#Lummis-Gillibrand – Federal Financial Analytics

17 04, 2024

DAILY041724

Eliza Allen2024-04-17T17:36:07-04:00April 17th, 2024|2- Daily Briefing|

Global Regulators Tackle NBFI Margining, Collateral Transformation

As it has long promised, the FSB today issued a consultation on standards designed to buttress derivatives, commodity, and securities-financing markets under stress through more stringent margining and collateral requirements.

Basel Head Says Go Slow re AI Risk, Supervisory Models

Basel’s Secretary General, Pablo Hernández de Cos, today focused on AI’s risk-reward profile in the banking sector, concluding that it raises a series of profound questions global regulators must work cooperatively to address.

Lummis, Gillibrand Begin Senate Stablecoin Debate

As long anticipated, Sens. Lummis (R-WY) and Gillibrand (D-NY) today introduced a significantly revised version of their 2022 Bill (see FSM Report CRYPTO28) laying out U.S. stablecoin standards.

FIO Subpoena Power Faces Rollback

At HFSC’s mark-up today, the committee began with Rep. Fitzgerald’s (R-WI) Insurance Data Protection Act, H.R. 5335, which would repeal the Federal Insurance Office’s authority to subpoena insurance companies for data collection.

HFSC Likely to Pass RegTech Bill

At HFSC’s extended mark-up today, the committee turned to H.R. 7437, a bipartisan bill that would require federal banking regulators to regularly review and report to Congress on their use of technology to ensure they’re equipped to address threats to the financial system.

HFSC Set to Pass AOCI Recognition, Systemic-Risk Designation Study Measures

Continuing our coverage of today’s mark-up, HFSC was generally supportive of the two bills on the agenda from Democrats, H.R. 4206 from Rep. Sherman (D-CA) requiring large banks with available for sale securities to mark to market …

13 07, 2023

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Eliza Allen2023-07-13T16:52:37-04:00July 13th, 2023|2- Daily Briefing|

FSB Sees Climate-Risk Disclosure, Analytical Progress

The FSB today released a progress report on its Roadmap for Addressing Climate-Related Financial Risks that updates work toward the four key goals identified in its 2021 Roadmap. Progress is evident via the International Sustainability Standards Board’s (ISSB) disclosure standards, with the FSB urging IOSCO quickly to endorse them.

New Lummis-Gillibrand Crypto Bill Faces Steep Odds

Sens. Lummis (R-WY) and Gillibrand (D-NY) yesterday introduced an updated version of their comprehensive crypto bill (see FSM Report CRYPTO28). Changes include increased consumer protection provisions, AML penalties, proof-of-reserves and asset segregation requirements, requirements for all cryptoassets – aside from truly decentralized ones – to register with the CFTC and requirements also for all payment stablecoins to be issued by financial institutions.

FTC Settlement May Signal Move into Crypto Regulation

Wading into crypto regulation, the FTC today reached a settlement with the crypto platform Celsius Network, permanently barring it from handling customer assets and charging three executives with misleading customers. It remains to be seen if the FTC expands its enforcement scope to other crypto entities under SEC scrutiny for investor-related risks, but a growing FTC presence in this sector could cast a formidable shadow given the CFPB’s more limited enforcement powers.

Daily071323.pdf…

27 01, 2023

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Eliza Allen2023-01-27T17:09:47-05:00January 27th, 2023|2- Daily Briefing|

IOSCO Report Calls for More Hedge-Fund Liquidity Data, Studies Continue on MMFs/OEFs

IOSCO today released its Investment Funds Statistics Report, consisting almost entirely of data on matters such as leverage, portfolio liquidity, and fund exposures. The paper also mentions recent SEC proposals to amend the investment adviser reporting form and to require more frequent portfolio reporting.

Fed Takes Tough Stand Against Wyoming Crypto Charter

The Federal Reserve today took two policy-making actions cracking down on non-traditional charters. We will shortly provide clients with an alert and then an in-depth analysis of a new Fed policy redefining state-member bank charter powers.

Fed Not Only Quashes Custodia, But Also Constrains Non-Traditional Charter Powers

In addition to rejecting Custodia’s member application (see prior FedFin alert), the Fed today issued a sweeping policy statement scuttling efforts to use uninsured state member banks for activities impermissible for state IDIs and, in most cases, those allowed for national banks.

White House Expands Crypto Legislative Demands

In a new White House crypto “roadmap,” National Economic Council Director Brian Deese largely reiterated actions such as those by the Fed today and ongoing efforts to block AML and sanctions violations in this volatile sector.

Daily012723.pdf…

21 11, 2022

M112122

Arezou Rafikian2022-11-21T16:48:57-05:00November 21st, 2022|6- Client Memo|

What Will Be Done, Not Just Said, To Fix FTX

The only question left unanswered about FTX is whether it was a purposeful scam as more than a few clients conclude or a case of implacable forces ending the era of easy money that just got the better of another wunderkind whose awesome skills turned out to be largely confined to costumery conveying inspired innovation to all too many vulnerable investors and gullible politicians. No matter which it is or even – as I think – if it’s a bit of both, FTX is a debacle that will change U.S. financial policy for the better unless FTX drives still more crypto chaos that then spills over to core financial infrastructure and intermediation.

m112122.pdf…

21 11, 2022

Karen Petrou: What Will Be Done, Not Just Said, To Fix FTX

Arezou Rafikian2022-11-22T13:18:11-05:00November 21st, 2022|The Vault|

The only question left unanswered about FTX is whether it was a purposeful scam as more than a few clients conclude or a case of implacable forces ending the era of easy money that just got the better of another wunderkind whose awesome skills turned out to be largely confined to costumery conveying inspired innovation to all too many vulnerable investors and gullible politicians. No matter which it is or even – as I think – if it’s a bit of both, FTX is a debacle that will change U.S. financial policy for the better unless FTX drives still more crypto chaos that then spills over to core financial infrastructure and intermediation. I’ve gotten a lot of questions about crypto policy after my brief discussion in last week’s talk on the midterm’s policy impact. Here, more on both the legislative outlook and what regulators may finally bring themselves to do even if Congress can’t get itself together any better next year than in so many before it.

First more on why stablecoins are the cryptoasset most likely to come under a new federal gun. This isn’t because they deserve it more than any other cryptoasset – although they might – but because policy thinking about what to do with stablecoins is most advanced and, thus, bipartisan negotiations in the House are closest to the finish line.

That said, even stablecoin standards aren’t going to be easy. The clearest articulation of how new law might work is S. 4356, the Lummis-Gillibrand …

19 08, 2022

Al082222

Eliza Allen2023-01-04T11:09:21-05:00August 19th, 2022|3- This Week|

A Payment System Premised on Peccadillos?

As we noted at the start of this month, August may seem quiet, but that’s only because Congress is more or less muffled. Regulators remain busy, with the CFPB a-churn with new actions. Our in-depth analyses of the Bureau’s new digital-marketing rule (see FSM Report FINTECH30) and data-safeguards standards (see FSM Report INFOSEC28) make clear that the CFPB never sleeps. Bank regulators are also wakeful, with the most recent evidence of this to be found in the FDIC’s NSF-fee clamp down and the Fed’s supervisory cryptoasset statement and striking new payment-system access policy (see FSM Report PAYMENT25). As our in-depth analysis describes, this policy could well redefine winners and losers across the entire spectrum of U.S. financial services.

Al082222.pdf…

3 08, 2022

DAILY080322

Eliza Allen2023-01-04T13:29:59-05:00August 3rd, 2022|2- Daily Briefing|

Senate Ag Crypto Bill Lauds CFTC, Faces Many Obstacles

As we anticipated as the crypto debate continues, the Senate Agriculture Committee has sought to claim jurisdiction with a new, bipartisan bill granting the CFTC broad regulatory, supervisory, and enforcement powers over most digital-asset platforms and the assets traded on them.

ECB Study Favors CBDCs Over Private Crypto for Cross-Border Payments

A study released by the ECB today argues that CBDCs would be a cheaper, safer, and more effective vehicle for cross border payments for global transactions than privately-issued cryptoassets or stablecoins. Based on assessment of global, not just EU markets, the study thus has implications for those in the U.S. opposing a CBDC.

FRB-Minneapolis Renews Attack on Big-Bank Capital Resilience

Renewing its attack on big-bank capital ratios, the Federal Reserve Bank of Minneapolis today released its own stress-test conclusions, reinforcing its president’s longstanding view that the largest U.S. banks are woefully under-capitalized even though test results show considerable variance on a bank-by-bank basis as well as overall resilience.

FRB Philadelphia President Touts Fintech’s Financial Inclusion Potential

FRB Philadelphia President Patrick Harker today stated that fintech can increase financial inclusion, specifically citing buy-now pay-later products because they offer financial services to low- to moderate-income customers who would otherwise be locked out of traditional lending because they are more likely to be non-White, lower earning, and younger.

Daily080322.pdf…

22 07, 2022

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Arezou Rafikian2023-01-04T15:54:54-05:00July 22nd, 2022|3- This Week|

STABILIZING STABLECOINS?

On Wednesday, the House Financial Services Committee will mark up an array of bills that may or may not include as-yet-unintroduced legislation to rewrite the federal framework governing stablecoins. As we noted (see Client Report FSOC27), the sector’s travails have concentrated Congressional attention on the action first outlined in November by the President’s Working Group (see Client Report CRYPTO21), with any legislation brought to a vote this week sure to reflect the latest thinking from both the PWG and at least some of the rest of the Financial Stability Oversight Council. It only leaked revisions to the PWG plan and it’s far from clear if the CFTC agrees with these, but HFSC gives scant thrift to the CFTC. It falls outside the Committee’s jurisdiction and thus what it wants must be advanced by the Agriculture Committee for it to have any bearing on floor deliberations.

AL072522.pdf…

23 06, 2022

DAILY062322

Eliza Allen2023-01-25T15:46:26-05:00June 23rd, 2022|2- Daily Briefing|

Treasury Tries Transparency

Treasury and its inter-agency working group today advanced its earlier findings (see Client Report TMARKET2) with a public consultation on data transparency.

House Ag Subcommittee Advances CFTC Digital-Asset Authority

Advancing proposals to give the CFTC jurisdiction over aspects of the crypto market as proposed in the Lummis-Gillibrand bill (see FSM Report CRYPTO28), the House Agriculture Subcommittee on Commodity Exchanges, Energy, and Credit today advanced statutory changes that not only give the CFTC this authority, but also expand the committee’s jurisdiction.

OCC Targets Macro Risks

The OCC today released its latest analysis of risks to federally-chartered institutions, reiterating longstanding operational-risk concerns now heightened by the challenges facing banks seeking to retain or hire specialized personnel.

House Republicans Craft New Data-Privacy Regime

HFSC Ranking Member McHenry (R-NC) and panel Republicans today released a draft bill establishing consumer-data privacy rights with an eye on emerging financial providers and products.

Daily062322.pdf…

22 06, 2022

FedFin: Fed Comes Under Heightened Political Pressure

Arezou Rafikian2023-01-25T15:58:37-05:00June 22nd, 2022|The Vault|

As we expected, today’s Senate Banking session with Chairman Powell is a preview of broader national debate ahead of the midterm election. Democrats generally sought to emphasize their understanding of inflation’s costs without lambasting the Fed and, indirectly, the Biden Administration. Still, Sens. Ossoff (D-GA) and Warnock (D-GA) pressed Mr. Powell on the Fed’s failure to begin to tighten last summer. Republicans were strongly united in lambasting….

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