve’s proposal to revise how systemic risk scores that lead to GSIB designation are calculated. As noted (see FSM Report GSIB22), while the Board estimates that the overall impacts of the changes to the surcharge are small, our analysis concludes that the scoring changes could result in higher capital requirements for large regional banks and certain IHCs.

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25 08, 2023

Daily082523

William Cross2023-08-28T11:55:32-04:00August 25th, 2023|2- Daily Briefing|

CFPB Heightens Attention to Elder Finance

The CFPB today proposed a new National “Age-Friendly” Banking Survey that would examine older adults’ banking challenges and give the Bureau greater insight into “age-friendly” account features, informing future policy work.

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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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26 06, 2023

Daily062623

Eliza Allen2023-06-26T16:49:47-04:00June 26th, 2023|2- Daily Briefing|

Waters Forum On Deposit-Insurance Reform Focuses On Flexibility

HFSC Ranking Member Waters (D-CA) Friday hosted a roundtable on deposit insurance reform with a panel of industry experts and a legal scholar.

Bowman Blasts Barr Agenda, Cautiously Open to End Game

In remarks yesterday, FRB Governor Bowman continued her campaign against new capital rules, urging regulators instead to focus on liquidity and supervision.

FRB Withdraws Reserve Bank Registry Proposal

The Federal Register today published a notice from the FRB announcing that the Board is withdrawing proposed amendments (see FSM Report PAYMENT26) to its Account Access Guidelines that would have required Reserve Banks to publish periodic lists of depository institutions with access to Reserve Bank accounts.

Waters Recruits Treasury, SEC To Block GOP Crypto Bill

Ahead of HFSC mark-ups on digital assets legislation next month (see Client Report FEDERALRESERVE74), Ranking Member Waters (D-CA) today sent letters to Treasury Secretary Yellen and SEC Chairman Gensler asking for analyses of the draft digital assets market structure bill strongly opposed by Democrats.

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9 06, 2023

DAILY060923

Eliza Allen2023-06-09T16:39:43-04:00June 9th, 2023|2- Daily Briefing|

HFSC GOP Press Crypto Rewrites

The HFSC majority memo for Tuesday’s full committee hearing on digital assets reinforces Chairman McHenry’s (R-NC) determination to press ahead with legislation redesigning the federal crypto-regulatory ecosystem. As noted, the draft bill constructed with House Ag is generally unacceptable to HFSC Democrats, ensuring a more acrimonious hearing than last week’s Ag session. The witnesses all represent the private sector and generally support the new bill.

OCC Launches Consumer-Trust Campaign

The OCC last night launched a new customer-trust initiative with a new survey proposal and RFI. In accompanying remarks, Acting Comptroller Hsu emphasized that consumer trust in banks must be earned by banks that responsibly and fairly use their market power. Bolstering this new campaign, Mr. Hsu also argues that consumer trust reduces reliance on higher-risk nonbanks and gives banks the funding with which to provide through-the-cycle community lending. For its part, the OCC is working to finalize the longstanding CRA rewrite (see FSM Report CRA32), with Mr. Hsu noting the need through these rules and the OCC’s recent fair-lending rewrite to ensure fairness and LMI-household access to national banks.

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31 05, 2023

DAILY053123

Eliza Allen2023-05-31T17:00:40-04:00May 31st, 2023|2- Daily Briefing|

IMF: Housing Risk Not At GFC Level, Still Worrisome

While falling home prices are unlikely to trigger another financial crisis, an IMF blog post today finds that a drop could still harm the global economic outlook.

FDIC Tries Guarded Optimism

The FDIC’s first-quarter report on the condition of the U.S. banking industry was guardedly optimistic, but that in part appears to be due to the way in which the agency foresees its problems. Problem banks are up by 4 to 43 with $58 billion in assets among them.

End-Game Starts Soon

FRB Governor and Vice-Chair nominee Jefferson today expanded on the Fed’s financial-stability objectives, resolutely disavowing any of the credit-allocation ambitions Republicans sometimes ascribe to its work on climate risk.

CFPB Small-Business Disclosures Go Live

The Federal Register today includes the CFPB’s controversial final rule on small business data collection published late March which the Bureau says will increase transparency in small business lending, promote economic development, and combat unlawful discrimination.

FHA Expands Pandemic Mortgage Relief As Rates Rise

FHA today requested comment on a new loss mitigation proposal called the Payment Supplement Partial Claim allowing servicers to use FHA funds to bring a borrower’s mortgage current and temporarily reduce principal payments.

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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…