#Senate Banking – Page 4 – Federal Financial Analytics

26 10, 2023

DAILY102623

Eliza Allen2023-10-26T16:48:48-04:00October 26th, 2023|2- Daily Briefing|

Senate Banking Focuses on Rapid-Fire Administration Action to Sanction Iran, Curb Hamas, Govern Crypto

Today’s Senate Banking Hearing on Illicit Finance and Terrorism showcased continued bipartisan support for stronger Iranian sanctions as well as for secondary sanctions on traditional financial institutions and cryptoasset firms facilitating terrorism. In addition to highlighting their bipartisan measure targeting DeFi-related money laundering and sanctions evasion, Sens. Reed (D-RI) and Warner (D-VA) noted that they are working on a bill that would apply secondary sanctions on banks and DeFi entities that transact with foreign parties that facilitate terrorist financing.

Bipartisan Small-Business Leadership Opens New End-Game Front

Opening a new front of Congressional concern about the capital proposal’s credit impacts, House Small Business Economic Growth Subcommittee Chairman Meuser (R-PA) along with Ranking Member Landsman (D-OH) and two others today sent a letter to FRB Chairman Powell and Vice Chair Barr “imploring” them to commission a comprehensive review of the capital proposal’s effects on small business lending. They also ask that all the agencies counteract any negative repercussions of the proposal, noting that this might entail significantly easing capital requirements.

Daily102623.pdf…

25 10, 2023

Daily102523

Arezou Rafikian2023-10-25T16:58:50-04:00October 25th, 2023|2- Daily Briefing|

Divided Fed Advances Climate-Risk Principles

Following the FDIC’s 3-2 vote yesterday to approve final inter-agency climate-risk standards, the FRB late yesterday afternoon released its 5-2 decision to do the same. Chair Powell emphasized as he has frequently before Congress that the guidance focuses only on climate financial risk and is thus fully consistent with the Board’s mandate, a reading of the principles also endorsed by Vice Chair Barr as he described its “narrow” construct.

CFPB Report Seeks to Validate Late-Fee Restrictions

Adding ammunition to the CFPB’s pending late-fee restrictions (see FSM Report CREDITCARD36), the Bureau’s biennial consumer credit card market report today finds that credit card companies in 2022 were significantly more profitable compared to pre-pandemic levels and charged consumers $130 billion in interest and fees.

Sharp Interchange-Fee Reduction Out for Comment

The FRB today voted 6-1 to approve a proposal mandating an approximate thirty percent reduction in debit-card interchange fees from the current cap (see FSM Report INTERCHANGE7). As under current laws and required by the Dodd-Frank Durbin Amendment (see FSM Report CONSUMER14), the new approach would only apply to issuers with over $10 billion in assets.

Senate Banking GOP Raises New CCP Finance Concerns

As the Administration meets with Chinese financial authorities to hammer out ongoing concerns, all Senate Banking Republicans led by Ranking Member Scott (R-SC) today sent a letter to Treasury Secretary Yellen USTR Head Tai raising concerns that the CCP’s expansion into U.S. and global payments markets …

23 10, 2023

DAILY102323

Eliza Allen2023-10-23T16:37:02-04:00October 23rd, 2023|2- Daily Briefing|

HFSC Plans Fintech-Friendly Legislation

Wednesday’s HFSC Digital Assets Subcommittee hearing on electronic payments will consider the state of various electronic payments offerings and lay the groundwork for several GOP measures to override current standards or give providers greater leeway. As a result, these bills are unlikely to advance in the Senate. Measures to be covered include a bill to be introduced by Rep. Steil (R-WI) to create a federal framework for the earned-wage lending programs the CFPB has recently criticized.

HFSC Plans Sanctions Review

As anticipated, Wednesday’s HFSC National Security hearing on Middle East sanctions will consider an array of bills designed to punish Iran, sanction Hamas, and – at least as far as Republicans plan – criticize the Biden Administration for actions such as agreeing to release $6 billion to Iran in exchange for several hostages. We have noted many of the bills on which a record will be built in prior client alerts, with the panel planning for example to advance H.R. 5923, a Lawler (R-NY) bill to extend current secondary sanctions related to Iran to all transactions with Chinese financial institutions and sanctioned Iranian banks related to oil purchases.

Daily102323.pdf…

20 09, 2023

DAILY092023

Eliza Allen2023-09-20T17:11:25-04:00September 20th, 2023|2- Daily Briefing|

Brown, Rounds Agree: AI Credit-Underwriting Warrants Regulatory Attention

At today’s Senate Banking hearing on AI in financial services, Chairman Brown (D-OH) argued that AI should be governed by the same rules as the rest of the financial system, with new law necessary if existing rules prove inadequate.

HFSC FinCEN Bills Draw Bipartisan Support

HFSC Chairman McHenry (R-NC) at today’s markup praised the scope of bipartisan support on today’s FinCEN, sanctions, and other national security bills.

HFSC Delays Bipartisan Sanction Bill Vote

Today’s HFSC markup also considered two bills addressing sanctions policy: H.R. 5512 from Rep. Sherman (D-CA) to require bank subsidiaries to comply with sanctions on Russia and Belarus and H.R. 760 from Rep. Barr (R-KY) imposing blocking sanctions on Chinese defense or surveillance companies and the third-party companies that supply them.

HFSC Dems Continue Strongly Opposing GOP Anti-CBDC Measure

The bipartisan spirit of today’s HFSC markup dissipated as Members fiercely debated H.R. 5403 from Majority Whip Emmer (R-MN), a bill that would bar the Fed from issuing a CBDC to individuals.

Gruenberg: New Shadow Bank Standards Would Cure a Capital Proposal Problem

FDIC Chairman Gruenberg today gave remarks arguing that FSOC along with OFR should establish a new reporting framework to assess the financial stability risks posed by nonbanks and ensure that public reporting is sufficient for market participants to understand nonbank counterparty risk.

HFSC Reports FinCEN, Sanctions, CBDC Bills

HFSC today unanimously reported H.R 760 sanctioning Chinese defense companies, H.R. 5512 requiring bank subsidiaries to comply with sanctions …

14 09, 2023

DAILY091423

Eliza Allen2023-09-14T16:47:09-04:00September 14th, 2023|2- Daily Briefing|

IOSCO Proposes Leveraged Loan, CLO Best Practices

IOSCO today released a consultation report proposing best practices for leveraged loans and CLOs that address origination and refinancing, EBITDA and documentation transparency, aligning interests from loan origination to end investors, managing conflicts of interest throughout the intermediation chain, and disclosures.

Durbin, Marshall Press Credit-Card Interchange Bill

Reiterating concerns expressed last month and comments yesterday on the Senate floor, Senate Whip and Judiciary Chairman Durbin (D-IL) and Sen. Marshall (R-KS) were joined this time by Sen. Welch (D-VT) and four House Members calling on Visa and Mastercard to reverse planned fee hikes.

GAO Presses for FSOC Power to Regulate, Not Just Designate

The GAO today issued a report recommending that Congress consider legislation allowing FSOC to compel regulatory action, arguing that this would better accomplish the Council’s mission because FSOC currently has limited power to respond to systemic risk.

HFSC GOP Highlight CBDC Privacy Concerns

As anticipated, HFSC Digital Assets GOP Members continued their staunch opposition to a U.S. CBDC, with Subcommittee Chairman Hill (R-AR) and Majority Whip Emmer (R-MN) asserting that private innovation can modernize payments without the risk of government surveillance.

Brown Doubles Down on Opposition to House Crypto Bill

Making it still more clear that he is not supportive of pending House cryptoasset legislation, Senate Banking Chairman Brown (D-OH) today sent a letter to Treasury Secretary Yellen, SEC Chairman Gensler, and CFTC Chairman Benham asking for views on where new authority may be needed.

Daily091423.pdf…

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…