#NDAA – Federal Financial Analytics

15 12, 2023

DAILY121523

Eliza Allen2023-12-15T17:31:25-05:00December 15th, 2023|2- Daily Briefing|

Crypto Measures Await Next Session

As anticipated, HFSC Chair McHenry (R-NC) was able to fend off concerted efforts by Sens. Brown (D-OH) and Warren (D-MA) to add the Warren-Marshall crypto bill to the National Defense Authorization Act.

FSOC to Target Hedge Funds, Nonbank Mortgage Companies

The readout from Treasury on yesterday’s FSOC meeting provides insight into the Council’s executive session suggesting significant near-term systemic action regarding hedge funds.

FSB Plans Broad Rewrite of Public Backstops, GSIFI Resolvability, Operational Readiness

The FSB’s 2023 Resolution Report today advises banks and public sector authorities to be prepared to access public sector funding in resolution, with the Board planning to review whether existing public sector backstops are adequate to meet potential failure scenarios.

Brown Renews Bipartisan Quest to Constrain Nonbank Banks

Advancing the big-tech concerns he most recently voiced before GSIB CEOs (see Client Report GSIB23), Senate Banking Chairman Brown (D-OH) has introduced S. 3538, bipartisan legislation to impose bank regulation on non-bank parent companies of insured depository institutions.

DOJ Targets Fraudulent Microtransactions

Cracking down on unauthorized bank account charges, the DOJ today announced multiple actions against “sham” companies alleged to have used misrepresentations or unauthorized charges to steal money from consumers’ financial accounts.

CRS Warns Credit Card Act Could Result In Risky Retailer Payment Networks

The CRS this week issued a report analyzing the Durbin-Marshall Credit Card Competition Act, S.1838 (see FSM Report INTERCHANGE10), projecting that fee caps will have a greater impact on transaction fees than competition, with …

20 09, 2023

DAILY092023

Eliza Allen2023-09-20T17:11:25-04:00September 20th, 2023|2- Daily Briefing|

Brown, Rounds Agree: AI Credit-Underwriting Warrants Regulatory Attention

At today’s Senate Banking hearing on AI in financial services, Chairman Brown (D-OH) argued that AI should be governed by the same rules as the rest of the financial system, with new law necessary if existing rules prove inadequate.

HFSC FinCEN Bills Draw Bipartisan Support

HFSC Chairman McHenry (R-NC) at today’s markup praised the scope of bipartisan support on today’s FinCEN, sanctions, and other national security bills.

HFSC Delays Bipartisan Sanction Bill Vote

Today’s HFSC markup also considered two bills addressing sanctions policy: H.R. 5512 from Rep. Sherman (D-CA) to require bank subsidiaries to comply with sanctions on Russia and Belarus and H.R. 760 from Rep. Barr (R-KY) imposing blocking sanctions on Chinese defense or surveillance companies and the third-party companies that supply them.

HFSC Dems Continue Strongly Opposing GOP Anti-CBDC Measure

The bipartisan spirit of today’s HFSC markup dissipated as Members fiercely debated H.R. 5403 from Majority Whip Emmer (R-MN), a bill that would bar the Fed from issuing a CBDC to individuals.

Gruenberg: New Shadow Bank Standards Would Cure a Capital Proposal Problem

FDIC Chairman Gruenberg today gave remarks arguing that FSOC along with OFR should establish a new reporting framework to assess the financial stability risks posed by nonbanks and ensure that public reporting is sufficient for market participants to understand nonbank counterparty risk.

HFSC Reports FinCEN, Sanctions, CBDC Bills

HFSC today unanimously reported H.R 760 sanctioning Chinese defense companies, H.R. 5512 requiring bank subsidiaries to comply with sanctions …

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…

20 10, 2022

DAILY102022

Eliza Allen2022-10-20T17:36:06-04:00October 20th, 2022|2- Daily Briefing|

Fed Staff Study: Climate Risk-Based Capital Impossible for Foreseeable Future

FRB staff released a stylized study of one critical climate-risk policy question: the extent to which banks should hold capital against it. Members of Congress have suggested this over recent years (see FSM Report GREEN9) and the BIS at the outset of its thinking recommended both “brown-penalty” and “green-incentive” capital charges (see Client Report GREEN).

FSB Presses for MMF, Open-End Rules; Government-Bond CCPs

Continuing its NBFI focus (see Client Report NBFI), the FSB today issued new recommendations to address government-security market illiquidity.

Gruenberg Gives No Clue as to Timing, Content of Inter-Agency Crypto Guidance

In remarks today, Acting Chairman Gruenberg reiterated the risks laid out in the FSOC digital asset report (see Client Report CRYPTO33), repeated warnings against misrepresenting FDIC deposit insurance, and announced forthcoming interagency crypto guidance without providing any details or timeline.

Bipartisan Senators Press Secondary Sanctions for Enactment

Sens. Toomey (R-PA) and Van Hollen (D-MD) released a readout of a conversation with the Ukrainian Ambassador on the upcoming G7 Russian oil price cap, positioning their oil sanctions amendment for inclusion in the National Defense Authorization Act (NDAA) in light of the Ambassador’s support for it.

Warren Calls for Stronger, More Transparent CFPB Remittance Rule

Joined by four Senate Democrats, Sen. Warren (D-MA) today sent a letter to CFPB Director Chopra asking that the agency strengthen its remittance rule to ensure greater transparency for exchange rates and fees it …

19 07, 2022

DAILY071922

Eliza Allen2023-01-06T14:46:12-05:00July 19th, 2022|2- Daily Briefing|

Fed Seeks to Bring Order Out of Looming LIBOR Chaos

Fighting the end-September deadline demanded in the new law (see FSM Report LIBOR7), the Federal Reserve Board today unanimously proposed the formulas by which benchmark-rate compliance will be judged in LIBOR-based legacy contracts without rate-fallback contractual clarity.

House Advances Sanctions, Cash-Access, Credit-Union, Mortgage Legislation to Uncertain Senate Fate

Chairwoman Waters (D-CA) today released an accounting of all the HFSC measures included in the massive National Defense Authorization Act (NDAA) approved by the House late last week.

House Judiciary Damns Bigtech, Skirts Financial Services

House Judiciary Committee Democrats today tried to reinvigorate antitrust legislation focused on bigtech companies with a report concluding that stronger antitrust and merger enforcement is needed for Google, Amazon, Facebook, and Apple.

CFPB Presses SPCs

The CFPB today issued a staff statement reiterating key points in February’s inter-agency statement encouraging special-purpose credit (SPC) programs. The new CFPB release reiterates the criteria for SPCs that comply with the Equal Credit Opportunity Act, noting also the benefits such programs may afford to racial equity.

OFR Details Commercial Real Estate Recovery, Emerging Risks

OFR today released a study detailing how the commercial real estate (CRE) market weathered the 2020 recession, also describing CRE’s future risks.

Daily071922.pdf…

26 01, 2022

Daily012622

Eliza Allen2023-04-12T13:55:15-04:00January 26th, 2022|2- Daily Briefing|

CFPB As Good as Its word on Campaign vs. “Junk” Fees
Today, the CFPB acted on its promise to the President to counter “junk fees,” announcing a new request for public input on “inflated and back-end” fees which Director Chopra says allow banks and other financial institutions to exploit average Americans.

In Side Note, Powell Backs SEC MMF Reforms
Although his press conference today almost entirely focused on monetary policy, FRB Chair Powell was also asked about asset price stability. He continues to stand by the Fed’s financial stability report (see Client Report SYSTEMIC92) suggesting risk, while elevated, is within acceptable bounds.

Partisan Battle Over Crypto Emerges on China Competition Bill
House Democrats’ America COMPETES Act introduced yesterday includes several provisions of note addressing financial-stability risks seeming to emanate from China.

Daily012622.pdf…