#Thompson – Federal Financial Analytics

15 03, 2023

DAILY031523

Eliza Allen2023-03-15T16:58:30-04:00March 15th, 2023|2- Daily Briefing|

Waters Reiterates ICE/BKI Opposition

HFSC Ranking Member Waters (D-CA) released a statement today applauding the FTC’s move to block Intercontinental Exchange from acquiring the mortgage software company Black Knight.

Progressives Press For Tailoring Redo

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.

Bowman Presses Small-Bank Mergers, Climate Caution, Third-Party Guardrails

In remarks today, FRB Governor Bowman noted that delays in merger reviews cause significant operational and reputational risks and suggested considering all competitors when evaluating a small bank merger’s competitive effect to reduce delays.

New CFPB RFI Brings Data Brokers Under Scrutiny

Ahead of a planned rulemaking, the CFPB today released an RFI seeking comments on the business practices of data brokers, focusing on new business models to determine if certain practices fall under the scope of FCRA.

Warren, Blumenthal Call on DOJ, SEC to Investigate SVB

Although media reports indicate that an investigation is already under way, Sens. Warren (D-MA) and Blumenthal (D-CT) sent a letter today to Attorney General Garland and SEC Chairman Gensler urging them to investigate senior SVB officials if they are not already doing so.

FHFA Delays New DTI-Based Upfront Fee

Following an announcement this January that FHFA would implement changes to Fannie and Freddie’s single-family pricing framework, Director Thompson today announced that the Agency will delay the effective …

22 02, 2023

DAILY022223

Eliza Allen2023-02-22T16:44:44-05:00February 22nd, 2023|2- Daily Briefing|

BIS Backs Away From Old CBDC, Presses New “Unified Ledger”

BIS General Manager Agustín Carstens today distanced the global central bank somewhat from its prior calls for two-tier CBDC as quickly as possible (see Client Report CBDC6).

Administration Drops FHA Premiums in Broad Housing Push

In a victory for mortgage lenders and defeat for private mortgage insurance and the GSEs, Vice President Harris announced that FHA will shortly reduce mortgage premiums by .30 percent, saving the average homeowner $800 in total premiums or $67 a month.

GOP Opens Anti-CBDC Campaign

Starting the GOP’s 2023 campaign against CBDC with a specific initiative, Rep. Tom Emmer SP (R-MN) and nine Republicans have introduced H.R. 1122.

FDIC Found Remiss re Systemic Resolution

In its assessment of challenges facing FDIC leadership, the Office of Inspector General (OIG) finds that the agency may not be ready to handle an OLA or systemic resolution, nor is it yet able to assess climate financial risk and sanctions compliance.

FHFA Looks Into FHLB-Member Community Activities

Perhaps advancing FHFA Director Thompson’s commitment to review aspects of the FHLB System, her agency today released a request for views on the extent to which a Home Loan Bank member supported its community to retain eligibility for long-term System advances.

Daily022223.pdf…

16 02, 2023

DAILY021623

Eliza Allen2023-02-16T16:46:08-05:00February 16th, 2023|2- Daily Briefing|

House GOP Slams Beneficial-Ownership Database

Reiterating longstanding concerns, HFSC Chairman McHenry (R-NC) and National Security, Illicit Finance, and International Financial Institutions Subcommittee Chairman Luetkemeyer (R-MO) submitted a comment letter today strongly opposing FinCEN’s latest beneficial ownership NPR.

House GOP Decries SEC Crypto-Custody Construct

Reflecting GOP concerns about the SEC’s new custody proposal as well as broad GOP objections to much of what Chairman Gensler does, HFSC Republicans today tweeted that the proposal will not ensure sufficient investor safeguards in part because restrictions on bank custody services remain.

Biden Order Reasserts Racial-Equity Agenda

Reiterating much of his last racial-equity executive order, President Biden today issued an order directing federal agencies to establish equity teams and comprehensive strategies to implement the order’s new equity initiatives.

FSB Pledges Further Work on DeFi Financial-Stability Risks

The FSB today released a report finding that DeFi’s financial stability risks are limited but may grow should linkages increase to traditional finance.

CFPB: Unfair Credit-Card Competition Evident Via Data Suppression

Following strongly-worded letters to six credit card lenders last May, the CFPB today concluded that these companies have suppressed payment data for competitive purposes.

FHFA Floats Single-Family ESG Bonds

Building on its equitable-finance initiative, FHFA today released a request for input on the benefits and risks of Fannie and Freddie single family social bonds.

Daily021623.pdf…

13 02, 2023

GSE-021323

Max Camateros-Mann2023-02-13T10:49:54-05:00February 13th, 2023|4- GSE Activity Report|

FHFA Plans a Firm Hand on the FHLBs

Following our initial report, we turn here to a more detailed analysis of what’s in store for the Home Loan Banks following the Brookings high-impact forum on Home Loan Banks that are also facing far more unflattering public attention than has been their fate for years.

GSE-021323.pdf…

10 02, 2023

DAILY021023

Eliza Allen2023-02-10T17:02:31-05:00February 10th, 2023|2- Daily Briefing|

Waller Reiterates Fed’s Wary Cryptoasset Policy

In remarks today, FRB Governor Waller reiterated the Fed’s wary approach to cryptoassets, repeating the Fed’s requirements (see FSM Report CRYPTO31) for banks that wish to engage with crypto customers or activities. Following the collapse of FTX and its ripple effect on banks such as Silvergate (see Client Report CRYPTO38), Mr. Waller stressed that banks engaging with crypto customers must have a thorough understanding of their client’s business models, risk management systems and corporate governance.

Hsu Reprises, Expands Bank Merger Reform

In remarks today, the OCC Chief Counsel on behalf of Acting Comptroller Hsu stressed the need to update competition metrics, financial stability considerations, and community assessments in bank merger reviews, but gave no indication of when new merger policy may be finalized. Mr. Hsu argued that while HHI is an objective and transparent metric, it is no longer suitable for measuring competition because its deposit share-based approach fails to capture the competitive effect of nonbanks and online banking.

FHFA Outlines Substantive FHLB Reform Agenda

As anticipated earlier this week, FHFA Director Thompson today called the status quo of the FHLB system unacceptable and said that FHFA will make “meaningful” recommendations to improve the sector. This will take shape in a report following completion of FHFA’s roundtable series concluding in March. FHFA’s report will make statutory recommendations to Congress and lay out its own regulatory objectives, perhaps starting with an ANPR and/or regulatory guidance or supervisory actions.

Daily021023.pdf…

9 02, 2023

Daily020923

Eliza Allen2023-02-09T16:59:20-05:00February 9th, 2023|2- Daily Briefing|

FHFA Forecasts Substantive FHLB Action

Ahead of tomorrow’s comments on the FHLB System by Director Thompson (see forthcoming FedFin analysis), an FHFA official’s op-ed in the American Banker for the first time makes it clear that last year’s hearings will lead to substantive action. This rebuts suggestions Karen Petrou also discounted on a recent podcast when asked if the hearings were just a FHFA exercise to defer action.

Housing Finance Plays Second Fiddle At Senate Banking

Today’s Senate Banking Committee opening hearing for this Congress focused on public, rural, and rental housing. In addition, Chairman Brown (D-OH) concentrated on rental affordability; Ranking Member Scott (R-SC) addressed the federal deficit and federal housing policies.

Daily020923.pdf…

1 02, 2023

DAILY020123

Eliza Allen2023-02-01T16:53:57-05:00February 1st, 2023|2- Daily Briefing|

CFPB Set To Quash Credit-Card Late Fees

Taking action as anticipated following its June ANPR (see FSM Report CREDITCARD35), the CFPB today released an NPR that would curtail credit card late fees the Bureau calls “excessive,” moving ahead also with one aspect of the White House competition agenda.

Comment Deadline Set For CFPB Contract Registry Proposal

The Federal Register today includes the CFPB’s form-contract registry proposal. As noted (see FSM Report CONSUMER48), the Bureau’s NPR would establish a public registry requiring nonbanks to post contract provisions which the agency believes threaten consumer legal or free-speech rights.

Brown, Democrats Press Thompson On Enterprise Loan Sale Programs

Ahead of a housing hearing as soon as next week, Senate Banking Chairman Brown (D-OH) and four other Democrats today sent a letter to FHFA Director Thompson requesting a review of Fannie and Freddie’s nonperforming and reperforming loan-sales programs.

McHenry Confirms Privacy, Crypto Priorities; Rewrites HFSC Rules

At an HFSC organizational meeting, Chairman McHenry (R-NC) today emphasized that he wants to work with Democrats, but much of what he said is unlikely to facilitate this. For example, he noted with regard to crypto legislation that he wants to end the SEC’s enforcement-focused policy; as previously noted, any crypto legislation curtailing the SEC will run afoul of Democratic views in both the House and Senate.

Daily020123.pdf…

27 01, 2023

Al013023

Eliza Allen2023-01-27T17:11:36-05:00January 27th, 2023|3- This Week|

FHLBs Face the Footlights

FHFA Director Thompson will shortly take questions about the future of the Federal Home Loan Banks after a series of recent revelations cast these GSEs out of the obscurity they have long enjoyed at considerable advantage. Karen Petrou recently pointed to developments such as the System’s decision to serve as a wide-open window for downward-diving and arbitrage-seeking banks and she’ll talk more about it this Tuesday on a podcast with Rob Blackwell. Among the questions Mr. Blackwell asked was whether FHFA intends seriously to tackle FHLB reform after three hearings last year. As we noted at the time, these hearings were largely opportunities for FHLB fans to show their appreciation and FHFA to bide its time. Director Thompson may well wish to do the same, but she likely didn’t accept the invitation to speak just to say nothing.

Al013023.pdf…

23 01, 2023

GSE-012323

Eliza Allen2023-01-23T14:41:47-05:00January 23rd, 2023|4- GSE Activity Report|

The Fed’s Heavy Hand on Equitable Housing

Under Director Thompson, FHFA’s top policy priority is equitable housing. However, a ground-breaking study from Fed staff shows that FHFA is swimming upstream when the Fed raises rates. Combined with our own research showing that ultra-low rates also accelerate inequitable housing, the best FHFA can do to help lenders reach LMI borrowers is tread water – better than sinking, but still hard work getting pretty much nowhere.

GSE-012323.pdf…

25 10, 2022

GSE-102522

Eliza Allen2022-10-25T16:56:16-04:00October 25th, 2022|4- GSE Activity Report|

The Great Unbundling

As we noted yesterday, FHFA has decided not only to unbundle second and high-dollar loans from its flat-fee paradigm, but now to do the same for about one in five conventional conforming purchase loans outside these categories. Together with new cash-out refi fees, the agency is recrafting Fannie and Freddie into an express risk- and mission-pricing construct that alters the essence of the GSEs and thus of the market as a whole.

GSE-102522.pdf…