29 06, 2023


2023-06-29T17:22:46-04:00June 29th, 2023|2- Daily Briefing|

Powell Stands by Big-Bank Reg Rewrite

In remarks today, Chair Powell echoed Vice Chair Barr’s “humble” comments yesterday about the need to anticipate additional risks despite banking-system resilience, noting that rules and supervision require review.  Building on the Fed’s internal SVB review (see Client Report REFORM218), Mr. Powell suggested that the Fed had succumbed to the “natural tendency” to fight the last war and needs now to update its standards to address new risks.

FTC Finalizes Tough New Guidance On Deceptive Reviews And Endorsements

The FTC today finalized an updated version of its Endorsement Guides, setting new standards for the advertising and endorsement behavior that may constitute unfair or deceptive practices.  These include implementation of a Consumer Review Fairness Act ban on standardized contract provisions penalizing consumers for negative reviews, a practice the CFPB last year called “gag” clauses that are banned  under this law.

Banking Agencies Encourage Banks To Go Easy On CRE Borrowers

The banking agencies and NCUA today finalized changes to troubled-loan standards in a policy statement that is substantially similar to last year’s proposal.


26 04, 2023


2023-04-27T10:27:37-04:00April 26th, 2023|2- Daily Briefing|

Senate Banking Housing Plans Focus on Affordability, Access

At today’s Senate Banking hearing on affordable housing, Chairman Brown (D-OH) framed the committee’s legislative agenda in his opening statement but did not indicate any timing or future action.

CFPB Targets Piggyback-Mortgage Collection

The CFPB today issued guidance on debt collection practices it asserts violate the Fair Debt Collection Practices Act by attempting to collect time-barred debt where the statute of limitations has expired.

Comment Deadline Set For Sweeping FHFA Equitable Housing NPR

The Federal Register today includes FHFA’s NPR codifying Sandra Thompson’s equitable- and fair housing agenda in a body of rule that future directors would find more difficult to reverse and FHFA could enforce with more punitive standards.

HFSC GOP Demands FHFA Reverse LLPA Changes

HFSC Chairman McHenry (R-NC) and Rep. Davidson (R-OH) sent a letter to FHFA Director Thompson today demanding that the agency reverse changes to the GSEs loan level pricing adjustments (LLPAs).

LIBOR Transition Still Too Slow, Agencies Say

The Fed, FDIC, NCUA, OCC, and CFPB along with state bank and state credit union regulators today issued a joint statement reminding supervised institutions that USD LIBOR panels will end on June 30.

FDIC, OCC Deploy UDAP Powers for Targeted Deposit Fees

So far without the Fed, the FDIC and OCC today released supervisory guidance asserting that authorize-positive, settle-negative (ASPN) charges are an unfair practice under UDAAP criteria and present consumer compliance risk.

HFSC GOP Leaders Press Banking Agencies on Digital “Chokepoint” Policy

HFSC Chairman McHenry (R-NC) was …

14 04, 2023


2023-04-14T16:38:08-04:00April 14th, 2023|3- This Week|

So Much to Do…

Last week, we continued our assessment of the policy questions confronting federal regulators and Congress as they simultaneously investigate recent failures and position themselves to get as much out of them as possible to achieve long-cherished reform goals.  Although there will be no decisive action until the Fed and FDIC submit their reports and answers to lots of letters that trickle in, important directional signs are coming into view.


9 12, 2022


2022-12-09T16:39:45-05:00December 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.


2 08, 2022


2023-01-04T13:33:07-05:00August 2nd, 2022|2- Daily Briefing|

FFIEC Turns Back to Troubled Loans

The banking agencies and NCUA today sought comment on proposed changes to troubled-loan standards that would codify action during the great financial crisis on CRE-related allowances for loan and lease losses (see FSM Report ALLL5) and Covid-crisis era regulatory and CECL actions (see FSM Report CECL7).  Although focused on CRE, the statement’s general principles would also apply to commercial loans secured by real property or business assets, reiterating current injunctions for banks to work “constructively” with troubled borrowers.

Senate Banking at Another Loggerhead, This One re Housing

Today’s Senate Banking hearing on rising rent was a partisan session, with Democrats urging support for legislation to provide emergency rental assistance and other federal interventions.  In sharp contrast, Republicans argued that needless government regulation is to blame.  Ranking member Toomey (R-PA) also continued Republican attacks on the GSEs, denouncing what he called their loose underwriting standards and calling for Congress to prohibit them from investing in areas with rent-control laws.

Hsu Fears Continuing Cyber Risk

In remarks today, Acting Comptroller Hsu indicated that, while banks have generally done a good job combatting cyber threats, this has led to an undue sense of security across the industry, law enforcement, and national-security officials.  Mr. Hsu thus urges continued vigilance and investment that recognizes the increasingly inter-connected and complex nature of financial instruments, payment systems, and markets, as well as continued attention to contingency planning and recovery protocols.


6 07, 2022


2023-01-24T15:37:46-05:00July 6th, 2022|2- Daily Briefing|

FRBNY Finds Changes to PPP Increased Credit Availability for Small Businesses

A New York Fed blog post today concludes that changes the Biden Administration made to the Paycheck Protection Program (PPP) increased credit access for non-employer firms and application take-up for minority owned firms.  However, the paper also found a continuing gap in approval rates between white and minority owned firms perhaps due to application rates.

FRB Paper: Integrated Methodologies, Better Data Needed to Calculate Climate Systemic Risk

A new research paper from Fed staff provides extensive detail on an array of data and methodology challenges that now make it difficult, if not impossible, to calculate the systemic risk posed by climate change in the U.S financial market.  The paper provides a literature review of research on climate-related financial stability risks, seeking to identify methodologies that comprehensively link climate risk with financial stability.  It finds that no single methodology can address the research challenges.

Banking Agencies, FinCEN Refute Suggestions AML Rules Define Bank Offerings

The banking agencies and FinCEN today released a joint statement reminding banks to use a risk-based approach to assessing customer relationships and conducting customer due diligence (CDD), expressly mentioning that this statement does not alter current BSA/AML requirements.


22 02, 2022


2023-04-04T15:32:15-04:00February 22nd, 2022|2- Daily Briefing|

CFPB Reiterates Need for Small-Business ECOA Reporting

The CFPB has reiterated its plans to quickly enact new rules requiring small-business lender reporting (see FSM Report FAIRLEND7), asserting that demographic and pricing data are necessary to ensure fair credit to otherwise under-served small businesses.  T

G20 Ministerial Frets re Central Banks, CBDC, Climate, NBFIs

Perhaps the most interesting aspect of the G20 finance ministerial communiqué is the new assertion that crafting effective exit strategies is not only critical to sustained and stable macroeconomic growth, but also to central-bank “credibility.”  We have been tracking growing concerns about central-bank credibility, and its relation to central-bank independence in connection with work related to Karen Petrou’s book.

FSB Looks for New Distressed-Debt Options Ahead of Lots More Debt

The FSB has issued a new discussion paper seeking ways to exit widespread forbearance and central-bank programs during the pandemic that have increased the likelihood that highly-indebted corporate borrowers will experience severe distress as interest rates rise.  Although these concerns are particularly acute in the EU, where “zombie” borrowers have been a major market presence since 2008, they are also a growing concern in the U.S. and elsewhere due to the sharp run-up in highly leveraged corporate finance along with the sharp growth in private-capital structures.

Agencies Give All-Clear for Special Credit

The banking agencies, CFPB, FHFA, NCUA, and the Departments of Justice and HUD today issued a statement on special-purpose credit programs.


19 01, 2022


2023-04-24T13:33:40-04:00January 19th, 2022|2- Daily Briefing|

GOP Signals Congressional CBDC Strategy
Although the bill will not pass in this Congress, we draw client attention to H.R. 6415, legislation just now noted in the Congressional Record to bar the FRB from offering the “FedAccounts” Democrats espouse (see FSM Report CBDC).

OCC Grants Non-Traditional Charter Conditions on BHC Status
After close of business yesterday, the OCC gave conditional approval to SoFi’s acquisition of an insured depository and thus to its charter now as a full-service national bank.  The approval signals not only that the OCC will approve acquisitions and continue to charter national banks even in non-traditional cases, but also that the moratorium on crypto charters remains in full force.

Senate Banking Split on Several Key Nominations
The Senate Banking Committee today voted on several key Biden Administration nominees without taking up any of the pending Fed appointments.  The narrowness of several votes makes it clear that, as we anticipated (see Client Report FEDERALRESERVE66), controversial appointments such as Sarah Bloom Raskin and Lael Brainard have uncertain futures.

Large Banks Lead on D&I, CFPB Study Finds
The CFPB today released a report analyzing publicly-available FY2020 diversity and inclusion data for depository and nondepository institutions, putting forward a series of best practice recommendations.


27 12, 2021


2023-05-22T13:33:49-04:00December 27th, 2021|4- GSE Activity Report|

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.


22 12, 2021


2023-05-22T13:38:02-04:00December 22nd, 2021|2- Daily Briefing|

Waters Demands McWilliams Justify RFI Blockade
As promised last week, HFSC Chairwoman Waters (D-CA) today formally requested that FDIC Chair McWilliams advise the committee of the legal authority on which she relied to prevent issuance of the merger RFI (see FSM Report MERGER9).

FHFA Strengthens Affordable-Housing Goals
FHFA today finalized the GSEs’ affordable-housing goals, keeping single-family goals as proposed for 2022-2024. Fannie and Freddie both supported the single-family benchmarks, with Fannie in fact supporting even higher ones.


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