#mergers – Federal Financial Analytics

10 07, 2023

CAPITAL228

Max Camateros-Mann2023-07-10T12:49:19-04:00July 10th, 2023|5- Client Report|

Going Up?

FRB Vice Chairman Barr’s speech today outlines near-term U.S. regulatory-capital policy, confirming our earlier assessment that a sweeping proposal will soon be released. There are few surprises in the speech, which outlines a “holistic” construct comprised of U.S. action on the “endgame” rules and revisions presaged in the Fed’s response to SVB’s failure (see Client Report REFORM221). As detailed in this new FedFin report, the agencies also plan to retain the GSIB surcharge largely as is despite technical flaws in order to reduce GSIB size and give super-regionals a fighting chance.

CAPITAL228.pdf…

29 03, 2023

DAILY032923

Eliza Allen2023-03-29T17:30:21-04:00March 29th, 2023|2- Daily Briefing|

Barr Keeps CRA Hope Alive

Ahead of what is certainly going to be a trying HFSC hearing later today, FRB Vice Chairman Barr told an audience that pending CRA rules (see FSM Report CRA32) are still in the works, declining to provide any completion timeline.

Chopra Expands Post-SVB Policy Action Items

In remarks posted after a panel discussion yesterday, CFPB director and FDIC board member Rohit Chopra reaffirmed Chairman Gruenberg’s comments that changes are likely to capital and liquidity rules, but added action related to interest-rate risk management, resolution planning and stress-testing to the to-do list.

Senate Finance Dems Demand Tougher Penalties, Enforcement to Prevent Swiss Tax-Evasion Activities

Senate Finance Democrats today released a damning investigative report accusing Credit Suisse of persistently and often criminally enabling U.S. tax evasion despite a 2014 plea agreement with the U.S. Chairman Wyden (D-OR) presses for additional civil and criminal actions, noting that the UBS acquisition does not “wipe the slate clean.”

Bipartisan Senate Clawback Bill Reaches to BHC Investors, Creditors

Preempting Chairman Brown’s plans to introduce clawback legislation (see Client Report REFORM217), Sens. Warren (D-MA), Cortez Masto (D-NV), Hawley (R-MO), and Braun (R-IN) today introduced their own bill to do so.

CFPB Sets Comment Deadline For Controversial Credit Card Proposal

The Federal Register today includes the CFPB’s proposed rule on Credit Card Penalty Fees.

Daily032923.pdf…

15 03, 2023

FedFin Assessment: Post-SVB Deposit Insurance Reform

Arezou Rafikian2023-03-15T16:58:47-04:00March 15th, 2023|The Vault|

Cementing prior denouncements of 2018 Dodd-Frank “rollbacks” into legislative action, 17 Democratic senators and 31 House Members today took direct aim at Trump-era banking policy by introducing legislation that would repeal Title IV of the Economic Growth, Regulatory Relief, and Consumer Protection Act. But, while this initiative is gaining considerable attention, its legislative prospects are dim – indeed, even Senate Banking Committee Chairman Brown (D-OH) suggested as much…

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

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15 03, 2023

DEPOSITINSURANCE118

Eliza Allen2023-03-15T12:48:33-04:00March 15th, 2023|5- Client Report|

FedFin Assessment: Post-SVB Deposit Insurance Reform

As promised in our first post-SVB impact assessment (see Client Report RESOLVE49), this report begins a series of analyses of specific policy issues. We start here with possible changes to FDIC insurance based on comments from Reps. Maxine Waters (D-CA), Blaine Luetkemeyer (R-MO), and other arguing either that the $250,000 limit for FDIC coverage needs to be eliminated or sharply increased. We also analyze the prospects for shifting the burden of higher DIF premiums to large banks as recommended by the ICBA, ending the FHLB’s super-lien due to the resulting, significant increase in FDIC resolution costs in recent failures, changes to the treatment of brokered deposits, and revisions to the FDIC’s overall risk-based assessment system (see FSM Report DEPOSITINSURANCE96). Other resolution issues – e.g., the future of proposed regional-bank standards (see FSM Report RESOLVE48) and bank merger policy will be covered in future reports along with the prospects for significant changes in bank capital, liquidity, and other prudential standards.

DEPOSITINSURANCE118.pdf…

10 03, 2023

DAILY031023

Eliza Allen2023-03-10T16:57:08-05:00March 10th, 2023|2- Daily Briefing|

Anti-Woke Is Worse Than Woke When It Comes To Financial Distortion

A new study released by the Federal Reserve Bank of Chicago concludes that anti-woke policies distort financial outcomes by looking at 2021 Texas law prohibiting municipalities from conducting certain businesses with financial institutions that violated the law’s anti-woke criteria.

CFPB Opens Mortgage Servicing to Regulatory Rewrite

The CFPB today published an RFI seeking the effect of TILA mortgage loan originator rules on small businesses as part of a regular ten-year review.

FedFin Assessment: SVB’s Failure And Its Aftermath

As clients will recall, we predicted Silvergate’s failure, but not its contagion risk for Silicon Valley Bank, which failed earlier this morning following the combination of a run and capital shortfall.

SVB Rumors Stoke Treasury Response

Following the sudden failure of Silicon Valley Bank, Treasury Secretary Yellen today convened the heads of the Fed, FDIC, and OCC to discuss its ramifications.

Congress Begins SVB Inquiry

In the first of a series of statements sure to come from Congress, HFSC Ranking Member Waters (D-CA) today said that she was alarmed by the collapse of SVB and that she is monitoring and convening Committee members with regulators.

Daily031023.pdf…

3 03, 2023

Al030623

Eliza Allen2023-03-03T17:17:37-05:00March 3rd, 2023|3- This Week|

Gloves Off

When Chairman Powell comes before HFSC and Senate Banking this week, we’ll see if FedFin’s forecast for newly-rough going plays out, but all signs say it will. In the lead-up to the midterm, Democrats other than Sen. Warren (D-MA) who weren’t all that sympathetic to many Fed actions held their tongues in order to protect a central bank that, for all its putative independence, seemed aligned with Biden Administration statements promoting American prosperity and the near-term chances of reduced inflation. With the 2024 election looking even uglier than the midterm and Republicans in control of the House, Mr. Powell may find himself squeezed hard from both sides of the aisle, taking lots of heat on issues ranging from monetary policy and the debt ceiling to a panoply of Fed regulatory and payment-system decisions along with the pending nomination of a new vice chair.

Al030623.pdf…

2 03, 2023

DAILY030223

Eliza Allen2023-03-03T17:11:19-05:00March 2nd, 2023|2- Daily Briefing|

Senate GOP Reiterates Anti-Woke Demands

At the same time as the Senate passed a resolution overturning the Labor Department’s rule authorizing pension ESG investments, Sens. Rubio (R-FL), Cruz (R-TX), Cramer (R-ND), Cotton (R-AR), Blackburn (TN), and Scott (R-FL) reintroduced legislation (S. 583) to permit the FDIC to terminate the insured status of depository institutions refusing to provide services to Federal contractors.

HFSC GOP Reams CFPB Late-Fee Proposal

Seventeen HFSC Republicans sent a letter late yesterday to CFPB Director Chopra strongly protesting the Bureau’s recent NPR targeting credit card late fees (see FSM Report CREDITCARD36).

Gensler Boosts SEC Custody Rewrite

SEC Chairman Gensler today reiterated and emphasized his strong support for the agency’s proposal to rewrite the rules governing custody services (see FSM Report CUSTODY5), arguing that they would strengthen safeguards and provide a much-needed expansion to the protections qualified custodians provide.

Bipartisan Senators Target Another Crypto Culprit

Following Sen. Warren’s (D-MA) pledge to introduce bipartisan legislation extending AML protections to crypto firms (see Client Report CRYPTO39), Sens. Warren, Van Hollen (D-MD), and Marshall (R-KS) sent letters yesterday to the leadership of the crypto platform Binance, alleging that the company built an intentionally opaque corporate structure to circumvent securities and AML laws and facilitate money laundering and sanctions evasion.

Brown Demands Branch-Closure Hearings, Merger Policy

In the midst of what may well be negotiations over the nomination of Michael Hsu as Comptroller and continuing controversies over big-bank mergers, Senate Banking Chairman Brown (D-OH) today wrote …

15 02, 2023

DAILY021523

Eliza Allen2023-02-15T17:02:30-05:00February 15th, 2023|2- Daily Briefing|

GOP Launches Anti-SEC Climate-Risk Legislative Attack

As anticipated, House Republicans have gone beyond blasting the SEC’s pending climate-risk disclosure proposal to laying out a consensus bill to force Chairman Gensler in fact to retract it. H.R. 1018 has been introduced by HFSC member Lucas (R-OK) and 55 Republicans to prohibit climate-risk disclosures under securities law.

FDIC Adds Punch to FDIC-Misrepresentation Enforcement Promise

Building on its insurance misrepresentation final rule (see FSM Report DEPOSITINSURANCE113), the FDIC today issued four cease and desist orders demanding the removal of false claims and thus made it clear that it is surveying the marketplace to take far more rapid action than has been the case thus far.

Calling Out Hsu, Warren Demands Merger Reform

In a wide-ranging speech urging tough U.S. antitrust policy, Sen. Warren (D-MA) today reiterated her claims that banking agencies “rubber-stamp” mergers and pressed for immediate reform. She took particular aim at Acting Comptroller Hsu, urging him to prepare new guidelines for the banking industry and to block anticompetitive mergers.

Will SEC Custody Rules Kill Crypto?

Conceding that rulemaking is needed on at least one crypto question, the SEC today voted 4-1 to approve proposed changes to investment-advisor asset custody regulation. The measure would expand assets subject to custody requirements and the protections custody affords as well as revise related record-keeping requirements.

Daily021523.pdf…

13 02, 2023

Daily021323

Arezou Rafikian2023-02-14T15:50:52-05:00February 13th, 2023|2- Daily Briefing|

Bowman: Large-Bank Supervisory Guidance to Come, Capital Reform to Exempt Smaller Banks

FRB Gov. Bowman today acknowledged that, while Fed supervision and regulation must be independent of political objectives, they must also be accountable and therefore transparent, predictable, and tailored.

Daily021323.pdf…

10 02, 2023

DAILY021023

Eliza Allen2023-02-10T17:02:31-05:00February 10th, 2023|2- Daily Briefing|

Waller Reiterates Fed’s Wary Cryptoasset Policy

In remarks today, FRB Governor Waller reiterated the Fed’s wary approach to cryptoassets, repeating the Fed’s requirements (see FSM Report CRYPTO31) for banks that wish to engage with crypto customers or activities. Following the collapse of FTX and its ripple effect on banks such as Silvergate (see Client Report CRYPTO38), Mr. Waller stressed that banks engaging with crypto customers must have a thorough understanding of their client’s business models, risk management systems and corporate governance.

Hsu Reprises, Expands Bank Merger Reform

In remarks today, the OCC Chief Counsel on behalf of Acting Comptroller Hsu stressed the need to update competition metrics, financial stability considerations, and community assessments in bank merger reviews, but gave no indication of when new merger policy may be finalized. Mr. Hsu argued that while HHI is an objective and transparent metric, it is no longer suitable for measuring competition because its deposit share-based approach fails to capture the competitive effect of nonbanks and online banking.

FHFA Outlines Substantive FHLB Reform Agenda

As anticipated earlier this week, FHFA Director Thompson today called the status quo of the FHLB system unacceptable and said that FHFA will make “meaningful” recommendations to improve the sector. This will take shape in a report following completion of FHFA’s roundtable series concluding in March. FHFA’s report will make statutory recommendations to Congress and lay out its own regulatory objectives, perhaps starting with an ANPR and/or regulatory guidance or supervisory actions.

Daily021023.pdf…