#house oversight

9 05, 2024

DAILY050924

2024-05-09T17:03:02-04:00May 9th, 2024|2- Daily Briefing|

Crypto-Custody Battle Back in Bank Regulators’ Laps

The House yesterday voted 228-182 to approve H.J. Res. 109, a GOP motion under the Congressional Review Act to revoke the SEC’s Staff Accounting Bulletin 121 requiring additional disclosures and balance-sheet recognition related to cryptoasset custody (see FSM Report CUSTODY5).

GOP Tries to Place Gruenberg Blame on President Biden

Late yesterday, the GOP leadership of the House Oversight Committee sought to escalate the political focus on FDIC Chair Gruenberg, writing to the White House to demand all communications with Mr. Gruenberg and others related to workplace conduct.

Brown, Scott Take Usual Stand on “Junk,” Credit-Card Fees

Today’s Senate Banking Hearing focused on “junk fees.”

Waters Focuses on FDIC Report, Not Gruenberg

Without directly supporting FDIC Chair Gruenberg, HFSC Ranking Member Waters (D-CA) today pointed to aspects of the Cleary report that focus narrowly on Mr. Gruenberg rather than all recent FDIC Chairs.

CFPB Heightens Attack on Credit Card Rewards

At today’s CFPB-DoT hearing on credit card rewards, Director Chopra indicated that the agency will protect points against currency devaluation, stop “bait and switch” scams, examine exclusive deals, and promote interest rate competition.

Climate Scenarios Show Significant Challenges

At close of business, the Federal Reserve released the results of the climate risk exploratory stress test imposed on six of the largest banks

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30 04, 2024

DAILY043024

2024-04-30T16:56:40-04:00April 30th, 2024|2- Daily Briefing|

Changes to Fed Reporting Requirements Augurs Shift in M&A Policy

The Federal Reserve has proposed two changes to reporting requirements related to merger-and-acquisition transactions.

Basel Rewrites Global CCR Standards

As anticipated, the Basel Committee today issued proposed counterparty credit risk (CCR) standards.

CFPB Price Complexity Study May Presage Action on Credit Cards, Mortgages, Savings Accounts

The CFPB today issued a report finding that increasing price complexity leads to higher transaction and total costs and increased consumer errors, with this not offset by increased competition.

House Oversight Subcommittee Considers CRE Risk

Today’s House Oversight Health Care and Financial Services Subcommittee hearing on commercial real estate focused on preventing systemic risk.  Chair McClain (R-MI) argued that the CRE market is generally strong, encouraging Congress and the Fed to eliminate red tape.

Daily043024.pdf

21 11, 2023

DAILY112023

2023-11-21T10:36:54-05:00November 21st, 2023|2- Daily Briefing|

Thompson: No Regulatory “Silos” in a Crisis

Reiterating much in FHFA’s sweeping FHLB report, FHFA Director Thompson today reinforced suggestions that FHLBs can avoid acting as lenders of last resort because there are no regulatory “silos” in a crisis.

IMF Reconsiders CBDC

On Friday, the IMF updated its CBDC work, concluding that it is prudent for most countries to consider CBDC implementation even though nations are increasingly hesitant to do so.

IMF: Nations Should Block Fintech Reg Arbitrage

A new IMF study finds that Fintechs adversely affect bank profitability, concluding that “well-designed” fintech regulations are necessary to foster a level bank-fintech playing field.

House Opens New Front vs. FDIC

Following an official HFSC investigation and a raft of letters from Democrats and Republicans, House Oversight Subcommittee on Health and Financial Services Chairwoman McClain (R-MI) along with Rep. Biggs (R-AZ) today sent a letter to Chairman Gruenberg requesting briefings, documents, and communications regarding harassment and workplace practices.

Daily112023.pdf

10 07, 2023

DAILY071023

2023-07-10T16:43:24-04:00July 10th, 2023|2- Daily Briefing|

HFSC Lays Out Its ESG Priorities

The majority staff memo ahead of Wednesday’s HFSC hearing on ESG follows the outline anticipated  last week and that laid out in the GOP agenda for ESG-related action (see Client Report ESG4).

OCC Concurs On Capital, Tries For The Merger Middle

Acting Comptroller Hsu today confirmed our assessment of Vice Chair Barr’s comments earlier today (see Client Report CAPITAL228) that the three banking agencies are aligned on the new capital construct to be shortly released for public comment.

Barr, Foster Demand Delay to Capital Rewrite

Anticipating Vice Chair Barr’s remarks this morning detailing near-term capital policy changes (see Client Report CAPITAL228), HFSC Financial Institutions Subcommittee Chair Barr (R-KY) and Ranking Member Foster (D-IL) sent a letter late Friday demanding that he appear before the Subcommittee to present the conclusions of his capital review and upcoming Basel III implementation plans prior to public release, asking also for details and likely outcomes for industry consolidation.

House Republicans Keep Spotlight On FRB-SF

Continuing the GOP’s attack on the San Francisco Fed’s supervision of SVB in the wake of what many believe are “woke” priorities, House Oversight Committee Chairman Comer (R-KY) was joined today by Financial Services Subcommittee Chairwoman McClain (R-MI) in sending a letter to FRB Chairman Powell taking serious issue with the Federal Reserve Bank of San Francisco and the Fed for what they describe as SVB-related transparency and communication failures.

BIS Survey: Most Central Banks Considering CBDCs

The BIS …

5 06, 2023

DAILY060523

2023-06-05T16:41:32-04:00June 5th, 2023|2- Daily Briefing|

FRB-NY: Bank Discrimination Not To Blame For More Black Fintech PPP Loans

A new paper from Federal Reserve Bank of New York staff concludes that differences in PPP applications between white and Black firms entirely explains why Black PPP borrowers received a greater share of loans from fintechs rather than banks.  This issue has been a longstanding point of contentiousness used by fintech advocates to argue that their business model warrants less regulation on grounds that it is also less discriminatory.  However, the paper’s results suggest that any fintech-driven mitigation of racial disparities in lending outcomes is the product of higher Black-borrower applications, not higher approval rates that would demonstrate less discrimination.

GOP Leadership Presses Treasury, SEC On US/EU Climate Coordination

Senate Banking Ranking Member Scott (R-SC) was joined today by House Oversight Committee Chairman Comer (R-KY) in sending letters to Treasury Secretary Yellen and SEC Chairman Gensler taking serious issue with reports that the Department and Commission have been facilitating EU regulators’ efforts to advance international climate-related disclosure policies and ESG initiatives.  Although the letter references U.S. companies, Ranking Member Scott and Chairman Comer sharply criticize EU standards they say would cause serious business and financial system harm through “onerous extra-territorial climate mandates.”

Daily060523.pdf

24 05, 2023

DAILY052423

2023-05-24T17:16:58-04:00May 24th, 2023|2- Daily Briefing|

New Fed Paper Shows Link Between Twitter, Market Sentiment, Run Risk

A new FRB staff paper uses natural-language models and social-media data to craft a “twitter sentiment index” (TSI) that is then compared to actual market conditions.

Democrats Press Clawback, Regulatory Fixes as HFSC Considers Transparency Measures

Today’s HFSC mark-up so far has focused on one of Rep. Barr’s (R-KY) three regulatory transparency bills, with Democrats proposing a series of amendments without any deciding votes.

House Oversight Panel Focuses On Supervisory Accountability, Reform

At today’s hearing of the Financial Services Subcommittee of House Oversight on bank failures and supervision at the San Francisco Fed, Subcommittee Chairwoman McClain (R-MI) opened with a series of sharply-worded questions on who oversaw the bank, what factors might have distracted them from traditional supervision, why glaring risk factors were not more forcefully addressed, whether regulators were unduly complacent, whether the Fed and FDIC used all of their regulatory tools, and if the agencies have been objective and transparent in their bank failure post-mortems as well as their accounts of the systemic risk exception.

Markup Votes Postponed for Transparency, LLPA Bills

Since our last alert, Democrats continued to submit amendments for Rep Barr’s (R-KY) transparency bill at today’s HFSC markup and party lines cemented over Rep. Davidson’s (R-OH) LLPA bill.

Daily052423.pdf

30 08, 2022

DAILY083022

2023-01-03T16:41:05-05:00August 30th, 2022|2- Daily Briefing|

FRB-Atlanta: Cardless Consumers Pay More Per Transaction

After the Fed announced imminent FedNow liftoff, the Federal Reserve Bank of Atlanta yesterday issued a release summarizing research that concludes that lower-income consumers pay considerably more per each payment transaction due the use of cash and debit cards that do not provide credit-card rewards and the overall price increase that merchants charge to compensate for interchange fees.

Oversight Subcomm Chair Presses Agencies on Crypto Oversight, Jurisdictional Warfare

The Chairman of the House Oversight Committee’s Subcommittee on Economic and Consumer Policy, Rep. Raja Krishnamoorthi (D-IL), today sent letters to Treasury, the SEC, the CFTC, the FTC, and several major crypto exchanges demanding information and documents showing what each is doing to combat cryptocurrency-related fraud.  Calling for improved regulation and guidance, the Chairman criticizes regulators for their insufficient coordination in response to escalating risks.

Daily083022.pdf

28 03, 2022

DAILY032822

2023-03-27T15:53:58-04:00March 28th, 2022|2- Daily Briefing|

Hsu Open to New Merger Policy on Inter-Agency Basis

As noted on Friday, the FDIC has now officially released a controversial RFI on bank-merger policy (see FSM Report MERGER9).  Press included a statement from Acting Comptroller Hsu indicating that he supports this public-comment effort, especially with regard to reconsidering financial stability at larger banks.

Progressives Propose a Treasury, not Central Bank, Digital Dollar

As anticipated when we reviewed a Brookings proposal for a “Treasury dollar“, legislation (H. R. 7231) has now been introduced to create what its sponsors call “ECASH” – that is, a digital currency issued by the U.S. Treasury, not the Federal Reserve.  Introduced by Rep. Stephen Lynch (D-MA) and several progressives, the ECASH program would launch three Treasury pilots under a new high-level Treasury office to create a digital dollar with physical cash’s privacy and anonymity.

House Panel Presses CS on Sanctions Compliance

Signaling a new source of sanctions-related reputational risk, the House Oversight Committee today demanded information from Credit Suisse following assertions that the bank had ordered counterparties to destroy Russia-related documentation.

Chopra Goes after Charters, Activities, Officers for Repeat Enforcement Violations

CFPB Director Chopra today expanded his attack on large financial-services firms, arguing that those who repeatedly violate consumer-protection or other core standards should lose their charters.

Daily032822.pdf

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