#FFIEC – Federal Financial Analytics

12 02, 2024

Daily021224

Arezou Rafikian2024-02-13T13:14:07-05:00February 12th, 2024|2- Daily Briefing|

Bowman Presses New Community-Bank Regulatory Construct

FRB Gov. Bowman today recommended that community banks be differentiated from larger ones based not on asset size as now, but rather by their business model. Key criteria, she says, should be a simple and local business model focused on relationship banking. Community-banking standards should reflect this business model in contrast to other banking strategies and be “fair,” i.e., focused on how challenging and costly it is for community banks to comply with rules that may not meaningfully apply to them.

IMF Targets Margining Risks

Reinforcing the work of global regulators addressing margining liquidity-risk fears, the IMF released a staff study finding that as much as a third of EU investment funds that are large derivatives end-users could not meet their variation-margin requirements under stress.

HFSC Set to Demand Much from Treasury, FinCEN

The HFSC majority-staff memo on Wednesday’s FinCEN hearing makes it clear that Under-Secretary Nelson and FinCEN director Gacki will face hard questioning on anti-money laundering and CFT topics. These will surely include critical GOP scrutiny of Treasury’s request for additional authority for greater monitoring and enforcement authority over digital assets even though the Digital Asset Subcommittee plans a hearing specifically on this topic later this week.

FFIEC Redesigns Valuation-Bias Exam Protocol

Arguing that deficient real estate valuations due to bias or discrimination cause consumer harm and pose safety-and-soundness risks, the FFIEC today issued a statement of examination principles regarding valuation discrimination and bias in residential lending. While the principles primarily concern …

15 12, 2023

DAILY121523

Eliza Allen2023-12-15T17:31:25-05:00December 15th, 2023|2- Daily Briefing|

Crypto Measures Await Next Session

As anticipated, HFSC Chair McHenry (R-NC) was able to fend off concerted efforts by Sens. Brown (D-OH) and Warren (D-MA) to add the Warren-Marshall crypto bill to the National Defense Authorization Act.

FSOC to Target Hedge Funds, Nonbank Mortgage Companies

The readout from Treasury on yesterday’s FSOC meeting provides insight into the Council’s executive session suggesting significant near-term systemic action regarding hedge funds.

FSB Plans Broad Rewrite of Public Backstops, GSIFI Resolvability, Operational Readiness

The FSB’s 2023 Resolution Report today advises banks and public sector authorities to be prepared to access public sector funding in resolution, with the Board planning to review whether existing public sector backstops are adequate to meet potential failure scenarios.

Brown Renews Bipartisan Quest to Constrain Nonbank Banks

Advancing the big-tech concerns he most recently voiced before GSIB CEOs (see Client Report GSIB23), Senate Banking Chairman Brown (D-OH) has introduced S. 3538, bipartisan legislation to impose bank regulation on non-bank parent companies of insured depository institutions.

DOJ Targets Fraudulent Microtransactions

Cracking down on unauthorized bank account charges, the DOJ today announced multiple actions against “sham” companies alleged to have used misrepresentations or unauthorized charges to steal money from consumers’ financial accounts.

CRS Warns Credit Card Act Could Result In Risky Retailer Payment Networks

The CRS this week issued a report analyzing the Durbin-Marshall Credit Card Competition Act, S.1838 (see FSM Report INTERCHANGE10), projecting that fee caps will have a greater impact on transaction fees than competition, with …

2 08, 2022

DAILY080222

Eliza Allen2023-01-04T13:33:07-05:00August 2nd, 2022|2- Daily Briefing|

FFIEC Turns Back to Troubled Loans

The banking agencies and NCUA today sought comment on proposed changes to troubled-loan standards that would codify action during the great financial crisis on CRE-related allowances for loan and lease losses (see FSM Report ALLL5) and Covid-crisis era regulatory and CECL actions (see FSM Report CECL7). Although focused on CRE, the statement’s general principles would also apply to commercial loans secured by real property or business assets, reiterating current injunctions for banks to work “constructively” with troubled borrowers.

Senate Banking at Another Loggerhead, This One re Housing

Today’s Senate Banking hearing on rising rent was a partisan session, with Democrats urging support for legislation to provide emergency rental assistance and other federal interventions. In sharp contrast, Republicans argued that needless government regulation is to blame. Ranking member Toomey (R-PA) also continued Republican attacks on the GSEs, denouncing what he called their loose underwriting standards and calling for Congress to prohibit them from investing in areas with rent-control laws.

Hsu Fears Continuing Cyber Risk

In remarks today, Acting Comptroller Hsu indicated that, while banks have generally done a good job combatting cyber threats, this has led to an undue sense of security across the industry, law enforcement, and national-security officials. Mr. Hsu thus urges continued vigilance and investment that recognizes the increasingly inter-connected and complex nature of financial instruments, payment systems, and markets, as well as continued attention to contingency planning and recovery protocols.

Daily080222.pdf…

15 06, 2022

CRYPTO28

Eliza Allen2023-01-26T15:43:09-05:00June 15th, 2022|1- Financial Services Management|

U.S. Digital-Asset Framework

After protracted negotiations and much public attention, bipartisan senators have introduced a far-reaching bill designed to encourage digital-asset use without undue risk to consumers, investors, or the financial system. The bill decides most, if not all, of the outstanding regulatory barriers to digital-asset use in favor of digital assets and their providers. Provisions in many cases go farther than public discussion has so far noted – for example, the measure not only expands the ability of digital-asset providers to reach retail and wholesale customers, but also gives them access to FDIC resolution without the cost of paying insurance premiums or coming under many of the rules that govern insured depositories. Digital-asset providers could also make loans without the disclosures designed to be transparent to less well-informed consumers or the other consumer-protection standards administered by the CFPB.

CRYPTO28.pdf …

14 06, 2022

FedFin On: U.S. Digital-Asset Framework

Arezou Rafikian2023-01-27T15:30:30-05:00June 14th, 2022|The Vault|

After protracted negotiations and much public attention, bipartisan senators have introduced a far-reaching bill designed to encourage digital-asset use without undue risk to consumers, investors, or the financial system. The bill decides most, if not all, of the outstanding regulatory barriers to digital-asset use in favor of digital assets and their providers. Provisions in many cases go farther than public discussion has so far noted – for example, the measure not only expands the ability of digital-asset providers to reach retail and wholesale customers, but also gives them access to FDIC resolution without the cost of paying insurance premiums or coming under many of the rules that govern insured depositories…

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

24 01, 2022

Daily012422

Arezou Rafikian2023-04-20T14:55:24-04:00January 24th, 2022|2- Daily Briefing|

FFIEC Advances Exam-Reform Initiative

Completing the final phase of its Examination-Modernization Project, the FFIEC late last week issued best practices for requesting examination information from supervised entities. Best practices include requesting only risk-focused and relevant information, giving institutions sufficient time, and examiner coordination to avoid duplicative and/or redundant requests.

CFPB Seeks Comment on BNPL

The CFPB’s inquiry into buy-now/pay-later (BNPL) providers along with questions for public comment were posted in today’s Register.

Daily012422.pdf…

1 12, 2021

Daily120121

Arezou Rafikian2023-05-23T14:07:25-04:00December 1st, 2021|2- Daily Briefing|

FRB-NY Staff Assess CBDC Mission Impact
With Chairman Powell yesterday reiterating that the Fed will soon seek views on CBDC (see Client Report FEDERALRESERVE64), the New York Fed’s blog post today is a timely assessment of whether central-bank digital currency advances core central-bank missions.

CFPB Launches Anti-Overdraft, Pro-Portability Campaign
In concert with a new CFPB report, CFPB Director Chopra today announced that the Bureau will soon limit overdraft and NSF fees and undertake an array of other reforms to retail banking.

FFIEC Tackles New AML Priorities
Rec The FFIEC today released a significant rewrite of their BSA/AML examination manual, stressing not only an array of new priorities, but also recognition that current standards have unintentionally but often decisively encouraged derisking.

Daily120121.pdf…

22 09, 2021

FedFin: How Discriminatory are Appraisals?

Arezou Rafikian2023-08-03T11:34:11-04:00September 22nd, 2021|The Vault|

Getting a bit ahead of FHFA’s new equitable-finance mandate and its express demand for appraisal equity, Freddie Mac has released a detailed study of one of the most significant barriers to housing-finance equity: discriminatory appraisal practices that reduce the chances for wealth accumulation. The study finds demonstrable differences in appraisals for like-kind homes that correlate strongly with race and ethnicity, but provides no guide to either causation or cure.

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

…

22 09, 2021

GSE-092221

Arezou Rafikian2023-08-03T11:34:29-04:00September 22nd, 2021|4- GSE Activity Report|

How Discriminatory are Appraisals?

Getting a bit ahead of FHFA’s new equitable-finance mandate and its express demand for appraisal equity, Freddie Mac has released a detailed study of one of the most significant barriers to housing-finance equity: discriminatory appraisal practices that reduce the chances for wealth accumulation. The study finds demonstrable differences in appraisals for like-kind homes that correlate strongly with race and ethnicity, but provides no guide to either causation or cure.

GSE-092221.pdf…