#preemption – Federal Financial Analytics

18 12, 2023

DAILY121823

Eliza Allen2023-12-18T17:12:20-05:00December 18th, 2023|2- Daily Briefing|

House Dems Press Tax-Equity Bond Capital Fix

Emphasizing their strong support for the capital proposals, 107 Democratic lawmakers led by Rep. Sean Casten (D-IL) have sent a letter to Chair Powell, Chair Gruenberg, and Acting Comptroller Hsu again asking for revised treatment for clean energy tax-equity bonds.

Updated GSIB Indicator Amounts Now Effective

The Fed today published updated Aggregate Global Indicator Amounts pursuant to its GSIB surcharge rule (see Client Report GSIB5).

FSB Finds U.S. NBFI Assets Continue to Dwarf Banks

The FSB today released its 2023 Global NBFI monitoring report, finding that NBFIs continue to hold a larger percentage of financial assets than banks in the U.S.

DOJ/FTC Stand Firm on New Anti-Concentration Merger Policy

Justice and the FTC today released the final version of new merger guidelines, softening but not clearly weakening the agencies’ draft (see FSM Report MERGER12).

Warren, Allies Attack Hsu’s Preemption Policy

Making it clear that Acting Comptroller Hsu will have challenges from Democrats should the White House ever nominate him as Comptroller, seven Democrats led by Sen. Warren (D-MA) sent him a letter today accusing the agency of overstepping and abusing its preemption authority.

McHenry Asks CFPB to Change Open-Banking Secondary Data Approach

HFSC Chairman McHenry (R-NC) today sent a comment letter to CFPB Director Chopra reiterating the support expressed at a recent hearing (see Client Report CONSUMER53), for the agency’s open banking proposal (see FSM Report DATA4), but now asking for changes related to …

31 08, 2023

DAILY083123

Eliza Allen2023-08-31T16:04:01-04:00August 31st, 2023|2- Daily Briefing|

BIS Report: Big Tech in Insurance Poses Financial Stability Risks

The BIS Financial Stability Institute (FSI) released a report today highlighting the financial stability risks associated with big tech’s entry into insurance, noting that a big tech specific regulatory approach may be warranted. The report finds big tech has a significant footprint in the insurance industry as a service provider but its activities as risk carriers or intermediaries are limited. Thus, financial stability concerns stem from the concentration of technology services and linkages between financial institutions and commercial activities.

Fed Study: Fintech Partnerships Arbitrage National-Bank Preemption Power

A new study by Federal Reserve staff finds that strategic bank-fintech partnerships heavily and profitably target near- and low-prime consumers in states with restrictive interest rate ceilings. Thus, fintech partnerships – termed “rent-a-bank” arrangements by critics – in fact arbitrage national-bank preemption powers in states with strict usury ceilings. This is said to be due in large part to mainstream-bank and non-fintech aversion to higher-risk customers at lower interest rates.

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25 07, 2023

DAILY072523

Eliza Allen2023-07-25T17:18:26-04:00July 25th, 2023|2- Daily Briefing|

Key Democrat Takes On Fed Rate Hikes

Ahead of today’s FOMC meeting, Joint Economic Committee Chair Heinrich (D-NV) yesterday sent a letter to Fed Chair Powell cautioning against additional policy tightening.

Second HFSC Markup Targets Stablecoins, Regulatory Restrictions, ESG

Thursday’s HFSC has now added another day to its mark-up calendar this week, moving the stablecoin and ESG bills to Thursday doubtless in order to avoid an endurance contest before the August recess and still meet Chairman McHenry’s (R-NC) commitments.

Senate GOP Tries to Block Capital Rewrite

Just days before the banking agencies take up new capital rules, Senate Banking Ranking Member Scott (R-SC) and ten other committee Republicans sent a letter to Chairman Powell demanding greater transparency and prior consultation.

Waters Presses FHFA for FHLB Reform

Following FHFA listening sessions and in anticipation of a final report this September on the FHLB system, HFSC Ranking Member Waters (D-CA) late yesterday sent a letter to FHFA Director Thompson laying out a series of recommendations to significantly reform the system.

Ag Committees Slam SEC Custody Proposal

In a letter to SEC Chairman Gensler released today, Senate Agriculture Committee Ranking Member Boozman (R-AR) and Chairwoman Stabenow (D-MI) along with House Ag. Committee Chairman Thompson (R-PA) and Ranking Member Scott (D-GA) raised strong objections to what they called serious flaws in the SEC’s proposed custody rule (see FSM Report CUSTODY5).

Warren, Scott Renew Fed-Ethics Campaign

Continuing their bipartisan campaign against the Fed, Sens. Warren (D-MA) and Scott (R-FL) yesterday sent a letter…

28 03, 2023

DAILY032823

Eliza Allen2023-03-29T12:03:14-04:00March 28th, 2023|2- Daily Briefing|

CFPB Expands Scope of State Law

Reaffirming its preliminary determination, the CFPB today concluded that business-loan disclosure laws in several states are not preempted by TILA. This continues the Bureau’s reversal of prior preemption determinations from the OCC that gave national banks considerable protection from more stringent state standards. The grounds on which the CFPB did so in this case are that TILA is expressly intended for consumers and those state laws now allowed to stand cover businesses and “entrepreneurs” who are not consumers.

Global Regulators to Review Resolution Process

In an unusual plenary statement following a previously-scheduled meeting today, FSB members stated that recent events warrant review of the global resolution framework. The statement is brief and does not indicate how or when this might proceed, but – as noted in our previous report on CS-s failure’s fallout (see Client Report GSIB21), we expect a hard look at TLAC as well as renewed interest in ring-fencing.

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1 03, 2023

DAILY030123

Eliza Allen2023-03-01T16:38:23-05:00March 1st, 2023|2- Daily Briefing|

What’s Next For McHenry Privacy Bill

As we anticipated yesterday, HFSC reported H.R. 1165, Chairman McHenry’s privacy bill, on a party-line vote of 26-21. Discussions this morning lead us to conclude that Mr. McHenry plans to consider additional changes that could be made via a manager’s amendment when bringing the bill to the House floor given that its fate there is uncertain given the GOP’s slim majority.

CFPB Targets Public-Benefits Finance

The CFPB today published a “spotlight” examining numerous fees it says “erode” public benefit programs delivered through various financial products. Focusing in particular on prepaid cards, the spotlight states that the Bureau will monitor and may take action against entities violating consumer protection laws in the delivery of cash assistance. This comes following a major enforcement action in this area against Bank of America and reports of others pending against large banks.

Treasury Sets Out Steps Seemingly Towards A U.S. CBDC

Following up the President’s executive order on digital assets (see Client Report CRYPTO26) and Treasury’s subsequent report (see Client Report CBDC14), Under-Secretary Nellie Liang today outlined next steps leading to the Administration’s decision about CBDC benefits that will strongly guide the Fed’s CBDC final call. Ms. Liang details how CBDC and FedNow each have benefits, describing how CBDCs generally work and could function in the U.S.

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28 02, 2023

DAILY022823

Eliza Allen2023-02-28T17:16:34-05:00February 28th, 2023|2- Daily Briefing|

CFPB Treads Gingerly on Mortgage-Disclosure Exceptions

In a notice emphasizing the CFPB’s distaste for allowing regulatory exceptions, the Bureau asks for comment on an application for one to which it seems a bit more sympathetic.

FDIC Sees Sunny Side of Bank Earnings Data

In its review of banking-industry fourth-quarter results, the FDIC today notes a sharp increase in the gap between bank loan yield and deposit interest costs.

Basel Forecasts End-Game Capital Shortfalls

The Basel Committee today issued its latest monitoring report, finding that large global banks saw capital decreases to pre-pandemic levels even as liquidity ratios continued to improve.

Bipartisan China Bills Fly Through HFSC Markup

As anticipated, HFSC today reported five bills to censure China and protect Taiwan, along with bills addressing drug-trafficking financing, biomedical security and bank service company examinations.

Democrats Stand Firm versus Privacy Preemption

Following an orderly and bipartisan start to today’s HFSC markup, Democrats and Republicans today came to verbal blows over the Chairman’s data privacy bill.

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7 12, 2022

DAILY120722

Eliza Allen2022-12-07T17:42:12-05:00December 7th, 2022|2- Daily Briefing|

Gensler Stands by Enforcement-Focused Crypto Policy

In an interview today, SEC Chairman Gensler fiercely defended the Commission’s crypto enforcement history and attacked crypto exchanges, calling them “casinos” that fought to skirt investor-protection law rather than come into compliance. Rebuking calls from Sen. Warren (D-MA) for increased SEC crypto attention, he argued that the Commission is committed to regulating crypto securities and has already filed an abundance of enforcement actions.

CFPB Demurs on Key Preemption Decisions

Signaling an aversion to Federal preemption long sought by consumer advocates, the CFPB has made a preliminary determination that a New York State law that requires commercial financing disclosures is not preempted by TILA. It has also reached an initial decision that similar laws in California, Utah, and Virginia are also not preempted, reflecting the importance of this decision.

Dems Demand De-Risking Rewrite

A day after a senior Treasury official chastised banks for failing to de-risk on a risk-based methodology, Sen. Warren (D-MA), Rep. Omar (D-MN), and a group of Democratic Members of Congress wrote Secretary Yellen, FinCEN, and the banking agencies seeking an update on ways to ensure that AML compliance does not adversely affect Muslim and immigrant communities. Noting that a recent increase in sanctions also has led banks to de-risk charities, the Members point to resulting humanitarian problems due to lost aid.

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