#Scott – Federal Financial Analytics

12 09, 2023

DAILY091223

Eliza Allen2023-09-12T17:19:22-04:00September 12th, 2023|2- Daily Briefing|

GHOS Presses Basel Action on Lessons Learned

Basel’s group of Governors and Heads of Supervision (GHOS) met yesterday, listing strong bank risk management and governance arrangements, effective supervision, and the need for a robust regulatory framework as the primary lessons it learned from this year’s banking turmoil. GHOS also pressed its members to finalize their Basel III reforms, noting that most plan to implement them by the end of 2024.

Gensler Takes Swing-Pricing, AI Fire

At today’s Senate Banking hearing with SEC Chairman Gensler, Democrats largely defended the pace and scope of recent SEC work while Republicans criticized the agency for rulemakings they said were ideologically driven and inadequately analyzed. Chairman Brown (D-OH) applauded the SEC’s crypto enforcement actions and encouraged it to examine broker and investment adviser use of AI. Ranking Member Scott (R-SC) and several other Republicans sharply criticized Mr. Gensler for what they said was his lack of transparency and responsiveness to congressional inquiries.

Daily091223.pdf…

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…

21 07, 2023

DAILY072123

Eliza Allen2023-07-21T17:06:34-04:00July 21st, 2023|2- Daily Briefing|

GOP’s Crypto Bills Still Face Significant Partisan Problems

HFSC is now set for a Wednesday mark-up of two controversial crypto bills, one with shared jurisdiction with the Agriculture Committee governing regulatory jurisdiction and the other setting federal standards for payment stablecoins.

Senior GOP Senator Proposes Sweeping FRB Reform

Going beyond bipartisan legislation with Sen. Warren (D-MA) to redesign Fed governance to increase political accountability, Sen. Scott (R-FL) on his own has introduced a legislative package that would sharply contract the Fed’s monetary-policy and emergency-liquidity authority.

Clawback Bill Faces Tuberville Blockade

Reinforcing his stand against the executive-compensation clawback bill reported 21-2 by Senate Banking (see FSM Report COMPENSATION37), Sen. Tommy Tuberville (R-AL) today posted an op-ed laying out his reasoning.

Daily072123.pdf…

20 07, 2023

FedFin on: Senate Banking Kicks Deposit-Insurance Reform Down the Road

Arezou Rafikian2023-07-21T17:03:13-04:00July 20th, 2023|The Vault|

In the wake of today’s Senate Banking deposit-insurance reform hearing, it seems certain that there will be no legislation in the near term and most likely in this Congress to increase FDIC-insurance thresholds. Although the FDIC recommended a new approach to transaction accounts in its policy review following recent bank failures (see Client Report DEPOSITINSURANCE119), Senators on both sides of the aisle demurred. Chairman Brown (D-OH) made it clear that any change in FDIC-coverage limits is conditioned on final, tougher bank regulations, essentially telling banks that successfully opposing new rules means keeping FDIC coverage as is….

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

20 07, 2023

DEPOSITINSURANCE121

Eliza Allen2023-07-20T15:16:53-04:00July 20th, 2023|5- Client Report|

Senate Banking Kicks Deposit-Insurance Reform Down the Road

In the wake of today’s Senate Banking deposit-insurance reform hearing, it seems certain that there will be no legislation in the near term and most likely in this Congress to increase FDIC-insurance thresholds. Although the FDIC recommended a new approach to transaction accounts in its policy review following recent bank failures (see Client Report DEPOSITINSURANCE119), Senators on both sides of the aisle demurred. Chairman Brown (D-OH) made it clear that any change in FDIC-coverage limits is conditioned on final, tougher bank regulations, essentially telling banks that successfully opposing new rules means keeping FDIC coverage as is. Ranking Member Scott (R-SC) is no fan of new rules, but he also said that review of FDIC coverage should only follow significant improvements in bank supervision likely in his view to moot the need for higher deposit protection. Sen. Scott was also emphatic that higher thresholds would need to come with higher premiums that could adversely affect bank competitiveness and credit availability. Undeterred, Sen. Vance (R-OH) has introduced legislation to end deposit-insurance coverage limits for community banks. Senators on both sides of the aisle focused instead on ensuring community-bank relief from pending special assessments (see FSM Report DEPOSITINSURANCE120) and, for Sen. Warren (D-MA), urging higher premiums for “TBTF” banks.

DEPOSITINSURANCE121.pdf…

11 07, 2023

DAILY071123

Eliza Allen2023-07-11T16:38:06-04:00July 11th, 2023|2- Daily Briefing|

FRB-NY Staff: Climate Tradition Risk Meaningful, Manageable

A new blog post from Federal Reserve Bank of New York staff concludes that climate-transition risk in bank loan portfolios is meaningful, but also manageable. The paper uses general-equilibrium models to focus on forward-looking climate risk in scenarios based on current policy as well as orderly and disorderly transitions, an approach it believes differ from much retrospective analysis of carbon emissions as a measure of transition risk.

CFPB, OCC Team Up To Sanction BofA Transaction, Card Account Practices

The CFPB and OCC today took action against Bank of America in ways that renew questions about potential overlaps between the CFPB’s jurisdiction and that of the banking agencies. The costlier of the two actions from the CFPB ordered the bank to pay over $170 million in civil monetary penalties and restitution for a range of practices the Bureau regards as abusive and deceptive (see FSM Report CONSUMER39).

GOP Urges Supreme Court to Uphold Fifth Circuit CFPB Decision

Continuing the GOP’s longstanding campaign to redesign the CFPB, HFSC Chairman McHenry (R-NC), Senate Banking Ranking Member Scott (R-SC), and 130 Members of Congress filed an amicus brief today urging the Supreme Court to uphold the Fifth Circuit’s decision declaring the CFPB’s funding mechanism unconstitutional.

Daily071123.pdf…

27 06, 2023

FedFin on: Failed-Bank Compensation, Resolution

Arezou Rafikian2023-06-27T16:13:11-04:00June 27th, 2023|The Vault|

The Senate Banking Committee has overwhelmingly approved bipartisan legislation to reform executive compensation following larger insured-depository institution (IDI) failures, with parent-company executive compensation also at risk in some circumstances. Unlike previous bipartisan claw-back legislation, this measure is targeted to incentive compensation, not salary, expressly exempts “white knights,” institution-affiliated persons and directors, and gives the FDIC discretion also to allow senior officers to retain affected compensation in certain other circumstances…

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

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27 06, 2023

COMPENSATION37

Eliza Allen2023-06-27T16:00:07-04:00June 27th, 2023|1- Financial Services Management|

Failed-Bank Compensation, Resolution

The Senate Banking Committee has overwhelmingly approved bipartisan legislation to reform executive compensation following larger insured-depository institution (IDI) failures, with parent-company executive compensation also at risk in some circumstances. Unlike previous bipartisan claw-back legislation, this measure is targeted to incentive compensation, not salary, expressly exempts “white knights,” institution-affiliated persons and directors, and gives the FDIC discretion also to allow senior officers to retain affected compensation in certain other circumstances. Also unlike the prior bill, this measure would make it more difficult for the FDIC to resolve a failing IDI as it did for First Republic via an assisted acquisition by JPMorgan despite the overall prohibition on any U.S. institution holding more than ten percent of national deposits. The Senate bill also mandates that IDIs and parent companies adopt governance standards that give the firm power to claw back compensation in the event of weak condition or poor management practice.

COMPENSATION37.pdf…

22 06, 2023

DAILY062223

Eliza Allen2023-06-22T16:52:30-04:00June 22nd, 2023|2- Daily Briefing|

Gruenberg: End-Game Almost Done, Will Be Tough

In remarks today, FDIC Chair Gruenberg erased any of the doubt Chair Powell left yesterday as to the nature of the U.S. end-game capital rewrite (see Client Report FEDERALRESERVE74).

FSB Tackles Third-Party Risk

The FSB today issued a consultation on third-party vendor management, with comments due by August 22.

Senior Democrats Reintroduce Fed Racial Equity Measure

HFSC Ranking Member Waters (D-CA) and Senate Banking member Sen. Warren (D-MA) today reintroduced legislation that would create a new racial justice mission at the Fed.

Powell Announces Internal Endgame Draft, Defends FRB-SF

At a Senate Banking hearing today covering much of the territory discussed in yesterday’s HFSC hearing (see Client Report FEDERALRESERVE74), Chairman Powell noted that an endgame draft proposal has been circulated internally, he has been briefed on it and that all governors will have ample time to review it.

Daily062223.pdf…

16 06, 2023

Daily061623

Eliza Allen2023-06-16T16:49:58-04:00June 16th, 2023|2- Daily Briefing|

Waller Separates Monetary, Stability Policy

FRB Gov. Waller today defended recent rate hikes against criticism that they undermine financial stability, noting that monetary and stability policy are inter-related but must generally be addressed with different tools.

Brown-Scott Clawback Bill Adds Enforcement Teeth

In his first legislative mark-up since assuming the chairmanship in 2021, Banking Committee Chairman Brown (D-OH) will convene voting next Wednesday on compromise compensation-reform legislation on which he and Ranking Member Scott (R-SC) have agreed.

Hsu Warns of Tokenized-Settlement, AI Risk

Acting Comptroller Hsu’s speech today highlights both the benefits and risks of tokenization and AI, urging parallel development of new technologies and essential controls.

Democrats Try Again To Mandate TILA, CFPB Small-Business Authority

Banking Committee member Sen. Menendez (D-NJ) yesterday introduced legislation (S. 2021) along with Small Business Committee Ranking Member Velazquez (D-NY) (H.R. 4192) to extend TILA protections to small business lending, also giving the CFPB authority in this sector.

Fed Fears Little Systemic Risk

The financial-stability discussion in today’s report from the Federal Reserve ahead of next week’s hearings generally reiterates conclusions from the most recent Fed financial-stability report (see Client Report SYSTEMIC96): banks are generally sound and resilient and, despite MMF worries, most other vulnerabilities are of only moderate systemic concern.

Fed’s Long-Awaited Master-Account Database Goes Live

Conceding to a long-resisted and now statutory demand (see FSM Report PAYMENT25), the Federal Reserve today published the first database detailing who has or seeks access to Reserve Bank master accounts and services.…