FRB-Richmond: Reform MMFs or End Prime Institutional Funds
A new paper from the Federal Reserve Bank of Richmond authored in part by the Bank’s former president argues that the heart of prime MMF risk is continuing expectation of a Fed backstop under stress. As a result, swing pricing or other changes proposed by the SEC (see FSM Report MMF19) are, they say, unlikely to reduce systemic risk. They thus recommend that MMFs be required to have pre-positioned liquidity support backstops above and beyond the additional liquidity that would be mandated for MMFs in the SEC proposal.
HFSC Plans Look at Mortgage Discrimination, Servicing
HFSC Democratic staff today released plans for the full committee’s hearing this Wednesday on mortgage finance and economic equality. It will look at the hot housing market and the extent to which it affords wealth accumulation to low-and-moderate-income households and those of color, with the memo noting an array of obstacles to home ownership such as the inability to save for down payments, obstacles to FHA loans, and the prevalence of cash buyers (a matter also to be taken up by the panel tomorrow).
CFPB Details Immigrant Financial Challenges
The CFPB today released a blog post asserting that financial institutions make it unduly difficult for immigrants to obtain financial services. Barriers include those to account and language access, vulnerability to predatory actors, and refugee or newcomer-specific challenges such as a lack of credit history and legal protection.