P2P – Federal Financial Analytics

21 11, 2023

DAILY112023

Eliza Allen2023-11-21T10:36:54-05:00November 21st, 2023|2- Daily Briefing|

Thompson: No Regulatory “Silos” in a Crisis

Reiterating much in FHFA’s sweeping FHLB report, FHFA Director Thompson today reinforced suggestions that FHLBs can avoid acting as lenders of last resort because there are no regulatory “silos” in a crisis.

IMF Reconsiders CBDC

On Friday, the IMF updated its CBDC work, concluding that it is prudent for most countries to consider CBDC implementation even though nations are increasingly hesitant to do so.

IMF: Nations Should Block Fintech Reg Arbitrage

A new IMF study finds that Fintechs adversely affect bank profitability, concluding that “well-designed” fintech regulations are necessary to foster a level bank-fintech playing field.

House Opens New Front vs. FDIC

Following an official HFSC investigation and a raft of letters from Democrats and Republicans, House Oversight Subcommittee on Health and Financial Services Chairwoman McClain (R-MI) along with Rep. Biggs (R-AZ) today sent a letter to Chairman Gruenberg requesting briefings, documents, and communications regarding harassment and workplace practices.

Daily112023.pdf…

15 11, 2023

PAYMENT27

Eliza Allen2023-11-15T15:05:15-05:00November 15th, 2023|1- Financial Services Management|

Nonbank Payment Provider CFPB Supervision

Building on its director’s longstanding focus on fintech and tech-platform companies, the CFPB has proposed to extend its supervisory reach to nonbank providers of general-use digital payments services. The Bureau’s definition of these terms is broad and thus would bring almost all covered nonbank services into its ambit with considerable potential for subsequent demands for significant operational change along with heightened legal and reputational risk. The extent to which the Bureau pursues the ends enabled by this proposal remains to be seen, but it could set high roadblocks restricting the network-effect benefits major tech-platform companies have long enjoyed not only due to real and perceived regulatory exceptions, but also by virtue of their financial and commercial activities.

PAYMENT27.pdf…

1 06, 2023

Daily060123

Eliza Allen2023-06-01T16:58:53-04:00June 1st, 2023|2- Daily Briefing|

BIS Head Presses for New-Age, Tough Bank Supervision

BIS General Manager Carstens today absolved central banks in general and the Fed by clear inference from fault in recent bank failures by way of recent interest-rate hikes. Noting also that the Basel III construct is very resilient in design and should have prevented these collapses and then the secondary systemic risk that resulted around the world, Mr. Carstens points instead to failures by bank senior management and directors to execute basic risk-management obligations.

Exec-Comp Clawback Bill Takes Shape

With additional GOP support now also on the Banking Committee, Sen. Warren (D-MA) today introduced a revised version of the earlier, also-bipartisan bill on executive-compensation clawbacks following mid-March bank failures (see FSM Report COMPENSATION35). The new bill covers only banks with assets above $10 billion and direct and indirect compensation over three years, a change from the prior bill’s attempt to capture all compensation.

CFPB Sounds P2P Alarm

Building on its 2022 deposit-insurance representations circular (see FSM Report DEPOSITINSURANCE113), the CFPB today released an issue spotlight warning consumers that funds are at risk with payment apps such as Venmo. The FDIC is heightening pressure on nonbanks that gather funds which consumers may confuse with insured deposits (see FSM Report DEPOSITINSURANCE117), but doing so for payment apps is far more challenging because funds move quickly in and out of insured accounts.

Daily060123.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…

16 12, 2022

DAILY121622

Eliza Allen2022-12-16T17:19:37-05:00December 16th, 2022|2- Daily Briefing|

GHOS Presses Speedy Bank-Crypto Capital Standards

Basel’s governing body, the Governors and Heads of Supervision, today endorsed the Committee’s planned work schedule.

Fed Finally Finalizes LIBOR Transition Regs

Narrowly ahead of its year-end statutory deadline, the Federal Reserve today issued a final version of its detailed proposal (see FSM Report LIBOR8) to implement the LIBOR Act’s provisions on replacement rates for existing contracts without fallback language (see FSM Report LIBOR7).

Regulators Highlight P2P, Crypto, NBFI Risks at FSOC Meeting

Although most of the FSOC’s discussion today of the LIBOR transition and climate risks was perfunctory, comments on the now-released 2022 Treasury annual report were not.

McHenry, Davidson Point to Forex-Clearing Systemic Risk

Picking up a recent BIS report finding at least $65 trillion at risk in off-balance sheet foreign-exchange clearing, incoming HFSC Chairman McHenry (R-NC) and the top Republican on the panel’s fintech task force, Rep. Warren Davidson (R-OH), called on Fed Chairman Powell and Secretary Yellen to investigate what they consider a looming risk to U.S. financial stability.

Chopra Presses Cloud-Service Provider, Stablecoin Systemic Designation

CFPB Chairman Chopra’s written statement for the FSOC meeting is considerably different than the oral one described in our earlier client alert.

Daily121622.pdf…

21 01, 2022

Daily012122

Arezou Rafikian-12023-04-24T11:48:51-04:00January 21st, 2022|2- Daily Briefing|

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.

Daily012122.pdf…

5 11, 2021

Daily110521

Arezou Rafikian2023-06-02T12:44:11-04:00November 5th, 2021|2- Daily Briefing|

Flood Gates Open on CFPB Bigtech Policy
The Federal Register today includes the CFPB’s notice regarding its bigtech orders, with comment now due December 6. The short comment deadline reflects the speed with which the Bureau is pursuing bigtech data; the October 21 orders require companies to submit data by December 15.

Markey, Merkley Bill Seeks End to Big Bank Brown Finance
Sens. Markey (D-MA) and Merkley (D-OR) have introduced legislation to force the FRB to mandate that banks with greater than $50 billion in assets and all nonbank SIFIs submit plans describing how they will cut their financing for fossil fuel emissions by fifty percent by 2030 and then do so completely by 2050.

Daily110521.pdf…

21 10, 2021

Daily102121

Arezou Rafikian2023-06-05T15:25:18-04:00October 21st, 2021|2- Daily Briefing|

BIS Advances Push for Central Bank Green Investment
The BIS today announced a new program channeling central-bank funds to green bonds in the Asia-Pacific region. Eligible bonds will be issued by sovereigns, supranational, and corporates that comply with relevant anti-greenwashing standards. While limited, this program adds to growing global pressure for “green” central-bank investments, advancing an initial design for doing so in a 2020 BIS policy paper on green finance, supervision, and regulation (see Client Report GREEN).

CFPB Plows New Path into Bigtech, Competition Policy
With a newly-confirmed director with long experience battling bigtech, the CFPB today issued orders requiring large tech companies operating payments systems to turn over information on their payments products, business plans, and practices. Orders have initially been sent to Amazon, Apple, Facebook, Google, PayPal, and Square, but the Bureau is also studying Alipay and WeChat Pay.

Fed Hops To After Latest Ethics Revelation
Following a still more embarrassing story about Fed trading in today’s New York Times, the FRB this afternoon announced conclusion of a “comprehensive review” and new senior-officer trading restrictions. These bar holding individual securities, restrict active trading, and increase reporting requirements.

FSOC Adopts Tough-Talk, Cautious-Action Climate Plan
FSOC today approved the report on climate-related financial risk required by President Biden’s Executive Order (see FSM Report GREEN8) adopting the cautious, disclosure-focused framework we anticipated when the executive order was issued.

Daily102121.pdf…