#FRB Cleveland

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22 08, 2022

GSE-082222

2023-01-04T10:56:18-05:00August 22nd, 2022|4- GSE Activity Report|

Forbear to Forget

A new Federal Reserve Bank of Cleveland study validates forbearance as a mortgage-market buffer, reinforcing the likelihood that policymakers and servicers will turn quickly to it if current mortgage-market conditions turn ugly under the combined stress of higher rates and slow to no growth. If bank regulators also reinstate regulatory forbearance on forborne loans, the regulatory-capital cost of higher-risk loans gets a nice counter-cyclical boost, perhaps encouraging banks to tread softly back into at least some of this sector if parallel calculations under the all-powerful stress capital buffer prove propitious.

GSE-082222.pdf

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16 08, 2022

DAILY081622

2023-01-04T11:59:26-05:00August 16th, 2022|2- Daily Briefing|

FRB-Cleveland Study: Banks are Better Small-Business Lenders Than Fintechs

Using data from the 2021 Small Business Credit Survey, a new Federal Reserve Bank of Cleveland study concludes that small businesses that made use of online lenders were less satisfied with their experiences and more likely to report high rates and unfavorable repayment options than those that used banks.  The study also found that online lenders were less likely than banks to approve the full extent of financing, noting that this was not the case prior to the pandemic.

Fed Gives Guarded Guidance re Crypto Activities

The Federal Reserve Board today released a supervisory letter requiring state member banks to obtain prior approval before commencing cryptoasset-related activities and to ensure that appropriate internal controls are in place in order to do so.  This letter comes a day after the board announced its new payment-system access policy and is likely intended to make it clear that activities in or out of FDIC-insured banks related to cryptoassets will not get the free pass some fear.

Toomey Presses for FDIC-Authorized Crypto Activity

Sen. Toomey (R-PA) sent a letter today to acting Chairman Gruenberg alleging that the FDIC has instructed FDIC regional offices to send letters to multiple banks requesting that they refrain from expanding relationships with crypto firms without any legal basis, citing multiple whistleblower complaints.  He asks that Mr. Gruenberg provide any communications that the Washington office has had with FDIC regional offices on the subject by August 30.

Daily081622.pdf

29 06, 2022

DAILY062922

2023-01-24T16:00:53-05:00June 29th, 2022|2- Daily Briefing|

FRB-Cleveland Study: Small-Business Finance Availability Shows Continuing Disparate Impact

The Federal Reserve Bank of Cleveland today published the results of the Small Business Credit Survey, finding that small businesses owned by people of color were far less likely to have recovered to pre-pandemic levels than their white counterparts, due in part to continuing gaps in financial access.

GOP Renews Demand for Reserve Bank Reform

Picking up on the GOP’s serious concern about Federal Reserve Bank governance expressed when Chairman Powell came before them last week (see Client Report FEDERALRESERVE70), Senate Banking Republicans today sharply criticized the head of the Kansas City Fed for what they call her unresponsiveness and even untruthfulness related to how Reserve Trust achieved payment-system access.

CFPB Report: Credit Line Reductions Harm Vulnerable Borrowers

Continuing the CFPB’s assessment of credit-card finance, Bureau staff today issued a report about the adverse impact that credit line reductions or withdrawals have on consumers, especially those under stress.

HFSC Homeownership Session Fans Partisan Flames

Today’s HFSC hearing on homeownership and inequality was a largely partisan session where each side repeated policy and macroeconomic arguments along party lines about the best ways to govern the nation’s housing market.

IMF Calls for Improvements to Capital Market Regulation

The IMF issued a report today on capital-markets regulation calling for new market liquidity backstops, strengthened CCP risk management, and greater attention to emerging risks to strengthen the regulatory perimeter focus.

Waters Renews Demands to Break Up Big Bad Banks

Following the hearing …

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