#Regional Bank – Page 2 – Federal Financial Analytics

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.…

15 08, 2022

DAILY081522

Eliza Allen2023-01-04T12:03:15-05:00August 15th, 2022|2- Daily Briefing|

FDIC Study Finds Changing Assessment Rates Had Procyclical Effects During the Financial Crisis

A new FDIC staff study tackles an immediate concern in the wake of the FDIC’s proposal to raise DIF premiums (see FSM Report DEPOSITINSURANCE114): procyclicality. In what its authors describe as one of the first studies to provide large-scale empirical evidence on deposit insurance’s procyclical effects, this model-driven study looks at the effect of changing deposit insurance assessment rates during the period between 2009 and 2011. Using credit unions as a control group, it finds a 1.6 percent decrease in bank lending after a 7 bp increase in the assessment rate and a 0.3 increase after a 5-10 bp rate decrease.

Fed Tries to Sooth Payment-Access Critics with New Policy

Doubtless reflecting all the political pressure it’s under regarding payment-system access, the FRB today not only finalized its payment-system access rules, but also made sure to use an e-mail subject line containing the release that these rules are “transparent, risk-based, and consistent.” The board also states that the final standards are consistent with both its 2021 proposal (see FSM Report PAYMENT22) and the 2022 “supplemental” proposal (see FSM Report PAYMENT24) even though the supplemental was considerably more detailed than the initial attempt to give the Reserve Banks broad discretion without the appearance of inconsistent or even insider decision-making.

Daily081522.pdf…

10 02, 2022

DAILY021022

Eliza Allen2023-04-05T09:57:51-04:00February 10th, 2022|2- Daily Briefing|

KC Fed: 2020 Capital-Distribution Constraints Worked
Touching on a subject of considerable sensitivity as well as a policy issue subject to change under a new Fed, the Kansas City Federal Reserve Bank has released a study arguing that 2020’s limits on capital distributions contributed to greater systemic resilience. The paper tracks both share buy-backs and dividends over recent years, noting that GSIBs often distributed more than their income. Repurchases succeeded dividends as the principal capital-distribution medium since the great financial crisis, a shift found to give banks more flexibility to adjust distribution levels without significant investor backlash.

FHFA Leads Way on U.S. AI/ML Standards
FHFA today issued the first U.S. financial-agency supervisory guidance on AI/ML use by Fannie Mae, Freddie Mac and Common Securitization Solutions (not also the FHLBs). This goes well beyond the 2020 RFI released so far by the banking agencies (see FSM Report AI), with the standards also reflecting FHFA’s new equity focus in supervisory guidance specific to inclusive considerations.

Toomey Takes on the Entire Reserve-Bank System
In remarks today, Senate Banking Ranking Member Toomey (R-PA) heightened his critique of the Federal Reserve’s regional banks, suggesting that the System needs a sweeping overhaul.

CFPB Assesses Overdraft-Fee Marketplace
Reflecting the CFPB’s continuing critique of overdraft fees (see FSM Report CONSUMER38), the Bureau today posted a chart of overdraft and NSF fees at the largest banks, calling recent changes “encouraging.” However, the release does not retract recent allegations about their anti-consumer or -competition impact, …