#McWilliams – Federal Financial Analytics

30 03, 2022

DAILY033022

Eliza Allen2023-03-27T14:58:35-04:00March 30th, 2022|2- Daily Briefing|

Overdraft Hearing Sure to Raise Fee, Inclusion Concerns

Although the HFSC memo on tomorrow’s overdraft hearing tees up legislation for possible action, we expect the Consumer Protection Subcommittee hearing to be a rhetorical exercise pressuring banks which still charge what Democrats, as well as Acting Comptroller Hsu and CFPB director Chopra, view as punitive fees.

FDIC Joins Campaign for Climate-Risk Management Standards

The FDIC today issued a request for comment on climate-risk management similar in many respects to the OCC’s outstanding release (see FSM Report GREEN12).

Senators Urge Treasury, SEC to Close Private Investment Sanctions Gap

Sens. Warren (D-MA) and Whitehouse (D-RI) today asked in a letter to Treasury and the SEC to accelerate closing the AML/CFT gap posed by private investment firms.

CFPB Revs Up Democratic Overdraft Anger

Ahead of tomorrow’s overdraft hearing, the CFPB today put out a strong blog post saying that, while some banks have properly addressed consumer risk, many have yet to do so.

Senate Dems Demand More Small-Business Lending

Senate Banking Committee Chairman Brown (D-OH), Majority Whip Durbin (D-IL), and eight other Democrats today wrote to all the banking agencies demanding that they do something to ensure that banks lend more to small businesses.

Daily033022.pdf…

25 03, 2022

Daily032522

Arezou Rafikian2023-03-27T16:04:54-04:00March 25th, 2022|2- Daily Briefing|

Fed Puts Off Finalizing New DIHC Framework
The FRB today extended the comment deadline on a longstanding proposal crafting a new regulatory framework for depository institution holding companies principally engaged in insurance services.

CFPB Wants to Hear More re Pricing Practices
Saying it has been swamped with consumer tales about “junk fees,” the CFPB today extended the comment deadline until April 11 on its request for views on this hot topic.

Bipartisan Crypto Construct Harder to Build than Describe
On a Politico webcast last night, Sens. Kirsten Gillibrand (D-NY) and Cynthia Lummis (R-WY) announced a bipartisan alliance to craft cryptoasset standards they expect to see on the Senate floor by year-end.

Waller Still Wants Little to Do with a CBDC
At a feisty panel today, FRB Gov. Chris Waller stood by his view that a CBDC is “a solution in search of a problem.”

Senate Democrats Demand Overdraft-Fee Fix
Sen. Rev. Warnock (D-GA) and Chairman Brown (D-OH) joined other Democrats demanding lower or eliminated overdraft fees.

FDIC Starts Process of Revising Bank-Merger Policy

The FDIC today has officially released the bank-merger RFI that now-Acting Chairman Gruenberg and CFPB Director Chopra sought to release under Chair Jelena McWilliams.

Daily032522.pdf…

14 02, 2022

Karen Petrou: Two Regulatory Decisions That Will Define the Future of Money

Arezou Rafikian2023-04-04T16:07:43-04:00February 14th, 2022|The Vault|

Like all of you, we at FedFin spend a lot of time watching the U.S. Congress, but I’m increasingly wondering why. Sure, there’s the blood and guts. Watching Congressional deliberations is more and more like being a spectator at a hockey game for the fights or NASCAR races for the next fiery crash. Does any of this carnage really matter? Not much when it comes to vital, urgent financial policy questions such as what money has come to be in the United States. With Congress mired in a never-ending cock fight, regulators hold the fate of finance mostly in their own fierce grip. Even without deployment of the Fed’s nuclear CBDC option, two developments last week show clearly how much power regulators have to redefine U.S. digital currency.

First, there was outgoing FDIC Chair McWilliams’ offhand suggestion in her final remarks that stablecoins have all the characteristics of fiat currency deposits and thus could be eligible for FDIC insurance under current law. As soon as he took the helm, Acting FDIC Chairman Gruenberg demanded tough cryptocurrency regulation, but he didn’t rule out deposit status for at least some stablecoins if the agency was satisfied with their stability.

The impact of an FDIC decision deeming at least some stablecoins to be deposits is hard to over-estimate. As I detail in my book, what’s actually in a bank deposit isn’t what most people think they hold, i.e., a virtual pile of dollars. In fact, money in the bank is …

14 02, 2022

m021422

Arezou Rafikian2023-04-04T16:07:21-04:00February 14th, 2022|6- Client Memo|

Two Regulatory Decisions That Will Define the Future of Money

Like all of you, we at FedFin spend a lot of time watching the U.S. Congress, but I’m increasingly wondering why. Sure, there’s the blood and guts. Watching Congressional deliberations is more and more like being a spectator at a hockey game for the fights or NASCAR races for the next fiery crash. Does any of this carnage really matter? Not much when it comes to vital, urgent financial policy questions such as what money has come to be in the United States. With Congress mired in a never-ending cock fight, regulators hold the fate of finance mostly in their own fierce grip. Even without deployment of the Fed’s nuclear CBDC option, two developments last week show clearly how much power regulators have to redefine U.S. digital currency.

m021422.pdf…

14 02, 2022

Karen Petrou: Two Regulatory Decisions That Will Define the Future of Money

Arezou Rafikian2023-04-04T16:07:34-04:00February 14th, 2022|The Vault|

Like all of you, we at FedFin spend a lot of time watching the U.S. Congress, but I’m increasingly wondering why. Sure, there’s the blood and guts. Watching Congressional deliberations is more and more like being a spectator at a hockey game for the fights or NASCAR races for the next fiery crash. Does any of this carnage really matter? Not much when it comes to vital, urgent financial policy questions such as what money has come to be in the United States. With Congress mired in a never-ending cock fight, regulators hold the fate of finance mostly in their own fierce grip. Even without deployment of the Fed’s nuclear CBDC option, two developments last week show clearly how much power regulators have to redefine U.S. digital currency.

First, there was outgoing FDIC Chair McWilliams’ offhand suggestion in her final remarks that stablecoins have all the characteristics of fiat currency deposits and thus could be eligible for FDIC insurance under current law. As soon as he took the helm, Acting FDIC Chairman Gruenberg demanded tough cryptocurrency regulation, but he didn’t rule out deposit status for at least some stablecoins if the agency was satisfied with their stability.

The impact of an FDIC decision deeming at least some stablecoins to be deposits is hard to over-estimate. As I detail in my book, what’s actually in a bank deposit isn’t what most people think they hold, i.e., a virtual pile of dollars. In fact, money in the bank is …

7 02, 2022

DAILY020722

Eliza Allen2023-04-05T13:35:42-04:00February 7th, 2022|2- Daily Briefing|

FDIC Takes New, Unsurprising Direction
Upon taking office over the weekend, Acting FDIC Chairman Gruenberg released a new set of agency priorities.

Fed Lawyers Press for Regulated Crypto Prior to Payment-System Access
In sharp contrast to the economic and often then even theoretical focus of many Fed research papers, Fed lawyers last week released a note assessing the legal underpinnings of U.S. money and the issues they present for rapid evolution in tandem with increasing digitalization.

Toomey Heightens Raskin Opposition
Following up last week’s contentious hearing (see Client Report FEDERALRESERVE69), Senate Banking Ranking Member Toomey (R-PA) today sent Vice Chair-nominee Raskin a formal request for information on her relationship to a fintech company that unusually obtained a Fed master account.

Fed Reiterates Anti-DLT Construct for CBDC
As we noted last week, the FRB’s CBDC technology team known as Project Hamilton has determined an array of significant CBDC benefits but also found that DLT is not its preferred system infrastructure.

HFSC to Debate Stablecoins, Not Start Action on Them
Today’s HFSC staff memo makes it clear that tomorrow’s hearing will be a platform for both Congressional — or at least Democratic — support for the PWG’s stablecoin report (see Client Report CRYPTO21).

Daily020722.pdf…

7 02, 2022

Al020722

Arezou Rafikian2023-04-05T13:39:49-04:00February 7th, 2022|3- This Week|

SETTING THE STAGE FOR STABLECOINS

The House Financial Services Committee this week will kick off action soon to be echoed by Senate Banking advancing the stablecoin policies set by the President’s Working Group on Financial Markets (see Client Report CRYPTO21). HFSC’s intentions will be announced when majority staff releases its staff memo ahead of the hearing and, as always, we’ll highlight key takeaways. One of them will be the extent to which high-profile legislation floated last week by Rep. Josh Gottheimer (D-NJ) will be baseline text for legislative action. As is often the case, Senate Banking Chairman Brown (D-OH) made it more than clear that he won’t miss Meta’s stablecoin without also saying more about what he’ll do to secure the regulatory outcome he espouses.

Al020722.pdf…

4 02, 2022

Al020722

Arezou Rafikian2023-04-05T13:51:35-04:00February 4th, 2022|3- This Week|

SETTING THE STAGE FOR STABLECOINS

The House Financial Services Committee this week will kick off action soon to be echoed by Senate Banking advancing the stablecoin policies set by the President’s Working Group on Financial Markets (see Client Report CRYPTO21). HFSC’s intentions will be announced when majority staff releases its staff memo ahead of the hearing and, as always, we’ll highlight key takeaways. One of them will be the extent to which high-profile legislation floated last week by Rep. Josh Gottheimer (D-NJ) will be baseline text for legislative action. As is often the case, Senate Banking Chairman Brown (D-OH) made it more than clear that he won’t miss Meta’s stablecoin without also saying more about what he’ll do to secure the regulatory outcome he espouses.

Al020722.pdf…

3 02, 2022

Daily020322

Arezou Rafikian2023-04-05T14:01:47-04:00February 3rd, 2022|2- Daily Briefing|

Fed Study Presages House Two-Tier Stablecoin Standards
A new Federal Reserve staff note recommends a different approach to stablecoin innovation than that proposed by the President’s Working Group on Financial Markets (see Client Report CRYPTO21).

Fed’s Project Hamilton: CBDC Advances Payment Functionality, Outdoes DLT
The Boston Fed and MIT today published findings from Phase 1 of their CBDC research initiative “Project Hamilton,” which has now successfully created a core processing engine for a hypothetical CBDC. Results also demonstrate an array of other CBDC capabilities, a finding sure to factor into the Fed’s thinking about the pace of CBDC implementation once it makes more progress on the basic “what-if” questions in its discussion draft (see FSM Report CBDC10).

McWilliams Outlines How FDIC Insurance Could Cover Stablecoins
Although Jay Powell delivered his all-important annual address atop a virtual Wyoming mountain, the Federal Reserve is nonetheless mired in the Big Muddy.

Daily020322.pdf…

10 01, 2022

Al011022

Arezou Rafikian2023-04-25T14:02:41-04:00January 10th, 2022|3- This Week|

2022 BUILDING BLOCKS

We hope the holidays gave you a relaxing break no matter your travel and omicron worries. FedFin staff stayed busy because so did federal policy-makers. Actions in the last two weeks or so lay a solid platform for game-changing decisions in 2022 on…

Al011022.pdf…