#FIO – Federal Financial Analytics

9 11, 2022

DAILY110922

Eliza Allen2022-11-09T16:59:00-05:00November 9th, 2022|2- Daily Briefing|

FIO, HHS Plan Longer Ponder on Federal Cyberinsurance

The Federal Insurance Office and the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency today extended the comment deadline for comments on whether a federal insurance response is warranted for catastrophic cyber risk. The earlier notice asked what type of catastrophic attacks on U.S. critical infrastructure are most likely, how best to measure their effect, the current catastrophic insurance landscape, and how any federal insurance should be structured.

FDIC Board Stands By DSIB Resolution Reform

At today’s FDIC Systemic Resolution Advisory Committee session, Acting Chairman Martin Gruenberg defended the release of proposed DSIB resolution standards as guidelines, not rules. Director Chopra reiterated concerns he expressed at a recent FDIC board meeting (see Client Report DEPOSITINSURANCE115), pressing for a structural rewrite of both DSIB and GSIB resolution standards. Acting Comptroller Hsu focused largely on supervisory build-out, noting the need for more creative, forward-looking assessments of resolution plans. Mr. Hsu also wants regulatory statements to ensure that investors understand that TLAC is a buffer of capital-at-risk in the event of extreme stress.

Daily110922.pdf…

18 10, 2022

DAILY101822

Eliza Allen2022-10-18T17:16:23-04:00October 18th, 2022|2- Daily Briefing|

CFPB Uses Enforcement Action to Press Payment-System Digital, Fee, Safety, Fairness Standards

Using an enforcement action today against ACTIVE Network, CFPB Director Chopra emphasized that this case epitomized broader Bureau concerns. These are monitoring use of “digital dark patterns” – i.e., design features that manipulate users into harmful behavior that are profitable for companies.

Treasury’s FIO Seeks Input On Climate-Related Data Collection

Taking further action in response to the President’s Executive Order on Climate-Related Financial Risk (see FSM Report GREEN8), Treasury’s Federal Insurance Office today requested comment on a proposed data collection regarding current and historical underwriting data on homeowners’ insurance from property and casualty insurers to assess climate-related financial risk.

HFSC Republicans Push Yellen to Support IFI Nuclear Energy Funding

In light of recent energy shortages in Europe, Ranking Member McHenry (R-NC) and Rep. Hill (R-AR) sent a letter today to Treasury Secretary Yellen urging her to support the European Bank for Reconstruction and Development and other IFIs financing nuclear energy projects. They claim that an absence of Western funding has allowed China and Russia to fill the void, especially in developing countries.

Daily101822.pdf…

7 10, 2022

DAILY100722

Eliza Allen2022-10-07T16:40:15-04:00October 7th, 2022|2- Daily Briefing|

FIO Notes Growing PE Insurance Role, Demurs on Action

Treasury’s Federal Insurance Office today issued an annual report replete with data and largely devoid of policy. However, reflecting strong pressure from Sen. Brown (D-OH) (see Client Report INSURANCE61), the report addresses credit risk transfer and private-equity participation in the reinsurance industry. FIO notes that the alternative risk-transfer market grew by $3 billion from 2020 to 2021, with both the property & casualty and life & health insurance sectors seeing over ten percent growth in reinsurance, which boosted total sector revenue growth. It also finds that private equity-owned insurer cash and invested assets grew over 100% over the same period.

Daily100722.pdf…

5 08, 2022

DAILY080522

Eliza Allen2023-01-04T13:22:18-05:00August 5th, 2022|2- Daily Briefing|

Senate Dems Demand Answers from Equifax re Inaccurate Credit Scores

In a letter today to Equifax’s CEO, Sens. Warren (D-MA), Warner (D-VA), and Krishnamoorthi (D-IL) demanded answers about erroneous credit scores, asking why the company failed to notify affected borrowers and waited several weeks to notify lenders. The Senators claim that Equifax’s response in an environment of rising interest rates forced some borrowers to pay higher rates or rejection and ask Equifax to explain the cause and scope of the error, compensation plans, and whether all affected parties or any relevant regulatory authorities have been notified.

Brown Targets Life-Insurance Systemic Risk

Senate Banking Chairman Brown (D-OH) today announced that he plans a hearing questioning the role of private-equity companies in the life-insurance sector. In letters to FIO and the NAIC, he cites Federal Reserve statements regarding insurance-industry leverage (see Client Report SYSTEMIC93), indicating that he believes this poses systemic challenges akin to those in the banking sector before 2008. FIO is asked to target analysis of offshore reinsurance sector risk-taking across the life-insurance sector; NAIC is asked to work with the FIO on issues raised in its prior letter to the chairman.

Daily080522.pdf…

2 06, 2022

DAILY060222

Eliza Allen2023-02-10T16:10:34-05:00June 2nd, 2022|2- Daily Briefing|

Fed Study Outlines Fixes to Make Retail CBDC Functional

A new Federal Reserve paper assesses the interplay between a U.S. retail CBDC and monetary policy transmission if whatever the Fed comes to offer is widely adopted for both payment and investment purposes.

Black Crypto Investments Reflect Wealth Gap Born of Financial System Distrust

A new article by the Kansas City Fed investigates the popularity of cryptoassets among Black investors and explains what may attract them and how this is a symptom of the racial wealth gap. The study found that Black investors are both more likely than whites to own crypto instead of safer assets such as stocks and mutual funds and more likely to expect high returns (i.e., 27 percent for Blacks versus 15 for whites) from crypto.

Fed Study Finds Enforcement Actions Increase Minority Lending

A study today released by the Fed found that, since 1997, banks subject to an enforcement action increased their mortgage lending to minorities and decreased minority denial likelihood, even if the action was not issued for violation of the fair-lending laws.

FIO Prioritizes Biden Climate-Risk Goals

The meeting today of FIO’s Federal Advisory Committee on Insurance focused on FIO’s work to meet the goals set out for it in the President’s climate-risk executive order (see FSM Report GREEN8).

Daily060222.pdf…