#Tillis – Federal Financial Analytics

26 07, 2023

DAILY072623

Eliza Allen2023-07-26T16:37:20-04:00July 26th, 2023|2- Daily Briefing|

Senate Democrats Stand Firm On “Junk Fee” Campaign

Today’s lightly-attended Senate Banking Financial Institutions Subcommittee hearing on banking and consumer fees showcased broad Democratic alignment with the Administration’s “junk fees” campaign and persistent Republican aversion to this effort as well as to the CFPB.

CFPB Flags UDAAP, Other Problematic Practices for Enforcement

The CFPB’s latest supervisory report not only details recent actions and priorities, but also expressly stipulates that certain activities identified in the course of supervision that have yet to be addressed by formal agency action are UDAAP.

SEC Targets AI Advice

Acting as anticipated following Gary Gensler’s fiery talk last week about AI risk, the SEC today voted 3-2 to propose new rules curtailing what it believes to be broker dealer and investment-adviser conflicts of interest due to predictive analytics.

Crypto-Jurisdiction Bill to Advance; Stablecoin Measure Likely to do so Tomorrow

Chairman McHenry (R-NC) and Ranking Member Waters (D-CA) announced at today’s HFSC markup that bipartisan negotiations on the committee’s stablecoin bill continue and despite the absence of any breakthrough.

DOJ Officials Seeks Merger Answers

In remarks today, Policy Director David Lawrence of DOJ’s Antitrust Division went beyond new, draft DOJ/FTC merger guidelines (see FSM Report MERGER12) to lay out questions on which the agencies particularly seek answers.

Powell Stresses Bank Discount Window Readiness

FRB Chairman Powell’s press conference today focused almost entirely on monetary policy, but the chair agreed that the discount window performed badly during the recent crisis and that banks need to …

22 05, 2023

M052223

Eliza Allen2023-05-22T11:47:38-04:00May 22nd, 2023|6- Client Memo|

How to Ensure That Independent Study of Regulatory Mistakes Leads to Near-Term, Meaningful Redress and Reform

Last week, a moderate Senate Democrat was joined by a Republican in yet another letter demanding an independent investigation of regulatory actions related to recent bank failures. But, as the absence of specifics in any of these letters makes clear, it’s a lot easier to call for independent inquiry than to lay out how to conduct one that might make a meaningful difference. Precedent is not encouraging – for example, Congress created a Financial Crisis Inquiry Commission after 2008, but it was an unqualified waste of time and money. Still, we urgently need an independent assessment of what went so wrong combined with another providing near-term, actionable reforms. Having served on one post-crisis national commission that did a bit of good, I recommend separating the forensic inquiry from the one focused on the future, guarding against conflicts without eliminating expertise, and assessing only a few clear questions suitable for practical answers that can be readily accomplished under current law.

M052223.pdf…

22 05, 2023

Karen Petrou: How to Ensure That Independent Study of Regulatory Mistakes Leads to Near-Term, Meaningful Redress and Reform

Eliza Allen2023-05-22T11:47:33-04:00May 22nd, 2023|The Vault|

Last week, a moderate Senate Democrat was joined by a Republican in yet another letter demanding an independent investigation of regulatory actions related to recent bank failures. But, as the absence of specifics in any of these letters makes clear, it’s a lot easier to call for independent inquiry than to lay out how to conduct one that might make a meaningful difference. Precedent is not encouraging – for example, Congress created a Financial Crisis Inquiry Commission after 2008, but it was an unqualified waste of time and money. Still, we urgently need an independent assessment of what went so wrong combined with another providing near-term, actionable reforms. Having served on one post-crisis national commission that did a bit of good, I recommend separating the forensic inquiry from the one focused on the future, guarding against conflicts without eliminating expertise, and assessing only a few clear questions suitable for practical answers that can be readily accomplished under current law.

The first decision point determines all the rest: whether the independent analysis is to be forensic – who dropped which heavy ball on whose toes – or focused on the future – what we learned and what to do about it. Many of the proposals for an independent commission, including the Congressional letter noted above, want their commission to do both, but none could do so well and asking for this is thus asking for trouble.

A good forensic analysis will reduce the moral hazard enjoyed by federal supervisors long exempt …

31 03, 2023

DAILY033123

Eliza Allen2023-03-31T16:49:24-04:00March 31st, 2023|2- Daily Briefing|

Senate Presses Fed Transparency, Accountability

Responding in part to testimony earlier this week (see Client Report REFORM217), Sens. Tillis (R-NC), Warren (D-MA), and seven colleagues have introduced legislation (S. 1160) to bring Federal Reserve Banks under the FOIA and force greater responsiveness to Congress – a response also to last year’s battle over master-account data and continuing crypto controversies. The measure would also mandate an independent IG, force the Fed to respond to Congressional ethics inquiries, and allow Senate Banking and HFSC bipartisan leadership to review confidential supervisory data. Sen. Tillis and three other Republicans also introduced S. 1155 to redesign the Fed.

Senate Dems Implicitly Chide Administration Reg-Reform Agenda, Demand Holistic Assessment

Following one of the somewhat surprising lines of inquiry at Senate Banking’s SVB hearing, Senate Banking Chairman Brown (D-OH) and all the Committee Democrats today pressed back against the list of rules the White House yesterday prioritized for rewrites. While they did not take issue with that list, they also want FSOC to undertake a holistic review of banking, consumer, and systemic rules, noting the importance in this effort of also protecting small banks from undue harm. The senators expressly want FSOC to go beyond the President’s focus on what they call “traditional” prudential standards also to examine non-quantifiable risks such as social media and AI.

Daily033123.pdf…

21 07, 2022

GSE-072122

Eliza Allen2023-01-04T16:01:36-05:00July 21st, 2022|4- GSE Activity Report|

Two Things

We yesterday provided a complete assessment of Sandra Thompson’s sojourn on HFSC’s griddle, noting the lack of any insights into essential issues such as conservatorship’s end or the full scope of CRT’s new beginning. More interesting to us are new battlelines on new products, including signs of renewed skirmishing over GSE self-insurance in lieu of MI. Unlike FHFA under Calabria, Fannie and Freddie appear to have a friend in one critical high places for new ventures, especially those said to be good for equitable finance.

GSE-072122.pdf…

10 05, 2022

FSOC26

Max Camateros-Mann2023-02-21T15:44:58-05:00May 10th, 2022|5- Client Report|

Stablecoin Risk Sparks Renewed Legislative Interest

Today’s Senate Banking Committee hearing with Secretary Yellen renewed calls for federal legislation based on recent algo-coin losses and resulting digital-currency market volatility. Chairman Brown (D-OH) and Ranking Member Toomey (R-PA) each noted the need for digital-asset legislation, with Mr. Toomey eliciting a commitment from Ms. Yellen to work with him to advance a measure, albeit without any specifics. We will await Thursday’s HSFC hearing before forecasting the prospects for stablecoin legislation in the relatively short time remaining in this session, with this report assessing the details of today’s discussion, as well as the Secretary’s very cautious approach to renewing SIFI designation while under fire from Sen. Warren (D-MA).

FSCO26.PDF…

10 11, 2021

Daily111021

Arezou Rafikian2023-06-01T14:21:14-04:00November 10th, 2021|2- Daily Briefing|

Agencies End COVID-Related Servicer Flexibility

The Federal banking agencies, CFPB, NCUA, and state financial regulators today rescinded their April, 2020 joint statement providing supervisory and enforcement relief from certain timing requirements under the mortgage servicing rules.

Daily111021.pdf…

2 11, 2021

Daily110221

Arezou Rafikian2023-06-02T12:57:12-04:00November 2nd, 2021|2- Daily Briefing|

Global Regulators Set Anti-Greenwashing Standards
IOSCO’s board today issued a report targeting asset-management greenwashing. With this in hand, we expect the SEC soon to proceed on the like-kind ESG standards Chairman Gensler has prioritized as an action item (see Client Report INVESTOR19).

Gensler Reiterates Wide-Ranging Agenda, Push-Out Plans
As noted yesterday, the President’s Working Group on Financial Markets (PWG) was joined by the OCC and FDIC yesterday issuing a report calling for prompt Congressional action to regulate stablecoins and, even in its absence, also for fast action by federal regulators and the FSOC.

Senate LIBOR Bill Faces Partisan Dispute
Senate Banking’s hearing today on LIBOR transition led to the first public announcement of a Tester-Tillis bill akin to the Sherman measure (see FSM Report LIBOR6) along with a bipartisan consensus on the need for action, if not also on how to act. Chairman Brown (D-OH) said that he supports the as-yet-unintroduced bill, but that it must prevent what he called the willingness of big banks to use benchmarks to their own advantage.

Daily110221.pdf…