#Maloney – Federal Financial Analytics

27 07, 2022

DAILY072722

Eliza Allen2023-01-04T15:37:13-05:00July 27th, 2022|2- Daily Briefing|

Waters: Stablecoin Bill Would Authorize CBDC

At the opening of today’s HFSC markup, Chairwoman Waters (D-CA) and Ranking Member McHenry (R-NC) announced that they were close to a bipartisan draft of stablecoin legislation and hope to complete one by the August recess. Chairwoman Waters said the bill would include authorization for CBDC to ensure U.S. global competitiveness. We would expect this to follow the outline of the draft Rep. Himes (D-CT) released this spring.

Revised Overdrafts, Credit Data Bills Advance

The HFSC today, although postponing recorded votes, lightly approved H.R. 4277, Rep. Maloney’s (D-NY) overdraft protection bill. The bill would limit overdraft fees banks can charge customers to no more than one per month or six per year, allowing the CFPB to raise that limit; require the fees to be reasonable and proportional to the amount overdrawn and the cost of providing coverage for the overcharge; prevent institutions from posting transactions in an order that would maximize overdraft fees; and require banks to let customers decide if they want coverage. It appears that the bill will not have the option for the CFPB to impose a 24-month moratorium included in the legislation when it last came before the Committee, but we will review the bill as reported to determine if that is the case.

Daily072722.pdf…

24 06, 2022

DAILY062422

Eliza Allen2023-01-25T15:43:05-05:00June 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…

10 06, 2022

DAILY061022

Eliza Allen2023-01-27T15:45:24-05:00June 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…

8 02, 2022

Daily020822

Arezou Rafikian2023-04-05T11:47:05-04:00February 8th, 2022|2- Daily Briefing|

Fed Study Attempts to Address Scope of U.S. Macroprudential Risk
Building on prior FRB research on the increasingly porous regulatory perimeter, a new FRB staff study crafts quantitative measures of the U.S. financial system to assess growing macroprudential risk. In contrast to the relatively-sanguine view of asset prices in the Fed’s most recent stability report (see Client Report SYSTEMIC92), the study finds that cyclical credit flows into unregulated institutions are a leading indicator of systemic risk.

FRB-NY: Stablecoins Won’t Last
The Federal Reserve Bank of New York yesterday posted a paper concluding that stablecoins are not likely to prove a lasting part of the U.S. financial system. We will shortly provide clients with an in-depth analysis of today’s HFSC hearing; the staff memo preceding it clearly takes a different stand, as did the PWG’s report (see Client Report CRYPTO21).

Democrats Detail Beneficial-Ownership Regulatory Standards
Sen. Brown (D-OH) and Reps. Waters (D-CA) and Maloney (D-NY) late yesterday released their comment letter to Secretary Yellen on FinCEN’s initial beneficial-ownership standards. The letter generally praises the proposal, including its broad beneficial-owner definition and those for “substantial control,” “ownership interest,” and “reporting company.”

Basel Chief Pleads for Tough III/IV Standards
The Basel Committee’s new chair, Pablo Hernández de Cos, today told the European Parliament that jurisdictions must quickly finalize the Basel III/IV package of capital reforms. As noted yesterday, Acting FDIC Chairman Gruenberg included these in his near-term priorities, departing from prior FDIC and Fed statements by …

26 10, 2021

Daily102621

Arezou Rafikian2023-06-05T13:54:59-04:00October 26th, 2021|2- Daily Briefing|

McWilliams Positions Herself as Crypto Liberal Among Agency Skeptics
In remarks posted this morning, FDIC Chair McWilliams provided an update on the inter-agency “crypto sprint.” Ms. McWilliams made it clear that her intent is not to prohibit bank crypto activities but instead to govern them, announcing that a series of policy statements will be issued in “coming months.”

U.S. Adds Voice to Health/Finance G20 Construct
The U.S. Treasury has now joined other G20 finance ministers in calling for a new forum coordinating health and finance policy. The proposal was sparked by an earlier report from former government officials such as Larry Summers based on the need to ensure that all national and global resources are prepositioned to prevent the next pandemic.

Global Regulators Tackle Margining, CCP Resilience
Advancing an FSB priority most recently emphasized in the Board’s forward-looking plan, the Basel Committee, IOSCO, and the Committee on Payment and Market Infrastructures today invited comment on additional margining standards addressing problems identified in the March 2020 COVID crisis.

House Advances Open-Source Regulatory Data
The House late yesterday passed 400-19 the Financial Transparency Act (H.R. 2989), legislation reintroduced by Reps. Maloney (D-NY) and McHenry (R-NC) requiring the federal financial regulatory agencies to adopt data collection-and-distribution standards on format, searchability, and transparency.

OCC Stands Firm on LIBOR Transition, Supervisory Priorities
In remarks generally focused on LIBOR transition, Acting Comptroller Hsu today emphasized that the U.S. agencies fully intend to end LIBOR and “zombie LIBOR” as of year-end and that even banks that think …