#master accounts – Federal Financial Analytics

16 06, 2023

Daily061623

Eliza Allen2023-06-16T16:49:58-04:00June 16th, 2023|2- Daily Briefing|

Waller Separates Monetary, Stability Policy

FRB Gov. Waller today defended recent rate hikes against criticism that they undermine financial stability, noting that monetary and stability policy are inter-related but must generally be addressed with different tools.

Brown-Scott Clawback Bill Adds Enforcement Teeth

In his first legislative mark-up since assuming the chairmanship in 2021, Banking Committee Chairman Brown (D-OH) will convene voting next Wednesday on compromise compensation-reform legislation on which he and Ranking Member Scott (R-SC) have agreed.

Hsu Warns of Tokenized-Settlement, AI Risk

Acting Comptroller Hsu’s speech today highlights both the benefits and risks of tokenization and AI, urging parallel development of new technologies and essential controls.

Democrats Try Again To Mandate TILA, CFPB Small-Business Authority

Banking Committee member Sen. Menendez (D-NJ) yesterday introduced legislation (S. 2021) along with Small Business Committee Ranking Member Velazquez (D-NY) (H.R. 4192) to extend TILA protections to small business lending, also giving the CFPB authority in this sector.

Fed Fears Little Systemic Risk

The financial-stability discussion in today’s report from the Federal Reserve ahead of next week’s hearings generally reiterates conclusions from the most recent Fed financial-stability report (see Client Report SYSTEMIC96): banks are generally sound and resilient and, despite MMF worries, most other vulnerabilities are of only moderate systemic concern.

Fed’s Long-Awaited Master-Account Database Goes Live

Conceding to a long-resisted and now statutory demand (see FSM Report PAYMENT25), the Federal Reserve today published the first database detailing who has or seeks access to Reserve Bank master accounts and services.…

9 12, 2022

DAILY120922

Eliza Allen2022-12-09T16:39:45-05:00December 9th, 2022|2- Daily Briefing|

Toomey Gets His Fed Payment-Access Transparency

As we noted (see FSM Report PAYMENT25), Sen. Pat Toomey (R-PA) strongly objects to the Fed’s latest payment-system access policy. As a result, he sought and yesterday won inclusion of language in the NDAA that forces considerably more transparency than the Fed was otherwise willing to contemplate despite assurances that its final rule was indeed “transparent.”

FSB Suspends G-SII Designation

The FSB today announced it would discontinue its annual identification of global systemically important insurers (G-SIIs), instead opting only to publish a list of insurers subject to resolution planning and resolvability assessments in its Annual Resolution Report. As noted yesterday, the FSB’s 2022 Resolution Report lays out a series of significant concerns about G-SII resolvability, especially when it comes to intra-group exposures. It continues to work on ways to shutter large insurers without either adverse impact on policyholders or taxpayers.

Warren, Toomey Fed Transparency Bill Reaches all Financial Regulators

Heightening bipartisan calls for Fed transparency, Ranking Member Toomey (R-PA) and Sen. Warren (D-MA) today introduced legislation designed to ensure the Fed’s accountability to Congress. The measure unites Sen. Warren’s longstanding complaints about the Fed insider-trading scandals with the dissatisfaction Sen. Toomey expressed regarding master-account decisions most recently in the legislation on a new database detailed in a FedFin alert this morning.

Daily120922.pdf…

9 11, 2022

PAYMENT26

Eliza Allen2022-11-09T12:46:45-05:00November 9th, 2022|1- Financial Services Management|

Master-Account Transparency

Although the Fed characterized its final payment-system access guidelines as “transparent,” FedFin’s analysis and other assessments concluded that the Federal Reserve Banks retained considerable discretion to pick and choose those granted master accounts and there would be no ready way to identify which institutions had or lost this essential status for any provider of retail or wholesale deposit-taking services or their equivalent. The Board is now seeking to counter criticism with a revision to the guideline obliging Reserve Banks to create a quarterly list of institutions holding or ceasing to hold master-account privileges.

PAYMENT26.pdf…

7 11, 2022

DAILY110722

Eliza Allen2022-11-07T17:22:53-05:00November 7th, 2022|2- Daily Briefing|

Toomey Calls for More Fed Transparency

Sen. Toomey (R-PA) continued Republican demands for still more Fed transparency, sharply criticizing the Fed’s Friday proposal to provide some transparency into which institutions are granted master accounts.

Sweeping CFPB Fee Restrictions Now Effective

The Federal Register today includes the CFPB’s circular on Unanticipated Overdraft Fee Assessment Practices and a bulletin now effective on Unfair Returned Deposited Item Fee Assessment Practices.

CFPB Advances Bigtech Market Power Campaign

Continuing its campaign against bigtech’s market power, the Federal Register today includes the CFPB’s notice and request for comment on what fees bigtech payment operators levy on users for violations of acceptable use policies and whether their policies include provisions to restrict user platform access.

Fed Staff Paper Tries To Gauge Social Welfare Impact Of Liquidity, Capital Regs

A new Fed staff study attempts to lay out the social costs and benefits of large-bank liquidity and capital regulation.

Warren Continues Campaign Against Wells Fargo, Zelle

Sen. Warren (D-MA) today continued her campaign against Zelle by sending letters to its parent company and Wells Fargo, taking particular aim at what she deems the latter’s failure to provide adequate claims and reimbursement data and labelling responses to previous letters “insulting.”

Warren Denounces Fed “Culture of Corruption”

Sen. Warren (D-MA) today also continued her campaign against Chairman Powell, sending him a letter alleging “another set of egregious and embarrassing ethics breaches.”

Daily110722.pdf…

4 11, 2022

DAILY110422

Eliza Allen2022-11-04T17:11:14-04:00November 4th, 2022|2- Daily Briefing|

Big Banks Pressed on Sluggish, Inequitable Deposit-Rate Hikes

Advancing an initiative with political “legs,” Sen. Jack Reed (D-RI) has demanded answers from the nation’s largest banks on why small-deposit rates have barely budged even as the Fed sharply hiked interest rates now reflected in higher loan costs.

FRB-NY Official Details Wholesale CBDC Prototype

Remarks today from a senior FRB-NY official, Michelle Neal, continued the Fed’s ambivalent stand on a CBDC (see FSM Report CBDC10).

Fed Fixes Advanced-Approach Glitches

The FRB is proposing to implement three changes to Regulation Q data collection/disclosure rules governing advanced-approach capital adequacy at BHCs, SLHCs, and state member banks.

Fed to Name Master-Account Names

Reflecting ongoing concerns on Capitol Hill, the Fed is proposing to make what our analysis suggests were opaque payment-system access guidelines (see FSM Report PAYMENT24) “a bit more transparent.”

Toomey Presses for SLR Rewrite

Ranking Senate Banking Member Toomey (R-PA) today released his letter to Chairman Powell cautioning the central bank not to handle any Treasury-market liquidity events with new backstop facilities.

Waters Adds To Fed’s Political Woes

In a letter today, HFSC Chairwoman Waters (D-CA) joined Sens. Warren (D-MA), Brown (D-OH), and Hickenlooper (D-CO) in sharply criticizing the recent Fed “super-sized” rate hike.

Fed Worry Level Goes Up

The Federal Reserve likely hoped for the torpor of a Friday afternoon to quell frightened replies to the latest financial-stability report released today.

Daily110422.pdf…

18 08, 2022

PAYMENT25

Eliza Allen2023-01-04T11:30:15-05:00August 18th, 2022|1- Financial Services Management|

Payment System Access

Following considerable controversy surrounding how Federal Reserve Banks grant master accounts, it has finalized a somewhat more explicit set of guidelines along lines proposed the second time the Fed attempted to set guidelines via a “supplemental” proposal earlier this year amending its 2021 effort. Doubtless expecting the controversy which followed these final guidelines, the Fed was at pains in both the preamble and release to emphasize that the new standards are “transparent and equitable.” However, as noted below, some changes to the supplemental in fact increase Fed and/or Reserve-Bank discretion to grant or deny payment-system accounts on a case-by-case basis above and beyond the specifics again provided related to different charters and risks.

PAYMENT25.pdf…

18 08, 2022

FedFin on: Payment System Access

Arezou Rafikian2023-01-04T11:31:21-05:00August 18th, 2022|The Vault|

Following considerable controversy surrounding how Federal Reserve Banks grant master accounts, it has finalized a somewhat more explicit set of guidelines along lines proposed the second time the Fed attempted to set guidelines via a “supplemental” proposal earlier this year amending its 2021 effort.3 Doubtless expecting the controversy which followed these final guidelines, the Fed was at pains in both the preamble and release to emphasize that the new standards are “transparent and equitable.” However, as noted below, some changes to the supplemental in fact increase…

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

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….

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

21 06, 2022

DAILY062122

Eliza Allen2023-01-26T11:42:57-05:00June 21st, 2022|2- Daily Briefing|

Deadline Set for CFPB Inquiry into Customer Service
The Federal Register today includes the CFPB’s RFI on how big banks serve their customers (see FSM Report CONSUMER43), now seeking a comment deadline of July 21.

BIS Presses Hard for Fast-Acting CBDCs, Payment Systems, Crypto Standards
The BIS today issued an ambitious report outlining what it calls a “new monetary order.”

SEC Finally Nabs a CRA for Conflicts of Interest
The SEC today announced an unusual enforcement case against a credit rating agency, acting on demands recently expressed by HFSC Democrats.

FDIC Proposes DIF Rate Hike, Possible Assessment-Standard Realignment
Taking action after two years, the FDIC today proposed to increase bank DIF premiums by two basis points.

HFSC Highlights Fed Policy Twists Ahead of Powell Hearing
The Democratic staff memo ahead of HFSC’s Thursday hearing with Chairman Powell provides a detailed discussion of recent monetary-policy moves and the extent to which the Fed has been surprised by macroeconomic events.

Spurred by GAO, OCC to Ramp Up Redlining-Exam Procedures
The GAO today recommended that the OCC update its redlining examination procedures and improve its data collection related to small banks in this area.

Daily062122.pdf…

9 03, 2022

FedFin Analysis: Payment-System Access

Arezou Rafikian2023-04-04T10:54:03-04:00March 9th, 2022|The Vault|

Following considerable controversy surrounding how Federal Reserve Banks grant master accounts, the FRB has proposed a somewhat more explicit set of guidelines than provided in its initial notice seeking views on expanding payment-system access. The first proposal laid out the Fed’s policy goals for granting access but said only that insured depositories would get the most straightforward review and other institutions would be subject to more detailed scrutiny. The Fed has now reissued that proposal and differentiated applicants into three classes, getting the lightest to the strictest review…..

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