#Hill – Federal Financial Analytics

27 04, 2023

DAILY042723

Eliza Allen2023-04-27T17:05:53-04:00April 27th, 2023|2- Daily Briefing|

House GOP Presses Entirely New Digital Asset Jurisdictional Framework

Before today’s HFSC Subcommittee session on digital asset regulatory gaps began, full committee Chairman McHenry (R-NC) and House Ag. Committee Chairman Thompson (R-PA) along with Reps. Hill (R-AR) and Johnson (R-AL) issued a joint statement emphasizing that inter-committee collaboration will characterize future legislative efforts and announcing that the committees will hold a joint hearing next month. Opening the hearing, Subcommittee Chairman Hill argued that Congress must act to resolve definitional and jurisdictional disagreements between the SEC and CFTC. He also called for a disclosure regime tailored to the specific needs of digital asset purchasers. Ranking Member Lynch (D-MA) sided with SEC Chairman Gensler’s views that most digital assets are securities and also defended the current regulatory regime.

Daily042723.pdf…

18 04, 2023

DAILY041823

Eliza Allen2023-04-18T17:03:30-04:00April 18th, 2023|2- Daily Briefing|

FRB-NY Finds NBFIs a Source of Systemic Risk Over the Centuries

Reflecting renewed interest in “narrow banks,” the Federal Reserve Bank of New York blog posted evidence of systemic risk from nonbanks in the absence of any banks at all.

Stablecoin Compromise Faces Steep Challenges

As noted yesterday, HFSC’s Digital Asset Subcommittee is set for a Wednesday hearing clearly intended to lay the groundwork for near-term action on Chairman McHenry’s (R-NC) longstanding goal of enacting stablecoin legislation.

Despite Failures, DIF Restoration Ahead Of Schedule

At the FDIC Board’s meeting today, FDIC staff said that – while the timing for restoring the DIF to its 1.35% statutory minimum remains uncertain – the DIF could reach its statutory minimum ahead of time and by 2024.

Bowman Remains Staunch CBDC Skeptic

Reiterating that any U.S. CBDC requires Congressional approval, Gov. Bowman today also reiterated her longstanding skepticism to any such instrument.

CFPB Plans Timing Study to Buttress Junk-Fee Regs

The Federal Register today includes a CFPB comment request on its “Junk Fees Timing Study,” which would be part of a series of online lab experiments testing differences in consumer choices across different information presentations.

Warren, Reed Demand OFR Use Subpoenas To Obtain Systemic Data

Sens. Warren (D-MA) and Reed (D-RI) today urged OFR Acting Director Martin to fill data gaps around financial stability risks posed by climate change, cryptocurrencies, and repo markets.

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12 04, 2023

DAILY041223

Eliza Allen2023-04-12T17:20:45-04:00April 12th, 2023|2- Daily Briefing|

Hill Charts Different FDIC Course

In remarks today, newly-confirmed Republican FDIC Vice Chairman Travis Hill for the first time lays out his thinking ahead of a raft of FDIC decisions in SVB’s wake.

CFPB UDAAP Policy Now Effective

The Federal Register today includes the CFPB’s policy statement expanding the scope of the Bureau’s UDAAP framework, which is now effective upon this publication.

Scott Lays Out Housing Plan

In conjunction with advancing his Presidential campaign, Senate Banking Ranking Member Scott (R-SC) late yesterday announced his new federal housing framework via planned legislation, the Renewing Opportunity in the American Dream (ROAD) to Housing Act.

Basel Turns to Capital, LCR Revamp

The Basel Committee’s head, Pablo Hernández de Cos, today spoke out strongly against regulatory liberalization, implicitly criticizing the U.S. tailoring rules and urging jurisdictions to adhere tightly to Basel’s “multi-metric” standards given their proven value in the recent crisis.

Daily041223.pdf…

23 03, 2023

DAILY032323

Eliza Allen2023-03-23T17:09:59-04:00March 23rd, 2023|2- Daily Briefing|

OFR Study Predicts Household Gains, Banking Instability From Digital Currencies

A new OFR working paper concludes that full integration of digital currencies into the economy would reduce financial-system volatility and improve household welfare, but also increase the probability of a banking crisis.

HFSC Poses Still Tougher SVB/SBNY Resolution Questions

Following tough GOP letters to the Fed and FDIC earlier this week, HFSC Chairman McHenry (R-NC) and Subcommittee Chair Hill (R-AR) last night sent even sterner missives to Chairman Gruenberg and Secretary Yellen.

Bipartisan Push Begins For CEO Clawbacks

Ahead of its first of many hearings on the collapse of SVB and SBNY, Senate Banking Chairman Brown (D-OH) and Ranking Member Scott (R-SC) today sent letters to the former CEOs of the banks demanding that they answer for the bank failures, noting also that they will be expected to testify before the Committee if they are unable to do so next week.

OFR Blog: CRE, Residential Markets Pose Little Systemic Risk

Despite growing concerns about CRE and even potential systemic risk, an OFR blog post today concludes that neither the residential nor commercial real estate market poses a significant threat to the financial system.

Basel Stands By Its Rules, Contemplates New Supervisory Standards

The Basel Committee’s release following its March 14 meeting unsurprisingly notes the bank failures preceding it just days before, but attributes them principally to poor risk management in the face of rising rates.

GSEs Seek Public Comment on Credit Score Model Transition

The FHFA today announced…

9 03, 2023

DAILY030923

Eliza Allen2023-03-09T16:52:09-05:00March 9th, 2023|2- Daily Briefing|

Barr Emphasizes Steep Barriers to Bank Crypto, Retail CBDC

In remarks today, FRB Vice Chair Barr reiterated that banks should take an extremely cautious approach when engaging with cryptoassets or counterparties and stressed the need to include stablecoins within the regulatory perimeter. For the first time, the Fed made it clear that, while it is open to DLT, smart-contract, and similar payment-system innovations, it is dubious that any will have near-term benefits and all require careful regulatory design.

Expected Battle Lines Form Over CFPB Future

As predicted, today’s HFSC Subcommittee hearing on the CFPB was a partisan and raucous session, with Republicans focusing most strongly on legal and constitutional issues around the Bureau’s funding and enforcement authority and Democrats defending both its legality and effectiveness. Much will come of this in terms of HFSC and floor votes, but we expect no statutory change in this Congress under this President.

Hill Sets Table for Bipartisan Crypto Action

Today’s Digital Assets Subcommittee hearing was considerably more conciliatory than the CFPB session earlier today, with Chairman Hill (R-AR) making clear in his opening statement that he is not launching a partisan attack against the SEC, the banking agencies, or the White House. He hopes instead to press bipartisan legislation, thanking former Chair Waters (D-CA) for her work on stablecoins and emphasizing the need not only for new law there, but also across the array of pending digital-asset questions.

Daily030923.pdf…

22 02, 2023

DAILY022223

Eliza Allen2023-02-22T16:44:44-05:00February 22nd, 2023|2- Daily Briefing|

BIS Backs Away From Old CBDC, Presses New “Unified Ledger”

BIS General Manager Agustín Carstens today distanced the global central bank somewhat from its prior calls for two-tier CBDC as quickly as possible (see Client Report CBDC6).

Administration Drops FHA Premiums in Broad Housing Push

In a victory for mortgage lenders and defeat for private mortgage insurance and the GSEs, Vice President Harris announced that FHA will shortly reduce mortgage premiums by .30 percent, saving the average homeowner $800 in total premiums or $67 a month.

GOP Opens Anti-CBDC Campaign

Starting the GOP’s 2023 campaign against CBDC with a specific initiative, Rep. Tom Emmer SP (R-MN) and nine Republicans have introduced H.R. 1122.

FDIC Found Remiss re Systemic Resolution

In its assessment of challenges facing FDIC leadership, the Office of Inspector General (OIG) finds that the agency may not be ready to handle an OLA or systemic resolution, nor is it yet able to assess climate financial risk and sanctions compliance.

FHFA Looks Into FHLB-Member Community Activities

Perhaps advancing FHFA Director Thompson’s commitment to review aspects of the FHLB System, her agency today released a request for views on the extent to which a Home Loan Bank member supported its community to retain eligibility for long-term System advances.

Daily022223.pdf…

24 01, 2023

DAILY012423

Eliza Allen2023-01-24T16:47:35-05:00January 24th, 2023|2- Daily Briefing|

FSB Chair Presses Need to Finalize Global Crypto Standards

In remarks today, FSB Chair Klaas Knot reiterated FSB’s 2023 priorities regarding NBFI, crypto, and climate change risks, also emphasizing that the FSB seeks to improve financial resilience rather than predicting the cause of the next financial crisis.

McHenry, Hill Suggest Crypto Action Plan

In a new tweet, HFSC Chairman McHenry (R-NC) emphasized the crypto plan he discussed earlier in a media interview.

Brown, Van Hollen Press Tough TLAC, Regional-Bank Resolvability Rule

Senate Banking Committee Chairman Brown (D-OH) and Sen. Van Hollen (D-MD) sent a letter to FDIC Chairman Gruenberg and FRB Vice Chair Barr late yesterday praising the agencies’ recent ANPR on large bank resolution standards (see FSM Report RESOLVE48), calling for TLAC that prevents taxpayer bailouts in the event of failure.

CFPB Kicks Off Credit Card Regulatory Rewrite

Following its credit card late-fee notice of proposed rulemaking (see FSM Report CREDITCARD35), the CFPB today sought comment on the credit card sector as a whole for its biennial review of the industry.

Daily012423.pdf…

17 03, 2022

DAILY031722

Eliza Allen2023-04-03T14:33:52-04:00March 17th, 2022|2- Daily Briefing|

Fed, FHFA Leadership Advance

As anticipated last night, the Senate Banking Committee yesterday advanced all the Fed nominations and that of Sandra Thompson as FHFA director. However, Lisa Cook’s nomination was tied on a strictly partisan basis, meaning that it was not approved by Senate Banking but is nonetheless discharged to Senate Majority Leader Schumer (D-NY).

HFSC Hikes Array of Anti-Russia Sanctions

In the first of a series of markups, HFSC today approved 5 bills ramping up sanctions against Russia and Belarus. The most controversial of them, H.R. 7080 (Waters, D-CA), would broaden FinCEN’s ability to obtain information about the transactions of Russian oligarchs in the US.

Chopra Uses Rate Hike to Press Competition Inquiries

Describing the CFPB as “the arm of the Federal Reserve System that is fully focused on consumers,” Director Chopra today issued a statement following yesterday’s rate hike.

Senate Democrats Take Turns Whacking Wells Fargo

Senior Democrats today took sharp issue with Wells Fargo’s refi lending, asserting it was discriminatory and seeking an array of data from the bank and action by federal agencies. Senate Banking Chairman Brown (D-OH), Majority Whip Durbin (D-IL), and other senators called on HUD and the CFPB to investigate findings in a recent Bloomberg story, confining their comments to a general attack on discrimination without setting a date for a reply or any specific matters the agencies are to review.

Daily031722.pdf…