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2 03, 2023

DAILY030223

2023-03-03T17:11:19-05:00March 2nd, 2023|2- Daily Briefing|

Senate GOP Reiterates Anti-Woke Demands

At the same time as the Senate passed a resolution overturning the Labor Department’s rule authorizing pension ESG investments, Sens. Rubio (R-FL), Cruz (R-TX), Cramer (R-ND), Cotton (R-AR), Blackburn (TN), and Scott (R-FL) reintroduced legislation (S. 583) to permit the FDIC to terminate the insured status of depository institutions refusing to provide services to Federal contractors.

HFSC GOP Reams CFPB Late-Fee Proposal

Seventeen HFSC Republicans sent a letter late yesterday to CFPB Director Chopra strongly protesting the Bureau’s recent NPR targeting credit card late fees (see FSM Report CREDITCARD36).

Gensler Boosts SEC Custody Rewrite

SEC Chairman Gensler today reiterated and emphasized his strong support for the agency’s proposal to rewrite the rules governing custody services (see FSM Report CUSTODY5), arguing that they would strengthen safeguards and provide a much-needed expansion to the protections qualified custodians provide.

Bipartisan Senators Target Another Crypto Culprit

Following Sen. Warren’s (D-MA) pledge to introduce bipartisan legislation extending AML protections to crypto firms (see Client Report CRYPTO39), Sens. Warren, Van Hollen (D-MD), and Marshall (R-KS) sent letters yesterday to the leadership of the crypto platform Binance, alleging that the company built an intentionally opaque corporate structure to circumvent securities and AML laws and facilitate money laundering and sanctions evasion.

Brown Demands Branch-Closure Hearings, Merger Policy

In the midst of what may well be negotiations over the nomination of Michael Hsu as Comptroller and continuing controversies over big-bank mergers, Senate Banking Chairman Brown (D-OH) today wrote

12 12, 2022

m121222

2022-12-12T15:50:00-05:00December 12th, 2022|6- Client Memo|

Where New Crypto Enforcement, Regulatory Action Will Land

As we’ve learned over the years, a memo written is a memo shared.  So it was with my last note on what were then little-noticed links between the tumultuous cryptosphere and what regulators assured us was a banking sector aloof from these violent downdrafts.  Sens. Warren and Smith then picked up the examples of several bank/crypto hot spots.  The result of new facts combined with heightened political risk will surely lead the bank regulators to follow the tried-and-true strategy of slapping a lot of enforcement actions around before agency heads are hauled up to the Hill.  Other than stablecoin legislation, new crypto law is uncertain, but after all the enforcement actions will also surely come new banking crypto regulation….

m121222.pdf

12 12, 2022

Karen Petrou: Where New Crypto Enforcement, Regulatory Action Will Land

2022-12-12T15:50:07-05:00December 12th, 2022|The Vault|

As we’ve learned over the years, a memo written is a memo shared.  So it was with my last note on what were then little-noticed links between the tumultuous cryptosphere and what regulators assured us was a banking sector aloof from these violent downdrafts.  Sens. Warren and Smith then picked up the examples of several bank/crypto hot spots.  The result of new facts combined with heightened political risk will surely lead the bank regulators to follow the tried-and-true strategy of slapping a lot of enforcement actions around before agency heads are hauled up to the Hill.  Other than stablecoin legislation, new crypto law is uncertain, but after all the enforcement actions will also surely come new banking crypto regulation.

First, though, to incoming enforcement actions as these lay the groundwork for next-gen regulation.  Any bank with big crypto exposures no matter how otherwise pristine is already under its examiner’s gun in terms of immediate demands for an inventory of all crypto actions anytime for anyone.  The senators include this in their asks, looking for names as well as activities and customers.  But the banking agencies were surely already hot on this trail.

Any bank that failed to mind its prior-notice manners will surely get a public drubbing so that regulators can point to a host of cases that uncover all risks anywhere they lurk.  And banks now casting covetous eyes on cheap crypto assets will get a talking to from Washington if their own internal risk managers haven’t already …

23 05, 2022

DAILY052322

2023-02-21T13:53:43-05:00May 23rd, 2022|2- Daily Briefing|

FRB-NY Staff: Mandatory Flood Insurance Harms LMI Households

A New York Fed blog post today points to another important, unintended consequence of well-meaning regulation: the adverse impact of mandatory flood-insurance coverage on LMI households.

FRB Atlanta Staff Bolsters Proposed Cash Acceptance Mandate

blog post today from the Federal Reserve Bank of Atlanta strengthens the case for the mandate for retailer cash acceptance recently approved by the House Financial Services Committee.

Kansas City Fed Finds Persistent Commodity-Market Price Hikes, Volatility

Reflecting concerns in a recent Petrou op-ed, the Federal Reserve Bank of Kansas City today released a report differing from the FOMC’s optimistic inflation forecasts at least as far as they relate to commodities.

HFSC Tackles Disability Rights

Tomorrow’s HFSC Subcommittee on Diversity and Inclusion hearing on disability rights will focus not only on housing access, but also on the extent to which a broad range financial services are easily accessible to persons with disabilities.

Fed Survey Shows Significant LMI Investment in Payment, Investment Crypto

The Fed today released a report on household well-being in 2021, detailing an array of survey findings that generally show Americans feeling remarkably prosperous and satisfied.  The Fed cautions that this may no longer pertain, but the data do suggest what may be more than a passing rebound in economic resilience for at least some families.

Daily052322.pdf

20 05, 2022

DAILY052022

2023-02-21T14:11:57-05:00May 20th, 2022|2- Daily Briefing|

G7 Presses for Global Crypto Action

Preoccupied though it was with Ukraine, the G7 ministerial communiqué advances and hones global work on digital assets.  Most notably, it calls on the FSB to advance and implement comprehensive cryptoasset regulation.  As recent FSB statements indicate, the Board is contemplating its options; this G7 directive may accelerate work into more concrete standards more quickly, stipulating like-kind rules for like-kind activities.  The communiqué also calls global disclosure standards on stablecoin reserve assets and “encourages” jurisdictions to explore CBDC’s “international dimensions.”

Global Regulators Press for Harmonized, DeFi Cross-Border Payments

The BIS and CPMI today issued to papers supporting their work to build out the cross-border payment system advocated by the FSB (see FSM Report PAYMENT23).  The first paper lays out an aspirational global rulebook designed to ensure that all transborder nodes are premised on common standards for finality, certainty, and the other criteria essential to sound payment-system operations.  The second paper takes the concept of legal uniformity into the new arena of decentralized finance, laying out where DeFi might be applicable to cross-border payments with a best-execution DeFi construct, an approach for inter-operability among central banks and private banks, a DeFi utilities for AML/KYC identification, and a small-payment platform.

Daily052022.pdf

18 04, 2022

CBDC12

2023-03-02T10:52:31-05:00April 18th, 2022|5- Client Report|

BIS Finds Ways to Give Nonbanks Payment-System Access, Increase CBDC’s Inclusion Impact

As promised, we turn here to an in-depth analysis of a paper from global regulators on whether CBDC contributes to financial inclusion – one of the most vital arguments from those advocating CBDC in the U.S. and in many other nations.  The paper is not analytical, as it is based on interviews with nine central banks exploring retail CBDC, but all of those interviewed view CBDC as an effective tool to promote inclusion if designed to do so and the paper also surveys research to back up its findings.  It details numerous ways CBDC could prove inclusive, including a first-time assessment of how making certain CBDC aspects programmable and how regtech could permit nonbanks to enter the CBDC payment system without undue risk.

CBDC12.pdf

15 04, 2022

FedFin: BIS Finds Ways to Give Nonbanks Payment-System Access, Increase CBDC’s Inclusion Impact

2023-03-02T10:53:48-05:00April 15th, 2022|Uncategorized|

As promised, we turn here to an in-depth analysis of a paper from global regulators on whether CBDC contributes to financial inclusion – one of the most vital arguments from those advocating CBDC in the U.S. and in many other nations.  The paper is not analytical, as it is based on interviews with nine central banks exploring retail CBDC, but all of those interviewed view CBDC as an effective tool to promote inclusion if designed to do so and the paper also surveys research to back up its findings.  It details numerous ways CBDC could prove inclusive, including a first-time assessment of how making certain CBDC aspects programmable and how regtech could permit nonbanks to enter the CBDC payment system without undue risk…

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

25 02, 2022

SANCTION16

2023-04-04T15:20:26-04:00February 25th, 2022|5- Client Report|

FedFin Assessment: Sanctions, Crypto, CBDC Outlook all Change Following Invasion

In this report, we address many of the questions we’ve received about U.S. policy in the wake of Russia’s invasion into Ukraine.  We focus in particular on sanctions, but also address longer-term policy implications for the global payment system, cryptocurrency, and CBDC.  It is impossible to forecast final outcomes since Russia’s intentions are unknown with regard not only to Ukraine, but also peripheral nations it believes reside within its empire that are NATO members. Indeed, developments in some of them (e.g., Eastern Poland) are already arguably within the range of actions that might trigger NATO intervention and, with it, that of the U.S. and many consequences beyond the already-dangerous ones attendant to the Ukraine invasion.  As is usual, we will not attempt to forecast Fed monetary policy or that in other nations, but we here note the stresses created by global financial-market uncertainty and broader macroeconomic stress.

SANCTION16.pdf

1 12, 2021

Daily120121

2023-05-23T14:07:25-04:00December 1st, 2021|2- Daily Briefing|

FRB-NY Staff Assess CBDC Mission Impact
With Chairman Powell yesterday reiterating that the Fed will soon seek views on CBDC (see Client Report FEDERALRESERVE64), the New York Fed’s blog post today is a timely assessment of whether central-bank digital currency advances core central-bank missions.

CFPB Launches Anti-Overdraft, Pro-Portability Campaign
In concert with a new CFPB report, CFPB Director Chopra today announced that the Bureau will soon limit overdraft and NSF fees and undertake an array of other reforms to retail banking.

FFIEC Tackles New AML Priorities
Rec The FFIEC today released a significant rewrite of their BSA/AML examination manual, stressing not only an array of new priorities, but also recognition that current standards have unintentionally but often decisively encouraged derisking.

Daily120121.pdf

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