More for Mortgages?
As our reports on the Senate and House hearings with bank regulators made clear, our prediction that the agencies would compromise on mortgage risk-based capital requirements will prove itself in the final standards. However, it’s far from clear if the compromise the agencies think will satisfy Congress will do much beyond directly addressing concerns that the proposal adversely affects LMI loans.
GOP Blasts Basel End-Game Regs, Dems Seek a Few Changes
With HFSC Chairman McHenry (R-NC) leading the way, GOP Members of the panel’s Financial Institutions Subcommittee today blasted the banking agencies’ end-game proposal (see Client Report CAPITAL234). Republicans were unanimous in joining leadership’s attack on the proposal’s process and substance, pointing to what they called incomplete impact analyses, an inexplicably short comment period, and adverse macroeconomic and regional-bank implications. Democrats led by Ranking Member Waters (D-CA) were more restrained and in some cases supported the proposal, but concerns were also noted with specific provisions (e.g., re the treatment of certain mortgage and securitization assets) and the interface with the pending CRA final rule. We continue to expect the banking agencies to hold firm to the proposal in broad terms and make minimal, if any, changes to the comment deadline. However, pressure from Republicans and the industry could well force renewed and what many would consider improved impact analyses designed not only to allay political opposition, but also the courts if litigation challenges the final rule.
Congressional Leaders See What They Want in CBDC Paper
Following release yesterday of the Fed’s CBDC discussion draft, key policymakers in the House and Senate have now weighed in. Senate Banking Chair Brown (D-OH) said the draft is a good first step, highlighting the potential for CBDC to create a more inclusive banking system and further U.S. economic leadership.
FDIC Finalizes Trust, MSA Deposit-Insurance Simplification
The FDIC today finalized as proposed a rule simplifying deposit-insurance coverage for deposits held in connection with revocable and irrevocable trusts as well as certain MSA deposits.
More for MSAs
Late last week, the NCUA put a small addition into the Christmas stockings already stuffed by the regulator over the past few months with numerous regulatory liberalizations. In the latest ruling, it allowed eligible federal credit unions to purchase MSAs as long as these come from other federal credit unions.