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16 12, 2022

DAILY121622

2022-12-16T17:19:37-05:00December 16th, 2022|2- Daily Briefing|

GHOS Presses Speedy Bank-Crypto Capital Standards

Basel’s governing body, the Governors and Heads of Supervision, today endorsed the Committee’s planned work schedule.

Fed Finally Finalizes LIBOR Transition Regs

Narrowly ahead of its year-end statutory deadline, the Federal Reserve today issued a final version of its detailed proposal (see FSM Report LIBOR8) to implement the LIBOR Act’s provisions on replacement rates for existing contracts without fallback language (see FSM Report LIBOR7).

Regulators Highlight P2P, Crypto, NBFI Risks at FSOC Meeting

Although most of the FSOC’s discussion today of the LIBOR transition and climate risks was perfunctory, comments on the now-released 2022 Treasury annual report were not.

McHenry, Davidson Point to Forex-Clearing Systemic Risk

Picking up a recent BIS report finding at least $65 trillion at risk in off-balance sheet foreign-exchange clearing, incoming HFSC Chairman McHenry (R-NC) and the top Republican on the panel’s fintech task force, Rep. Warren Davidson (R-OH), called on Fed Chairman Powell and Secretary Yellen to investigate what they consider a looming risk to U.S. financial stability.

Chopra Presses Cloud-Service Provider, Stablecoin Systemic Designation

CFPB Chairman Chopra’s written statement for the FSOC meeting is considerably different than the oral one described in our earlier client alert.

Daily121622.pdf

14 12, 2022

CRYPTO36

2022-12-14T17:26:30-05:00December 14th, 2022|5- Client Report|

Brown Backs Away from Crypto Legislation, Presses Again for New Rules

Senate Banking Committee Chairman Brown (D-OH) today backed away from prior statements about crypto legislation, focusing instead on the prospect of additional investigations into failing crypto firms and ongoing work with Secretary Yellen on a government-wide regulatory framework.  Today’s hearing still centered on legislative action, with Sen. Warren (D-MA) along with Sen. Marshall (R-KS) releasing new legislation to subject crypto firms to AML rules comparable to those applied to banks along with banning crypto mixers.  Sen. Lummis (R-WY) announced that she will reintroduce her stablecoin bill next year with Sen. Gillibrand (D-NY) (see FSM Report CRYPTO28), revising it in light of recent crypto debacles.  Sen. Haggerty (R-TN) flagged Binance’s newfound monopoly power and ties to China as a major concern, an issue echoed by Sen. Warner (D-VA) and, in conjunction with Chairman Brown’s investigative agenda, may well subject the world’s largest crypto exchange to U.S. legislative scrutiny if its current liquidity challenges do not preoccupy attention next year.

CRYPTO36.pdf

29 07, 2022

AL080122

2023-01-04T13:39:09-05:00July 29th, 2022|3- This Week|

No Summer Sojourn

As noted later in this weekly, Congress is almost completely out of town this week in one sense – the House is all the way gone and most Senate committees are clearing up old business.  We expect Senate Banking’s civil-rights hearing to be ornery and the others to be mostly rhetorical, but neither this nor the other evidence of seeming somnolence means nothing much will happen in August.

AL080122.pdf

25 07, 2022

DAILY072522

2023-01-04T15:47:24-05:00July 25th, 2022|2- Daily Briefing|

Stablecoin Bill Still in Limbo

As we noted last week, the fate of stablecoin legislation at this week’s HFSC mark-up has been uncertain.  The committee staff memo today does not include a bill in this area; it is our understanding that negotiations continue on a draft amenable to both Chairwoman Waters (D-CA) and Ranking Member McHenry (R-NC).

OCC Seeks Fintech, Nonbank Analyses

The OCC today calls for academic and policy-focused papers on the impact of fintech and nonbanks on banking and the markets for lending, deposit-taking, and payment services.  This sweeping inquiry is designed to inform the agency as policy continues to take shape in these high-profile areas, with the announcement today providing no insight into whether these papers – which will doubtless come also from trade associations and other advocacy groups – will do more than provide a symposium’s worth of discussion.

Stablecoin Rules – or Lack Thereof – Likely to Remain

As noted in media this afternoon, HFSC will in fact not mark up a stablecoin bill on Wednesday.  Instead, some staff indicate that a discussion draft will be released so that the process of crafting a bill can continue in August in hopes of a September vote.  However, even if one were to occur, the odds of legislation in this Congress are slim to none at so late a date in the absence of any meaningful Senate Banking action in this arena.

Daily072522.pdf

22 07, 2022

AL072522

2023-01-04T15:54:54-05:00July 22nd, 2022|3- This Week|

STABILIZING STABLECOINS?

On Wednesday, the House Financial Services Committee will mark up an array of bills that may or may not include as-yet-unintroduced legislation to rewrite the federal framework governing stablecoins.  As we noted (see Client Report FSOC27), the sector’s travails have concentrated Congressional attention on the action first outlined in November by the President’s Working Group (see Client Report CRYPTO21), with any legislation brought to a vote this week sure to reflect the latest thinking from both the PWG and at least some of the rest of the Financial Stability Oversight Council.  It only leaked revisions to the PWG plan and it’s far from clear if the CFTC agrees with these, but HFSC gives scant thrift to the CFTC.  It falls outside the Committee’s jurisdiction and thus what it wants must be advanced by the Agriculture Committee for it to have any bearing on floor deliberations.

AL072522.pdf

13 07, 2022

DAILY071322

2023-01-06T15:18:57-05:00July 13th, 2022|2- Daily Briefing|

Small Business Committee Urges Fintech Transparency, New CFPB Role in Fintech Lending

Today’s Small Business Subcommittee on Oversight, Investigations, and Regulations hearing on fintech transparency focused on financial practices that may harm small businesses’ access to credit.

HFSC Party Lines Form on CRA Rewrite

As anticipated, the Subcommittee on Consumer Protection and Financial Institutions today held a hearing examining the banking agencies’ proposed rule to modernize the CRA (see FSM Report CRA32).

Fed Proposes Debit-Card, Payment-System Data Collections

Although the Fed has yet to finalize a controversial proposal related to debit-interchange fees (see FSM Report INTERCHANGE8), it has proposed changes to how it collects debit-card information essential to implementing changes to network selection and, should it come to do so, fee calculations.

FSB Chair Reiterates Need for Crypto Regulation, Highlights Progress on Climate Roadmap

FSB Chair Klaas Knot’s letter today to the G20 ministerial reiterated all the points regarding COVID exit strategies, regulation of cryptoassets, and executing FSB’s climate roadmap outlined after June’s plenary meeting.

Senate Democrats Demand More Stringent, Binding Fed Ethics Standards

Senate Banking Committee Chairman Sherrod Brown (D-OH) joined by four other Democrats today sent a letter to Chairman Powell again calling for more stringent, enforceable Fed ethics standards, and reminded Mr. Powell in strongly-written arguments about the need to do so via binding regulation or by the kind of statutory change they have already introduced.

Global Regulators Press for Global Stablecoin Payment-Risk Standards

Doubtless spurred by FSB requests and market …

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