FHFA – Federal Financial Analytics

3 04, 2024

DAILY040324

Eliza Allen2024-04-03T17:21:51-04:00April 3rd, 2024|2- Daily Briefing|

Bowman Wants Policy Review, Fed-Operational Improvements Ahead of New Liquidity Regs

Turning from mergers to the Fed’s lender-of-last-resort role, Gov. Bowman today argues that new liquidity policies require careful review before any new rules are adopted.

Fed Treads Carefully in New Global Money-Tokenization Project

The BIS today announced a new program exploring ways in which tokenizing central-bank and bank money for wholesale transactions on programmable platforms would benefit the monetary system.

Powell Defends Independence, Mandate Limits

In remarks today on monetary policy and Fed independence, Chair Powell was at pains to emphasize that climate risk was outside the Federal Reserve’s mandate.

FHFA Treads Cautiously Towards FHLB Reform

Issuing a minor ruling regarding Puerto Rico cooperatives, FHFA today also laid out its 2024 priorities following last year’s report on the Home Loan Bank System.

Barr Stands by CRA Rule

Responding to questions about the court injunction on the CRA rule, FRB Vice Chair Barr today stated that the rules are restated expectations within the boundaries of the Act and Congress intended the agencies to update the 1977 law.

Chopra: Merger Approval Requires Affirmative, Additive Community Benefit

Building on his comments when the FDIC board voted 3-2 to issue its merger proposal (see FSM Report MERGER15), CFPB Director Chopra today doubled down on the view that bank mergers should only be approved if there is demonstrable community benefit over an extended period of time.

Daily040324.pdf…

29 03, 2024

GSE-032924

Eliza Allen2024-03-29T11:08:37-04:00March 29th, 2024|4- GSE Activity Report|

Heading Your Way?

Following FSOC’s fulminations about nonbank mortgage companies, FHFA in 2023 heightened its supervisory standards mandating GSE prudential governance of eligible seller servicers. A new OIG report likes most of this a lot, but wants structural improvements in how FHFA executes its obligations and ensures Fannie and Freddie do the same. A bit of this will brush off on other counterparties, most likely MIs.

GSE-032924.pdf…

20 03, 2024

DAILY032024

Eliza Allen2024-03-20T16:23:55-04:00March 20th, 2024|2- Daily Briefing|

Gottheimer Confirms Bipartisan Basel Worries

Rep. Josh Gottheimer (D-NJ) today told the ABA summit that there is bipartisan concern over the impact the Basel III endgame proposal could have on American competitiveness, calling the requirements “overly-burdensome.”

FHFA Advancing FHLB Troubled-Bank Funding Limits

Speaking today at the ABA summit, the Deputy Director of the FHFA’s Division of Banking Regulation Joshua Stallings indicated that the agency is following up on the FHLB100 report by working with the FRB to set cut-off points between acceptable FHLB funding and the discount window.

Tester Slams Fed Interchange Proposal, Durbin-Marshall Bill

Sen. Tester (D-MT) today told the ABA Summit that the Fed’s debit interchange fee proposal (see FSM Report INTERCHANGE12) is a “mistake,” creating uncertainty and adversely affecting community banks and rural America.

Powell: Retail CBDC A Long Way from Anywhere

Reiterating comments made to Sens. Cramer (R-ND) and Lummis (R-WY) in his last appearance on Capitol Hill, Chair Powell today said the Fed is a long way from making any decision about offering a retail CBDC.

Daily032024.pdf…

12 03, 2024

DAILY031224

Eliza Allen2024-03-12T16:59:10-04:00March 12th, 2024|2- Daily Briefing|

Hsu Says Opsrisk Not Cured by Capital, Liquidity

In remarks today on operational resilience, Acting Comptroller Hsu notes that operational risk is not “a problem that capital or liquidity can solve.” Karen Petrou has noted this most recently with regard to the operational-risk capital rules included in the current proposal, which are founded on the longstanding regulatory assumption that capital indeed buffers operational risk.

Senate Talk of Affordable Housing Turns to FHLB Role

At today’s Senate Banking Committee affordable-housing hearing, Chairman Brown (D-OH) again called for the Fed to cut interest rates to address the crisis. The hearing also touched on the role FHLBs can play, with Sen. Lummis (R-WY) stating her intentions to work with the system to expand its impact on the housing supply shortage.

CFPB to Proceed to Mortgage-Fee Rulemaking

NEC Director Brainard today said that the CFPB will pursue a rule or similar action to curtail mortgage-closing “junk” costs along the lines we identified following last week’s Bureau post in conjunction with the new White House competition strike force.

Daily031224.pdf…

12 03, 2024

FedFin on: FHLBs Forced Into an Unflattering Limelight

Arezou Rafikian2024-03-12T16:55:37-04:00March 12th, 2024|The Vault|

The President’s FY25 budget picks up FHFA’s recommendations, calling for statutory change to double the System’s affordable-housing commitment. That won’t happen anytime soon, but a new CBO report strengthens FHFA’s hand in several areas well within its jurisdiction.

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

12 03, 2024

GSE-031224

Arezou Rafikian2024-03-12T11:31:29-04:00March 12th, 2024|4- GSE Activity Report|

FHLBs Forced Into an Unflattering Limelight

The President’s FY25 budget picks up FHFA’s recommendations, calling for statutory change to double the System’s affordable-housing commitment. That won’t happen anytime soon, but a new CBO report strengthens FHFA’s hand in several areas well within its jurisdiction.

GSE-031224.pdf…

11 03, 2024

DAILY031124

Eliza Allen2024-03-11T17:15:23-04:00March 11th, 2024|2- Daily Briefing|

Hagerty Demands Signature-Asset Sale Answers ASAP

Sen. Bill Hagerty (R-TN) yesterday sent a letter to Chair Gruenberg questioning the FDIC’s adherence to requirements in its auction process during the sale of Signature Bank’s loan portfolio, accusing the FDIC of making political choices inconsistent with its least-cost mandate.

Scott Again Calls for Gruenberg Resignation

Adding to GOP pressure on FDIC Chair Gruenberg, Senate Banking Ranking Member Scott (R-SC) yesterday sent a letter reiterating his demand that Mr. Gruenberg step down.

BTFP Demise if FHLB Opportunity

As anticipated, the BTFP window closed today.

FDIC’s Hill Wants New Blockchain, Liquidity Standards

FDIC Vice Chair Hill today said there are “significant downsides” to the agency’s current approach to blockchain, describing its message and that of the inter-agency policy (see Client Report CRYPTO32) as “don’t bother trying.”

Warren Tries to Divide Powell from Other Regulators to Conquer Capital Regs

Following her grilling of Chair Powell last week regarding his decision to intervene in setting the new capital rules, Sen. Warren (D-MA) yesterday sent a letter to Vice Chair Barr, Chair Gruenberg, and Acting Comptroller Hsu asking them if pressure from big banks has “weakened your resolve.”

GAO Wants FinCEN to Move Better, Faster

Reinforcing longstanding bank complaints about the current AML regime, GAO today published a report finding that FinCEN needs to improve transparency surrounding its progress implementing the Anti-Money Laundering Act of 2020 (see FSM Report AML132).

Biden Presses for Statutory Change Boosting FHLB Affordable-Housing Contributions

President Biden’s FY25 …

8 03, 2024

DAILY030824

Eliza Allen2024-03-08T16:54:53-05:00March 8th, 2024|2- Daily Briefing|

Biden Continues Junk Fee Campaign

The President continued his attack on junk fees in the State of the Union, applauding the CFPB’s new credit-card late fee rule. The President also boasted about recent monetary data, calling the American economy “the envy of the world” and called for Congress to pass Sen. Casey’s (D-PA) bill to stop shrinkflation.

FRB Finalizes FMU OpsRisk Update

The FRB today unanimously voted to finalize an update to rules governing operational risk-management for certain systemically-important financial market utilities (FMUs).

CFPB Lays Groundwork for Mortgage Closing-Cost Regulation

Continuing its campaign against junk fees, the CFPB today released a blog post focusing on mortgage closing cost fees, stating that the agency will issue rules and guidance “as necessary” to improve competition and affordability in the coming months. The post states that median total loan costs increased 22 percent on home purchase loans from 2021 to 2022, noting that many of these costs are fixed and not affected by interest rates.

Daily030824.pdf…

6 02, 2024

DAILY020624

Eliza Allen2024-02-06T16:33:54-05:00February 6th, 2024|2- Daily Briefing|

Agencies Begin Pro Forma Reg Review Likely to Take on New Urgency

The FRB, FDIC, and OCC today released the first of the requisite ten-year request for comment on the extent to which existing rules are outdated or unduly burdensome. We will shortly provide clients with an in-depth analysis of the request if it goes beyond the nominal inquiries in the past that led to little meaningful regulatory reform.

Senate GOP Turns to FHFA, FHLB on “Woke” Standards

Criticizing what they call the FHFA’s and FHLBs “politically contentious social agendas,” Senate Banking Republicans Hagerty (R-TN), Tillis (R-NC), Britt (R-AL), and Vance (R-OH) sent a letter to FHFA Director Thompson late yesterday arguing that several FHLB pilot programs are “racially discriminatory” and defy congressional intent. They also argue that the pilot programs highlight a potential gap in FHFA oversight because the final rule governing Fannie and Freddie pilot programs does not also apply to the FHLBs.

SEC Finalizes Contentious Treasury-Market Registration Standards

The SEC today voted 3-2 to approve a revised version of an earlier proposal subjecting certain hedge funds and other Treasury-market participants to registration and SRO regulation, thus reducing their competitive advantages vis-à-vis banks in the secondary-dealer arena. The new approach uses a qualitative test based on the extent to which a covered entity acts as a market-maker as well as Treasury investor.

Daily020624.pdf…

31 01, 2024

GSE-013124a

Eliza Allen2024-01-31T12:41:24-05:00January 31st, 2024|4- GSE Activity Report|

Would a Trump Victory Set the GSEs Free?

Common-stock investors clearly think so, but they’re a notably speculative lot and more than likely wrong. In this report, we lay out why we think the limbo in which the GSEs have languished since 2008 is now a permanent quasi-vegetative state.

GSE-013124a.pdf…