#Regional Bank – Federal Financial Analytics

16 03, 2023

DAILY031623

Eliza Allen2023-03-16T17:11:59-04:00March 16th, 2023|2- Daily Briefing|

FedFin Assessment: One CS Consequence – LISCC Reinstatement For All Large Foreign GSIBs

In the wake of CS’s distress, we draw client attention to a 2021 exchange sure to factor heavily in the political response.

Brown Presses For In-Depth SVB, Signature Review

As anticipated (see Client Report RESOLVE49), Senate Banking Chairman Brown (D-OH) today called on all the banking agencies and Treasury quickly to undertake a review of SVB and Signatures failures.

Warren Heaps Still More Blame On Powell

In another letter today, Sen. Warren (D-MA) once again lambasted Chair Powell for what she claimed was his direct contribution to the collapse of Signature Bank and SVB as well as a “a culture of corruption” at the Fed.

Senate GOP Blames Fed, California re SVB

Senate Banking Republicans today tweeted a series of comments citing articles going back to last year identifying SVB risk and suggesting strongly that the Fed and California state supervisors are at fault for missing clear warning signs.

Bipartisan Senators Push Better Beneficial-Ownership Data Access

Senate Budget Committee Chairman Whitehouse (D-RI) was joined by Sens. Wyden (D-OR), Warren (D-MA), Grassley (R-IA), and Rubio (R-FL) late yesterday in submitting a comment letter to FinCEN taking serious issue with its proposed implementation of the Corporate Transparency Act (CTA) (see FSM Report AML135).

Senate Finance Hearing Deepens SVB Divide

At a heated Senate Finance hearing with Treasury Secretary Yellen, Members were quick to deviate from the hearing’s budget-focused agenda to address who should bear the …

15 03, 2023

FedFin Assessment: Post-SVB Deposit Insurance Reform

Arezou Rafikian2023-03-15T16:58:47-04:00March 15th, 2023|The Vault|

Cementing prior denouncements of 2018 Dodd-Frank “rollbacks” into legislative action, 17 Democratic senators and 31 House Members today took direct aim at Trump-era banking policy by introducing legislation that would repeal Title IV of the Economic Growth, Regulatory Relief, and Consumer Protection Act. But, while this initiative is gaining considerable attention, its legislative prospects are dim – indeed, even Senate Banking Committee Chairman Brown (D-OH) suggested as much…

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

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15 03, 2023

DEPOSITINSURANCE118

Eliza Allen2023-03-15T12:48:33-04:00March 15th, 2023|5- Client Report|

FedFin Assessment: Post-SVB Deposit Insurance Reform

As promised in our first post-SVB impact assessment (see Client Report RESOLVE49), this report begins a series of analyses of specific policy issues. We start here with possible changes to FDIC insurance based on comments from Reps. Maxine Waters (D-CA), Blaine Luetkemeyer (R-MO), and other arguing either that the $250,000 limit for FDIC coverage needs to be eliminated or sharply increased. We also analyze the prospects for shifting the burden of higher DIF premiums to large banks as recommended by the ICBA, ending the FHLB’s super-lien due to the resulting, significant increase in FDIC resolution costs in recent failures, changes to the treatment of brokered deposits, and revisions to the FDIC’s overall risk-based assessment system (see FSM Report DEPOSITINSURANCE96). Other resolution issues – e.g., the future of proposed regional-bank standards (see FSM Report RESOLVE48) and bank merger policy will be covered in future reports along with the prospects for significant changes in bank capital, liquidity, and other prudential standards.

DEPOSITINSURANCE118.pdf…

4 10, 2022

American Banker, Wednesday, October 4, 2022

Arezou Rafikian2022-10-05T11:40:58-04:00October 4th, 2022|Press Clips|

Fed, FDIC plan for living wills sparks debate about best approach

By Kyle Campbell

New guidelines are coming for how large regional banks should prepare themselves for bankruptcies, but some policy experts are already questioning if they will go far enough. The Federal Reserve and the Federal Deposit Insurance Corp. issued a joint statement Friday that they will provide guidance on resolution planning for banks that have at least $250 billion in assets but do not qualify as too-big-to-fail….Karen Petrou, co-founder of Federal Financial Analytics, said it is difficult to read too much into what the Fed and FDIC have in mind about specific changes to their resolution plan policies. She said it is likely that Category II and Category III banks will face more scrutiny than they currently do, albeit not as much as the G-SIBs, but little is clear beyond that. Overall, Petrou said she supports a resolution planning framework that is conducted in an orderly fashion for all relevant institutions, which the agencies seem to be calling for, rather than the current regime, which places greater scrutiny on merging firms. “That is an appropriate approach, it’s good governance,” Petrou said. “If you were doing it on a deal-by-deal basis, based on a policy issue that cuts across regional banks, it’s really unfair to target one or another bank. This needs to be done across the sector.”

https://www.americanbanker.com/news/fed-fdic-plan-for-living-wills-sparks-debate-about-best-approach

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22 08, 2022

FedFin on: FRB Crypto-Activity Constraints

Arezou Rafikian2023-01-04T10:52:55-05:00August 22nd, 2022|The Vault|

Reflecting the concerns voiced in a recent executive order from President Biden and a subsequent request for views from Treasury, the Federal Reserve has joined the OCC in demanding prior notice from banking organizations that wish to undertake cryptoasset activities. The OCC also warned national banks already engaged in these activities to ensure that they are safe and sound, but the Fed has gone farther. It also demands that state member banks and BHCs already engaged in this sector notify their lead supervisor and ensure that…

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

22 08, 2022

CRYPTO31

Eliza Allen2023-01-04T10:52:02-05:00August 22nd, 2022|1- Financial Services Management|

FRB Crypto-Activity Constraints

Reflecting the concerns voiced in a recent executive order from President Biden and a subsequent request for views from Treasury, the Federal Reserve has joined the OCC in demanding prior notice from banking organizations that wish to undertake cryptoasset activities. The OCC also warned national banks already engaged in these activities to ensure that they are safe and sound, but the Fed has gone farther. It also demands that state member banks and BHCs already engaged in this sector notify their lead supervisor and ensure that these activities meet safety-and-soundness, compliance, consumer-protection, and other standards. As with the Board’s new payment-system guidelines, Reserve Banks may interpret these cryptoasset thresholds differently, perhaps leading to a patchwork of activities across the banking system.

CRYPTO31.pdf…

19 08, 2022

Al082222

Eliza Allen2023-01-04T11:09:21-05:00August 19th, 2022|3- This Week|

A Payment System Premised on Peccadillos?

As we noted at the start of this month, August may seem quiet, but that’s only because Congress is more or less muffled. Regulators remain busy, with the CFPB a-churn with new actions. Our in-depth analyses of the Bureau’s new digital-marketing rule (see FSM Report FINTECH30) and data-safeguards standards (see FSM Report INFOSEC28) make clear that the CFPB never sleeps. Bank regulators are also wakeful, with the most recent evidence of this to be found in the FDIC’s NSF-fee clamp down and the Fed’s supervisory cryptoasset statement and striking new payment-system access policy (see FSM Report PAYMENT25). As our in-depth analysis describes, this policy could well redefine winners and losers across the entire spectrum of U.S. financial services.

Al082222.pdf…

19 08, 2022

DAILY081922

Eliza Allen2023-01-04T11:13:22-05:00August 19th, 2022|2- Daily Briefing|

Payment-System Decision Process May Begin Today

Today’s Federal Register includes the Fed’s final payment-system access guidance (see FSM Report PAYMENT25). The guidelines are thus effective immediately. As noted, the final three-tier process for Reserve Bank deliberations sets out a process for streamlined, “intermediate,” and additional scrutiny based on an applicant’s charter, regulation, risk-profile, and numerous other, possibly discretionary factors.

CFPB Plans New Credit-Card Fee Disclosure Requirements

Following its ANPR on credit-card fees (see FSM Report CREDITCARD35), the CFPB today published a rationale for its campaign to control them and – despite the early stage of its rulemaking – a plan to do so via a data-collection proposal published yesterday in the Federal Register. Comments on the proposal are due by October 17 and the details now provided on the Bureau’s plans suggest it will get more than a few. The post argues that APR transparency would spur competition and empower consumers.

FDIC Goes After Crypto Companies for False Advertising

Based on its earlier warning and recent rule re advertising FDIC insurance, the FDIC today issued cease-and-desist orders against five cryptocurrency companies it claims are advertising that several of their crypto-related products are FDIC-insured. The order expressly instructs these companies to remove any reference that suggests products carry FDIC coverage within fifteen days and makes clear that a failure to comply will result in further FDIC action, the nature of which is not specified.

Daily081922.pdf…

18 08, 2022

PAYMENT25

Eliza Allen2023-01-04T11:30:15-05:00August 18th, 2022|1- Financial Services Management|

Payment System Access

Following considerable controversy surrounding how Federal Reserve Banks grant master accounts, it has finalized a somewhat more explicit set of guidelines along lines proposed the second time the Fed attempted to set guidelines via a “supplemental” proposal earlier this year amending its 2021 effort. Doubtless expecting the controversy which followed these final guidelines, the Fed was at pains in both the preamble and release to emphasize that the new standards are “transparent and equitable.” However, as noted below, some changes to the supplemental in fact increase Fed and/or Reserve-Bank discretion to grant or deny payment-system accounts on a case-by-case basis above and beyond the specifics again provided related to different charters and risks.

PAYMENT25.pdf…

18 08, 2022

FedFin on: Payment System Access

Arezou Rafikian2023-01-04T11:31:21-05:00August 18th, 2022|The Vault|

Following considerable controversy surrounding how Federal Reserve Banks grant master accounts, it has finalized a somewhat more explicit set of guidelines along lines proposed the second time the Fed attempted to set guidelines via a “supplemental” proposal earlier this year amending its 2021 effort.3 Doubtless expecting the controversy which followed these final guidelines, the Fed was at pains in both the preamble and release to emphasize that the new standards are “transparent and equitable.” However, as noted below, some changes to the supplemental in fact increase…

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