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6 12, 2022

DAILY120622

2022-12-06T16:40:03-05:00December 6th, 2022|2- Daily Briefing|

FSB Again Ratifies Focus on Crypto, Climate, Macro Risks

Following its meeting today, the FSB Plenary announced 2023 priorities to be finalized in January.  Focus will center on heightened monitoring of financial stability risks, enhanced NBFI and CCP resilience, work on the global crypto regulatory framework, cross-border payments reform, cyber and operational resilience, and financial risks from climate change.

FinCEN Targets De-Risking Compliance

Pointing to possible enforcement actions, Treasury Assistant Secretary for Terrorist Financing and Financial Crimes Elizabeth Rosenberg today noted FinCEN concerns with the extent to which institutions apply a rules-based approach to de-risking rather than a risk-based one, leaving it vulnerable to fast-changing risks and without access to valuable suspicious activity information.

Warren, GOP Senators Put Silvergate On FTX Hotseat

Reflecting at least some bipartisan agreement on the need for new crypto standards, Sens. Warren (D-MA), Kennedy (R-LA), and Marshall (R-KS) late yesterday sent a letter to the CEO of Silvergate Bank demanding detailed information regarding its relationship with FTX and FTX affiliates.

GOP Threatens Woke Asset Managers With BHC Designation

The Senate Banking GOP report today on ESG asset management contains an interesting aside about the extent to which passive ownership of banking organizations could make the three largest asset managers de facto BHCs.

Brown Fires First Shot in 2023 ILC Wars

Putting down a market for the next Congress, Senate Banking Chairman Brown and two Democratic colleagues today introduced their bill end bar ILC charters for nonbank parents.

Daily120622.pdf

5 08, 2022

Al080822

2023-01-04T13:17:39-05:00August 5th, 2022|3- This Week|

An Unquiet August

As is all too evident, campaign season is roaring and Democrats are doing all they can to persuade Americans that allowing them to retain Congressional control is the best way to ensure a better economic outcome than pretty much anyone else thinks possible.  As of this writing, the “Inflation Reduction Act” is moving forward, with the Senate thus set for a “vote-a-rama” in which all sorts of extraneous issues appear seemingly out of nowhere as appendages to a must-pass measure.  We are watching this closely and will advise clients as soon as we identify legislation with financial-sector strategic impact.  And, while August is indeed vacation season, federal regulators remain very busy in part because several cherished initiatives are at grave risk should Republicans gain control of both the House and Senate.  As we have noted, the CFPB is less frightened of Congress because it’s less scrupulous about the niceties of administrative action, but it will use August’s seeming quiet to drop some high-impact initiatives.

Al080822.pdf

24 06, 2022

DAILY062422

2023-01-25T15:43:05-05:00June 24th, 2022|2- Daily Briefing|

ILC, Overdraft Bills Face Tough Path to Passage

The vote is now out on H.R. 5912, Rep. Garcia’s (D-IL) bill to circumscribe ILC charters (see FSM Report ILC13).  As we noted during the mark-up, the final bill includes modified grandfather language designed to protect existing parent companies without giving them future protection from BHC-like standards.  The bill passed narrowly – 28-25 – and is likely to face a still more challenging time on the House floor.

HFSC Wants Tough New Broker-Dealer Standards

HFSC’s investigative report today on the meme-stock crisis takes a strikingly different approach than the SEC’s pending rule.  While the Commission is focused on circumscribing payment for order flow and other market practices, HFSC principally targets broker-dealer resilience and the role of the DTCC and other critical market infrastructure.  It thus calls on Congress, the SEC, the DTCC, and the NSCC to create a new emergency-liquidity facility for clearing brokers and lays out an array of safety-and-soundness standards it wants the SEC and FINRA to mandate.

GOP Targets Thompson

Picking up their complaints about HFSC’s housing focus from Wednesday’s mark-up, Committee Republicans today called on Chairwoman Waters (D-CA) to bring FHFA Director Thompson before the panel.  They are concerned about the safety and soundness of the housing finance system amid increasing recession forecasts, highlighting the urgent pressures of higher mortgage rates and declining household income.

Daily062422.pdf

22 06, 2022

DAILY062222

2023-01-25T15:55:01-05:00June 22nd, 2022|2- Daily Briefing|

Treasury Issues Stern Sanctions Warning to Foreign Banks

In remarks today to UAE bankers, Deputy Treasury Secretary Wally Adeyemo warned that foreign financial institutions are subject to possible sanction if transactions touch sanctioned entities via any U.S.-domiciled point.

CFBP Follows Threats with Credit-Card Action Plan

Consistent with its promises as recently as last week, the CFPB today released an ANPR examining ways to govern what it calls excessive late fees charged by credit-card issuers and announced broader initiatives in this sector.

CBDC Authorizing Legislation Takes Shape

Building on his HFSC subcommittee’s CBDC hearing record (see Client Report CBDC13), Rep. Jim Himes (D-CT) today released a white paper outlining legislation he plans to advance to authorize and define CBDC for the United States.

House Set to Report Revised ILC Reform Bill

As anticipated, HFSC seems likely to report H.R. 5912, ILC-reform legislation introduced by Rep. Chuy García (D-IL) (see FSM Report ILC13).  The measure subjects ILCs to bank regulation, rolling back the FDIC’s rule during the Trump Administration providing these charters with unique regulatory advantages (see FSM Report ILC15).

Daily062222.pdf

10 06, 2022

DAILY061022

2023-01-27T15:45:24-05:00June 10th, 2022|2- Daily Briefing|

Treasury Emphasizes Crypto BSA Compliance

Treasury Deputy Secretary Wally Adeyemo today outlined his agency’s digital-asset priorities not only in adherence to the President’s executive order (see Client Report CRYPTO26), but also recent developments.  Treasury’s top priority is ensuring BSA compliance in this sector, followed by addressing illicit-finance risk posed by unhosted wallets.

HFSC to Advance Overdraft, ILC Legislation

The schedule for Tuesday’s HFSC mark-up includes a revised version of H.R. 4277, long-pending Maloney (D-CA) legislation to restrict overdrafts (see FSM Report OVERDRAFT4).  The Democratic memo acknowledges that many banks have reformed or eliminated overdraft and related fees, but says some continue to charge pernicious fees and others could resume this practice without new law.

GAO Recommends Fed Improve Alternative-Data Use, Stress Testing

The GAO today issued several recommendations to the Fed on alternative data use and improving stress testing.  The alternative data recommendations reiterate a prior call to the FDIC related to working with fintechs and vendors, calling for the Fed in coordination with other banking regulators and the CFPB to provide clear written guidance to banks who engage with third-party fintech lenders on the appropriate use of alternative underwriting data.

Daily061022.pdf

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