#GSE – Page 4 – Federal Financial Analytics

23 05, 2023

DAILY052323

Eliza Allen2023-05-23T17:15:40-04:00May 23rd, 2023|2- Daily Briefing|

House Advances Consensus Anti-China Reporting Legislation

The House yesterday voted 400-5 to approve H.R. 1156, bipartisan legislation addressing Congress’ China concerns by mandating a new study.

Gruenberg Endorses Bank On Accounts, Notes Continuing Racial Gaps

In remarks today largely devoid of policy implications, Chairman Gruenberg praised Bank On’s impact on financial inclusion, but noted that racial divides still persist as Black and Hispanic households are more likely to be unbanked than White ones at every income level.

IOSCO Aims at Ending Crypto-Market Arbitrage

Advancing global crypto standards, the International Organization of Securities Commissions today released a consultative report on the contentious question of centralized-market regulation with which a joint HFSC/AG Committee process is now wrestling (see Client Report CRYPTO43).

HFSC GOP Blasts GSE Fees, Supports FHLB System

Today’s HFSC hearing with FHFA Director Thompson was largely the LLPA battle we anticipated, with Republicans lambasting recent actions and Democrats tartly responding that Republicans did not know what they were talking about.

Hsu Echoes Gruenberg’s Bank-On Praises

Following Chairman Gruenberg’s remarks earlier today, Acting Comptroller Hsu similarly praised Bank On’s impact on financial inclusion while highlighting racial and income gaps.

Daily052323.pdf…

22 05, 2023

DAILY052223

Eliza Allen2023-05-22T16:53:15-04:00May 22nd, 2023|2- Daily Briefing|

HFSC Set To Tackle LLPAs, GSE Policy

As noted, HFSC tomorrow will grill FHFA Director Thompson. Republicans will surely emphasize their opposition to recent LLPAs laid out at a subcommittee hearing last week; Democrats will continue to defend them.

Americans Struggle With Inflation, Savings; Bank Use Stable

Although the Fed’s latest economic well-being study has grim macro results with significant political consequences, it also finds that 94 percent of Americans in 2022 had banking relationships, an unchanged rate from 2021 although gaps remain by age, race, ethnicity, and disability.

Kashkari Disputes Need For Broad Reg Rewrite If Big-Bank Capital Goes Way Up

Renewing his campaign to hike large-bank capital ratios, FRB-Minneapolis President Neel Kashkari today said that higher capital requirements would have prevented recent failures and that additional, over-complex rules are poor substitutes for them.

Daily052223.pdf…

17 05, 2023

DAILY051723

Eliza Allen2023-05-17T17:44:04-04:00May 17th, 2023|2- Daily Briefing|

Bipartisan Senate Consensus Demands Structural Change To Fed IG

At today’s Senate Banking Subcommittee on Economic Policy hearing on Fed accountability, Chairwoman Warren (D-MA) was unsparing in her criticism of the Fed and its current IG, Mark Bialek. She elicited the fact that he is the Fed’s highest-paid employee and, while he may be dismissed only by two-thirds of the Board, she argued that he is essentially captive and thus cannot be relied upon to investigate ethics challenges, bank failures, and internal operations.

HFSC GOP Demands LLPA Changes No Matter FHFA’s RFI

As anticipated, Chairman Davidson (D-OH) reiterated GOP demands that the FHFA rescind the entirety of its LLPA proposal at today’s HFSC Subcommittee on Housing and Insurance hearing, despite FHFA conceding to some Republican demands and issuing an RFI on the Enterprises’ single-family pricing framework earlier this week. Mr. Davidson also pushed back on FHFA’s assertion that LLPA pricing must be set with regard to private mortgage insurance, saying that MI does not reduce taxpayer risk or GSE capital even though it is required for risk reduction and captured in the GSE capital standards.

Daily051723.pdf…

17 05, 2023

GSE-051723

Eliza Allen2023-05-17T17:14:20-04:00May 17th, 2023|4- GSE Activity Report|

Setting Purpose Via Prices

With Republicans on the anti-LLPA warpath, FHFA is hoping to preserve as much of the current fee structure as possible without paying too high a political price, issuing a request for information (RFI) in hopes that letter-writing will keep everyone busy until Congress moves on to other matters. If FHFA does redefine the capital thresholds by which pricing is judged, it could well also redefine the products the GSEs will purchase.

GSE-051723.pdf…

16 05, 2023

DAILY051623

Eliza Allen2023-05-16T17:44:43-04:00May 16th, 2023|2- Daily Briefing|

Hsu Presses Reg Harmonization, Resolution Reform, Merger-Policy Rewrite

We now add our assessment of Acting Comptroller’s Hsu’s testimony to our analyses of those from Messrs. Barr and Gruenberg ahead of HFSC’s hearing later this morning.

Yellen Says White House Supports Community-Bank Exemptions

Speaking today to the ICBA, Secretary Yellen today joined the parade of policy-makers affirming the national importance of community banks.

JEC GOP Counter FRB on SVB Causality

JEC Republican staff today released a memo finding that tailored liquidity rules did not contribute to SVB’s failure, a contrast to the FRB’s SVB report (see Client Report REFORM221).

LLPAs Set for GOP Frying Pan

The majority-staff memo for tomorrow’s Housing Subcommittee hearing makes it clear that, as anticipated, the sole topic will be FHFA’s controversial LLPAs and related GSE pricing.

Senate Banking: Tough Grilling For Failed-Bank CEOs, Growing Consensus For Clawback Bill/Tough Rules

As predicted, today’s Senate Banking hearing with the CEOs of SVB and SBNY was a feisty session in which Democrats built their case for executive clawback legislation and the failed bank executives defended management while repeatedly placing blame on what they called an “unprecedented series of events.”

Daily051623.pdf…

27 04, 2023

FedFin on: How To Say It’s Systemic

Arezou Rafikian2023-04-27T17:04:10-04:00April 27th, 2023|The Vault|

FSOC’s newly-proposed analytical methodology for systemic risk identification is most immediately important for nonbank mortgage companies and the regulated institutions that love them. It may look as if a U.S. systemic framework is months away, but FSOC has signaled that, in some cases, systemic interventions could well come sooner.

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

27 04, 2023

GSE-042723

Eliza Allen2023-04-27T10:46:06-04:00April 27th, 2023|4- GSE Activity Report|

How To Say It’s Systemic

FSOC’s newly-proposed analytical methodology for systemic risk identification is most immediately important for nonbank mortgage companies and the regulated institutions that love them. It may look as if a U.S. systemic framework is months away, but FSOC has signaled that, in some cases, systemic interventions could well come sooner.

GSE-042723.pdf…

26 04, 2023

Daily042623

Arezou Rafikian2023-04-27T10:27:37-04:00April 26th, 2023|2- Daily Briefing|

Senate Banking Housing Plans Focus on Affordability, Access

At today’s Senate Banking hearing on affordable housing, Chairman Brown (D-OH) framed the committee’s legislative agenda in his opening statement but did not indicate any timing or future action.

CFPB Targets Piggyback-Mortgage Collection

The CFPB today issued guidance on debt collection practices it asserts violate the Fair Debt Collection Practices Act by attempting to collect time-barred debt where the statute of limitations has expired.

Comment Deadline Set For Sweeping FHFA Equitable Housing NPR

The Federal Register today includes FHFA’s NPR codifying Sandra Thompson’s equitable- and fair housing agenda in a body of rule that future directors would find more difficult to reverse and FHFA could enforce with more punitive standards.

HFSC GOP Demands FHFA Reverse LLPA Changes

HFSC Chairman McHenry (R-NC) and Rep. Davidson (R-OH) sent a letter to FHFA Director Thompson today demanding that the agency reverse changes to the GSEs loan level pricing adjustments (LLPAs).

LIBOR Transition Still Too Slow, Agencies Say

The Fed, FDIC, NCUA, OCC, and CFPB along with state bank and state credit union regulators today issued a joint statement reminding supervised institutions that USD LIBOR panels will end on June 30.

FDIC, OCC Deploy UDAP Powers for Targeted Deposit Fees

So far without the Fed, the FDIC and OCC today released supervisory guidance asserting that authorize-positive, settle-negative (ASPN) charges are an unfair practice under UDAAP criteria and present consumer compliance risk.

HFSC GOP Leaders Press Banking Agencies on Digital “Chokepoint” Policy

HFSC Chairman McHenry (R-NC) was …

25 04, 2023

DAILY042523

Eliza Allen2023-04-25T17:12:43-04:00April 25th, 2023|2- Daily Briefing|

Stablecoin 2.0 Is Controversial 3.0

Ahead of Thursday’s stablecoin hearing, HFSC Republicans late yesterday released a second discussion draft of legislation that received a most equivocal response at last week’s subcommittee hearing (see Client Report CRYPTO42).

Treasury Finds Profitability to Blame for De-Risking

Treasury today released its 2023 De-Risking Report, finding that profitability principally explains why financial institutions choose to de-risk.

OFR: No Single Factor To Blame For 2019 Repo Spike

A new OFR paper on the September 2019 repo rate spike concludes that while a confluence of factors – large Treasury issuances, corporate tax deadlines, and lower levels of reserves – caused the crisis, none of them individually would have been disruptive enough to trigger the spike, although limited transparency and market segmentation exacerbated it.

Federal Agencies Launch New Anti-AI Enforcement Effort

The FTC, the Civil Rights Division of the DoJ, CFPB, and EEOC today released a joint statement pledging to enforce all relevant consumer protection, anti-discrimination, and fair competition laws not only on AI, but indeed also on all “automated systems” that the agencies believe to be within their jurisdictions.

HFSC Digital Assets Hearing Set For Jurisdictional Debate

Ahead of Thursday’s hearing on the latest stablecoin discussing draft, HFSC’s staff memo today reiterates GOP opposition to the SEC’s jurisdictional arguments.

ONRRP Revised

The Federal Reserve Bank of New York today revised the terms of access to the overnight reverse-repo program, adding financial stability and bank safety-and-soundness to monetary-policy implementation as ONRRP criteria for eligible counterparties …

20 04, 2023

GSE-042023

Eliza Allen2023-04-20T15:30:53-04:00April 20th, 2023|4- GSE Activity Report|

From Plans To Purpose

FHFA yesterday proposed a sweeping rule that would codify Sandra Thompson’s equitable- and fair-housing standards in a rule that any future FHFA director would have to work a lot harder to reverse. Indeed, not only would new plans become a mandatory part of the GSEs’ mission, but violations of them by Fannie or Freddie or any other fair-lending, equity, or related standard by all of the housing agencies could be sanctioned as unfair or deceptive acts or practices (UDAP), a page from the CFPB’s rulebook that affords a far greater scope to call an action discrimination and then punish it at even greater legal and reputational cost. Even if spared new plans – and that’s a big if – Home Loan Banks would also be brought into a far more exacting equity construct far beyond current adherence to statutory AHP requirements.

GSE-042023.pdf…