#OFAC – Federal Financial Analytics

23 11, 2022

DAILY112322

Eliza Allen2022-11-23T12:42:48-05:00November 23rd, 2022|2- Daily Briefing|

OFAC Updates Guidance For Price-Cap Sanction Compliance

Reflecting ongoing negotiations about the level of the oil-price cap, OFAC last night provided updated guidance to banks and insurers about when transactions may violate this latest sanction. The new guidance identifies “covered services” for financing; this means a commitment for the provision or disbursement of debt, equity, or economic resources related to the maritime transport of Russian oil. However, and as before, U.S. persons are authorized to provide covered services if the Russian oil is purchased at or below the price cap.

FDIC Signals Tougher GSIB Resolution Reviews

With the FDIC signaling a tough new approach to resolution plan approval, the FRB and FDIC today announced the results of the resolution plans filed by U.S. GSIBs in July, 2021. All the banking organizations saw their plans approved except for Citigroup, which had noted shortcomings due to data quality and management concerns; the bank now has until January 31, 2023 to submit a revised plan. FDIC Acting Chairman Gruenberg noted that, going forward, the agencies will conduct more detailed reviews of internal testing results and independent capability assessments.

Daily112322.pdf…

12 09, 2022

DAILY091222

Eliza Allen2022-10-13T12:00:09-04:00September 12th, 2022|2- Daily Briefing|

Senate Banking GOP Demand CFPB Recant, Retreat, Redo

All Republican members of the Senate Banking Committee today sent CFPB Director Chopra a scathing letter challenging his legal authority to undertake many recent actions. The letter specifically cites what it calls the Bureau’s “smear campaign” against banks offering optional overdraft services, calling its February list of the top 20 banks by revenue from overdraft fees an abusive “name-and-shame” tactic.

OFAC Eases Implementation of Oil Price-Cap Sanctions

As anticipated, OFAC late Friday issued initial guidance to banks and insurers on Russian oil price-cap compliance. Although OFAC plans to follow this guidance with a more comprehensive statement and a “red-flag” advisory, it now makes clear that banks and insurers will not be liable for price-cap violations related to their financing or coverage if the financial company has no independent knowledge of the actual price and reasonably relied on a customer’s attestation.

Fed Study: Credit Profitability Depends on NIM

At a time when credit-card rates reached a quarter-century high, the Fed has released a staff study using new data to conclude that card interest rates are by far the most important source of issuer profitability. The study decomposes credit-card income into component parts (interchange fees, interest charges, and consumer fees) with interest-rate revenue accounting for eighty percent of card profitability at the largest bank issuers.

Daily091222.pdf…

30 06, 2022

DAILY063022

Eliza Allen2023-01-24T15:53:35-05:00June 30th, 2022|2- Daily Briefing|

OFAC Updates Counter-Terrorism Sanctions

OFAC today adopted a final rule that amends the Global Terrorism Sanctions Regulations to implement a 2019 executive order and make several minor technical changes.

Basel Crafts Stringent New Regime for Crypto Exposures

As promised, the Basel Committee today tried again to craft a global prudential regime for bank crypto exposures. We will shortly provide clients with an in-depth analysis of the new consultation, which replaces a controversial first round (see FSM Report CRYPTO19) with one that continues add-on capital requirements for higher-risk digital assets (now redefined for stablecoins).

FSB Frets About Commodity, Resilience Risk

The FSB’s plenary today is far more pessimistic about both macroeconomic and financial conditions than it was just a month ago. Although it then worried about commodity-market volatility, these concerns now are heightened by large margin calls, “undetected” leverage, and concentrated exposures.

CFPB Pledges Guidance on Wage Access Products

The CFPB today terminated the Sandbox Approval Order for Payactiv, an earned wage access company, removing an exemption for some of the company’s products from liability under the Truth in Lending Act. Payactiv requested the termination in order to make changes to its fee model, as changes to its products would require modifications to the order.

Daily063022.pdf…

22 06, 2022

DAILY062222

Eliza Allen2023-01-25T15:55:01-05:00June 22nd, 2022|2- Daily Briefing|

Treasury Issues Stern Sanctions Warning to Foreign Banks

In remarks today to UAE bankers, Deputy Treasury Secretary Wally Adeyemo warned that foreign financial institutions are subject to possible sanction if transactions touch sanctioned entities via any U.S.-domiciled point.

CFBP Follows Threats with Credit-Card Action Plan

Consistent with its promises as recently as last week, the CFPB today released an ANPR examining ways to govern what it calls excessive late fees charged by credit-card issuers and announced broader initiatives in this sector.

CBDC Authorizing Legislation Takes Shape

Building on his HFSC subcommittee’s CBDC hearing record (see Client Report CBDC13), Rep. Jim Himes (D-CT) today released a white paper outlining legislation he plans to advance to authorize and define CBDC for the United States.

House Set to Report Revised ILC Reform Bill

As anticipated, HFSC seems likely to report H.R. 5912, ILC-reform legislation introduced by Rep. Chuy García (D-IL) (see FSM Report ILC13). The measure subjects ILCs to bank regulation, rolling back the FDIC’s rule during the Trump Administration providing these charters with unique regulatory advantages (see FSM Report ILC15).

Daily062222.pdf…

15 06, 2022

CRYPTO28

Eliza Allen2023-01-26T15:43:09-05:00June 15th, 2022|1- Financial Services Management|

U.S. Digital-Asset Framework

After protracted negotiations and much public attention, bipartisan senators have introduced a far-reaching bill designed to encourage digital-asset use without undue risk to consumers, investors, or the financial system. The bill decides most, if not all, of the outstanding regulatory barriers to digital-asset use in favor of digital assets and their providers. Provisions in many cases go farther than public discussion has so far noted – for example, the measure not only expands the ability of digital-asset providers to reach retail and wholesale customers, but also gives them access to FDIC resolution without the cost of paying insurance premiums or coming under many of the rules that govern insured depositories. Digital-asset providers could also make loans without the disclosures designed to be transparent to less well-informed consumers or the other consumer-protection standards administered by the CFPB.

CRYPTO28.pdf …

14 06, 2022

FedFin On: U.S. Digital-Asset Framework

Arezou Rafikian2023-01-27T15:30:30-05:00June 14th, 2022|The Vault|

After protracted negotiations and much public attention, bipartisan senators have introduced a far-reaching bill designed to encourage digital-asset use without undue risk to consumers, investors, or the financial system. The bill decides most, if not all, of the outstanding regulatory barriers to digital-asset use in favor of digital assets and their providers. Provisions in many cases go farther than public discussion has so far noted – for example, the measure not only expands the ability of digital-asset providers to reach retail and wholesale customers, but also gives them access to FDIC resolution without the cost of paying insurance premiums or coming under many of the rules that govern insured depositories…

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

9 05, 2022

DAILY050922

Eliza Allen2023-03-01T13:21:36-05:00May 9th, 2022|2- Daily Briefing|

U.S. Adopts Powerful Back-Door Campaign vs. Shell Companies, Trusts

In conjunction with a G-7 statement strongly condemning Russia, Treasury took an innovative move to address shell companies linked to the Russian Federation even as FinCEN’s beneficial-ownership rules remain bogged down.

Hsu Promises Deal-By-Deal Review of Large Regional M&A Pending Broad, Forward-Looking Policy

Citing changes in both U.S. banking and inequality since the last round of merger-policy statements in 1995, Acting Comptroller Hsu today called for a new policy that is neither pro- nor anti-merger but rather determines which larger mergers are “good” transactions so that only risky ones are rejected.

SEC Bows to Critics with Longer Comment Periods

In a significant concession to Congressional Republicans and industry critics, the SEC today extended the comment period for two of its most controversial initiatives. The deadline for comments on its climate-risk disclosures is moved forward by twenty-eight days to June 17.

CFPB Takes Administrative Action Expanding ECOA Reach, Lender Risk

Living up to its promise on Friday to address structural racism, the CFPB today issued a new advisory extending its fair-lending enforcement scope under the ECOA to all aspects of a credit transaction, not just loan origination or servicing.

Daily050922.pdf…