#Thompson – Federal Financial Analytics

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…

2 06, 2023

DAILY060223

Eliza Allen2023-06-02T17:01:47-04:00June 2nd, 2023|2- Daily Briefing|

HFSC Looks To Next Debt-Ceiling Fight

Following the near-death experience of a Treasury default, the HFSC Financial Institutions Subcommittee on Wednesday will hold a hearing on U.S. fiscal management. The memo lists the draft legislation to be considered, with the panel advancing substantive measures with at least some chances of bipartisan agreement. These include bills to require Treasury via the FSOC to make official contingency plans for Treasury-bond default.

GOP Crypto-Jurisdiction Bill Slams SEC

Ahead of a hearing next week, House Financial Services and Agriculture Republicans today released a draft bill allocating digital-asset jurisdiction largely to the CFTC. This was previewed at the joint panel’s last hearing (see Client Report CRYPTO43), where Democrats strongly objected to this approach. Press indicate that the draft has not been shared with Democrats and our read of the measure makes it clear that little has been done to mollify them. The bill would give the SEC jurisdiction over certain securities-related crypto activities and entities, but in several cases expressly prohibits it from preventing trading-platform operation or contesting CFTC jurisdiction.

Daily060223.pdf…

23 05, 2023

DAILY052323

Eliza Allen2023-05-23T17:15:40-04:00May 23rd, 2023|2- Daily Briefing|

House Advances Consensus Anti-China Reporting Legislation

The House yesterday voted 400-5 to approve H.R. 1156, bipartisan legislation addressing Congress’ China concerns by mandating a new study.

Gruenberg Endorses Bank On Accounts, Notes Continuing Racial Gaps

In remarks today largely devoid of policy implications, Chairman Gruenberg praised Bank On’s impact on financial inclusion, but noted that racial divides still persist as Black and Hispanic households are more likely to be unbanked than White ones at every income level.

IOSCO Aims at Ending Crypto-Market Arbitrage

Advancing global crypto standards, the International Organization of Securities Commissions today released a consultative report on the contentious question of centralized-market regulation with which a joint HFSC/AG Committee process is now wrestling (see Client Report CRYPTO43).

HFSC GOP Blasts GSE Fees, Supports FHLB System

Today’s HFSC hearing with FHFA Director Thompson was largely the LLPA battle we anticipated, with Republicans lambasting recent actions and Democrats tartly responding that Republicans did not know what they were talking about.

Hsu Echoes Gruenberg’s Bank-On Praises

Following Chairman Gruenberg’s remarks earlier today, Acting Comptroller Hsu similarly praised Bank On’s impact on financial inclusion while highlighting racial and income gaps.

Daily052323.pdf…

22 05, 2023

DAILY052223

Eliza Allen2023-05-22T16:53:15-04:00May 22nd, 2023|2- Daily Briefing|

HFSC Set To Tackle LLPAs, GSE Policy

As noted, HFSC tomorrow will grill FHFA Director Thompson. Republicans will surely emphasize their opposition to recent LLPAs laid out at a subcommittee hearing last week; Democrats will continue to defend them.

Americans Struggle With Inflation, Savings; Bank Use Stable

Although the Fed’s latest economic well-being study has grim macro results with significant political consequences, it also finds that 94 percent of Americans in 2022 had banking relationships, an unchanged rate from 2021 although gaps remain by age, race, ethnicity, and disability.

Kashkari Disputes Need For Broad Reg Rewrite If Big-Bank Capital Goes Way Up

Renewing his campaign to hike large-bank capital ratios, FRB-Minneapolis President Neel Kashkari today said that higher capital requirements would have prevented recent failures and that additional, over-complex rules are poor substitutes for them.

Daily052223.pdf…

17 05, 2023

GSE-051723

Eliza Allen2023-05-17T17:14:20-04:00May 17th, 2023|4- GSE Activity Report|

Setting Purpose Via Prices

With Republicans on the anti-LLPA warpath, FHFA is hoping to preserve as much of the current fee structure as possible without paying too high a political price, issuing a request for information (RFI) in hopes that letter-writing will keep everyone busy until Congress moves on to other matters. If FHFA does redefine the capital thresholds by which pricing is judged, it could well also redefine the products the GSEs will purchase.

GSE-051723.pdf…

15 05, 2023

DAILY051523

Eliza Allen2023-05-15T17:23:44-04:00May 15th, 2023|2- Daily Briefing|

Yellen Highlights Investor – Not Uninsured-Deposit – Runs, Buoys Sector Mergers

In an interview over the weekend, Treasury Secretary Yellen struck a decidedly different tone on bank mergers than voiced in the Administration’s policy prior to recent failures.

Gensler Outlines Top Financial Stability Concerns

In remarks today, SEC Chair Gensler outlined his financial-stability priorities.

Failed-Bank CEOs Defend Themselves, Contest Need For Receivership

Ahead of testimony tomorrow before Senate Banking, the CEOs of SVB and Signature have filed statements defending their actions and those of their colleagues.

FHFA Seeks Views On New Pricing Framework

Following last week’s announcement that it would postpone its controversial decision to retain an upfront fee related to a borrower’s debt-to-income level, the FHFA today released a Request for Input on the Enterprises’ single-family pricing framework as well as the process for setting their upfront guarantee fees.

Barr Stands His Supervisory, Regulatory Ground

Vice Chairman Barr’s testimony for Congressional hearings this week has just been released along with the Board’s 2023 supervision-and-regulation report.

Gruenberg Sticks To His Guns

FDIC Chairman Gruenberg’s Congressional testimony largely recounts prior statements about the condition of the banking system, recent bank failures, the new special-assessment proposal (see FSM Report DEPOSITINSURANCE120), and the agency’s deposit-insurance reform conclusion (see Client Report DEPOSITINSURANCE119).

Daily051523.pdf…

27 04, 2023

DAILY042723

Eliza Allen2023-04-27T17:05:53-04:00April 27th, 2023|2- Daily Briefing|

House GOP Presses Entirely New Digital Asset Jurisdictional Framework

Before today’s HFSC Subcommittee session on digital asset regulatory gaps began, full committee Chairman McHenry (R-NC) and House Ag. Committee Chairman Thompson (R-PA) along with Reps. Hill (R-AR) and Johnson (R-AL) issued a joint statement emphasizing that inter-committee collaboration will characterize future legislative efforts and announcing that the committees will hold a joint hearing next month. Opening the hearing, Subcommittee Chairman Hill argued that Congress must act to resolve definitional and jurisdictional disagreements between the SEC and CFTC. He also called for a disclosure regime tailored to the specific needs of digital asset purchasers. Ranking Member Lynch (D-MA) sided with SEC Chairman Gensler’s views that most digital assets are securities and also defended the current regulatory regime.

Daily042723.pdf…

26 04, 2023

Daily042623

William Cross2023-04-27T10:27:37-04:00April 26th, 2023|2- Daily Briefing|

Senate Banking Housing Plans Focus on Affordability, Access

At today’s Senate Banking hearing on affordable housing, Chairman Brown (D-OH) framed the committee’s legislative agenda in his opening statement but did not indicate any timing or future action.

CFPB Targets Piggyback-Mortgage Collection

The CFPB today issued guidance on debt collection practices it asserts violate the Fair Debt Collection Practices Act by attempting to collect time-barred debt where the statute of limitations has expired.

Comment Deadline Set For Sweeping FHFA Equitable Housing NPR

The Federal Register today includes FHFA’s NPR codifying Sandra Thompson’s equitable- and fair housing agenda in a body of rule that future directors would find more difficult to reverse and FHFA could enforce with more punitive standards.

HFSC GOP Demands FHFA Reverse LLPA Changes

HFSC Chairman McHenry (R-NC) and Rep. Davidson (R-OH) sent a letter to FHFA Director Thompson today demanding that the agency reverse changes to the GSEs loan level pricing adjustments (LLPAs).

LIBOR Transition Still Too Slow, Agencies Say

The Fed, FDIC, NCUA, OCC, and CFPB along with state bank and state credit union regulators today issued a joint statement reminding supervised institutions that USD LIBOR panels will end on June 30.

FDIC, OCC Deploy UDAP Powers for Targeted Deposit Fees

So far without the Fed, the FDIC and OCC today released supervisory guidance asserting that authorize-positive, settle-negative (ASPN) charges are an unfair practice under UDAAP criteria and present consumer compliance risk.

HFSC GOP Leaders Press Banking Agencies on Digital “Chokepoint” Policy

HFSC Chairman McHenry (R-NC) was …

20 04, 2023

DAILY042023

Eliza Allen2023-04-20T17:02:29-04:00April 20th, 2023|2- Daily Briefing|

Reed-Grassley Bill Lays Out Another Clawback Construct

Sens. Reed (D-RI) and Grassley (R-IA) introduced yesterday S. 1181, a bill allowing the FDIC to claw back the prior two years of failed bank executive compensation and prohibits them from working at another financial institution for at least two years.

FRB-NY Staff Find Severe Climate Risk At Big Four U.S. Banks But We Wonder

Based on a more in-depth study, a new FRB-NY post measures the market risk to financial institutions related to climate change.

FSB Report Shows Growing Supervisory Interest In Climate-Related Compensation Frameworks

A new FSB report on climate-related financial risk factors in compensation frameworks across the banking, insurance and asset management sectors concludes that financial institutions will need to continuously revise their climate-related criteria to ensure effective alignment of compensation with prudent risk management.

Brown Presses For Stringent FHLB Mission Standards

Following considerable furor over the role of the FHLBs in recent bank failures, Senate Banking Chairman Brown (D-OH) has written to FHFA Director Thompson requesting that the agency’s planned FHLB report also include a detailed assessment of this issue.

Waller Sees Promise In Tokenization, AI

Following prior comments about crypto risk, FRB Gov. Waller today highlighted two innovations he believes may well have natural use cases if their risks can be contained or mitigated.

Fed Study: Bank Enforcement Action Resolution Improves Minority Lending Outcomes

A new Federal Reserve paper concludes that enhancing bank loan and internal governance policies is critical to improving access to credit for minority …

20 04, 2023

GSE-042023

Eliza Allen2023-04-20T15:30:53-04:00April 20th, 2023|4- GSE Activity Report|

From Plans To Purpose

FHFA yesterday proposed a sweeping rule that would codify Sandra Thompson’s equitable- and fair-housing standards in a rule that any future FHFA director would have to work a lot harder to reverse. Indeed, not only would new plans become a mandatory part of the GSEs’ mission, but violations of them by Fannie or Freddie or any other fair-lending, equity, or related standard by all of the housing agencies could be sanctioned as unfair or deceptive acts or practices (UDAP), a page from the CFPB’s rulebook that affords a far greater scope to call an action discrimination and then punish it at even greater legal and reputational cost. Even if spared new plans – and that’s a big if – Home Loan Banks would also be brought into a far more exacting equity construct far beyond current adherence to statutory AHP requirements.

GSE-042023.pdf…