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16 12, 2022

Al121922

2022-12-16T17:21:25-05:00December 16th, 2022|3- This Week|

Crypto Gets Lumps of Coal From Congress

As we detailed last week, the House Financial Services Committee and Senate Banking tackled not just FTX’s meteoric plunge, but also policies to respond to it and broad problems across the cryptosphere (see Client Report CRYPTO36).  Although nothing substantive will happen regarding new digital-finance law in what’s left of this Congress, these hearings lay a strong platform on which new debate on digital-finance reform will proceed early in 2023.  Whether there will be new law remains an open question – as we noted, Senate Banking Chairman Brown (D-OH) one day said he wants to craft some and then the next returned to calling on Secretary Yellen to write a raft of new regulations.  Still, we think that there will be new law – and not just to ensure AML compliance along the lines included in the Warren-Marshall bill – because we expect HFSC under incoming Chairman McHenry (R-NC) to advance one that, at least for now, might well pass the bitterly-divided House.  To be sure, Democrats will balk at anything that hamstrings the SEC, but there is growing agreement on how best to redefine digital finance so it is the innovation Republicans espouse without posing the risks Democrats decry.

Al121922.pdf

11 08, 2022

INTERCHANGE10

2023-01-04T12:45:54-05:00August 11th, 2022|1- Financial Services Management|

Credit-Card Networks

Two senators have reopened questions about the manner in which card-related payments are handled, tackling those applicable to credit cards with a bill mandating that merchants must be given a network choice that is not either Visa or Mastercard in order to, the sponsors argue, increase competition and lower credit-card transaction costs.  Although the multi-network requirement would apply only to banks with assets over $100 billion, it would likely have the effect of lowering swipe fees across the sector because exempt banks would be compelled by market forces to find lower-cost networks.  The extent to which these lower-cost networks are also sound and resilient under stress is uncertain as no safety-and-soundness or operational requirements directly apply to card-processing networks.

INTERCHANGE10.pdf

29 07, 2022

DAILY072922

2023-01-04T13:45:23-05:00July 29th, 2022|2- Daily Briefing|

Credit-Card Routing Expansion Introduced, Faces Long Odds

As anticipated, Sens. Marshall (R-KS) and Durbin (D-IL) have introduced S. 4674, legislation to extend routing-system requirements to credit cards.

FDIC, Fed Crack Down on IDIs Working with Crypto Companies

In addition to joining the Fed in sending a stern warning to Voyager about misrepresenting FDIC insurance, the FDIC today issued an advisory instructing IDIs as to how best to partner with crypto companies to prevent future misunderstanding and ensure compliance with the agency’s new rule (see FSM Report DEPOSITINSURANCE113).

BIS Lays Out Risks to Central Bank Green Assets

The BIS Consultative Group on Risk Management today released a report detailing the data and methodological challenges faced by central banks implementing climate risk into their reserve-management frameworks.

FTC Takes on Payment Processing

The FTC today unanimously reached a settlement with the nation’s largest payment processor, First American, related to what some call “trick-and-trap” practices.

BIS Advances Cross-Border PVP Payment Options

Hoping to speed the introduction of payment versus payment (PvP) systems to reduce frictions in cross-border payments, the BIS today released a call for information that details previous PvP proposals and asks for comment on them.

HFSC Republicans Expand CFPB Attack to State-AG Partnerships

Continuing their campaign against CFPB Director Chopra, HFSC Republicans have sent him a letter accusing the Bureau of intimidating companies by pursuing duplicative enforcement actions with state regulators.

Daily072922.pdf

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