#treasury – Page 2 – Federal Financial Analytics

24 10, 2023

DAILY102423

Eliza Allen2023-10-24T17:18:54-04:00October 24th, 2023|2- Daily Briefing|

McHenry, Barr Blast Basel Adherence in End-Game Regs

Although today’s hearing challenging regulatory actions aligned with global regulators was postponed, HFSC Chairman McHenry (R-NC) and Financial Institutions Subcommittee Chairman Barr (R-KY) today kept up the pressure, releasing a letter to the GAO commissioning a study of the end-game rules.

New CRA Reg Sets Controversial, Complex Standards

Leading the way to certain inter-agency approval, the Federal Reserve today voted 6-1 to approve a final version of their 2022 controversial proposal (see FSM Report CRA32).

FDIC OIG: Supervisors Missed So Much, Acted So Slowly re SBNY

The FDIC’s OIG report today on SBNY’s failure follows much of the line the Fed’s OIG took when it came on the material-loss review of SVB’s collapse.

House Republicans Pressure Biden on $6 Billion Iran Ransom

Although HFSC continues to cancel all its hearings as the speakership battle continues, its Oversight Subcommittee today optimistically released a memo outlining goals for Thursday’s Iran-sanctions hearing.

Treasury Presses CSPs to Negotiate With Banks

Treasury Assistant Secretary for Financial Institutions Graham Steele today highlighted Treasury’s work with cloud service providers (CSPs) to improve transparency and security.

Divided FDIC Advances CRA Rewrite, Climate-Risk Principles

As anticipated, the FDIC on a 3-2 vote joined the Fed in approving a 1400+ page final CRA rule.

Daily102423.pdf…

20 10, 2023

Al102323

Eliza Allen2023-11-13T15:46:12-05:00October 20th, 2023|3- This Week|

Relentless Pressure and Resulting Concession

On Friday, the Federal Reserve offered an olive branch – small and partial, but still a branch – to Republican critics of pending standards and the big banks powering up all this pain. As we noted, the comment deadlines for the capital and GSIB-surcharge rules have been extended to January 16, a move also designed to thwart litigation based on procedural considerations. The Fed has also announced a new data-gathering exercise in which stakeholders can send in “data” but due to which much more input will also surely flow. This exercise also answers procedural critics and protects the bill, with the deadline here also January 16.

Al102323.pdf…

18 10, 2023

DAILY101823

Eliza Allen2023-10-18T17:19:09-04:00October 18th, 2023|2- Daily Briefing|

Treasury Responds to Hamas Sanctions Pressure, More to Come

Reflecting ongoing and high-impact Congressional pressure, OFAC today sanctioned ten Hamas terrorist group members, operatives, and financial facilitators including the virtual currency exchange service known as Buy Cash.

CPMI Wants Faster Payments

The BIS Committee on Payment and Market Infrastructures today submitted an interim report to the G20 with ten initial considerations regarding the structure, design, and oversight of interlinking arrangements for fast payment systems.

Treasury Reiterates CBDC Interest

Treasury International Affairs Under-Secretary Jay Shambaugh yesterday stated that Treasury has a “complementary role” in addressing CBDC’s role in the payment system, reinforcing the likelihood that Treasury continues to press the FRB to go farther into CBDC than the Fed seems willing to do (see Client Report CBDC14).

Senate Sides with Industry versus CFPB Small-business Reporting

Despite a veto threat from the White House, the Senate today voted 53 to 44 to authorize Congressional Review Act withdrawal of the CFPB’s small business reporting rule.

Daily101823.pdf…

13 10, 2023

GSE-101323a

Eliza Allen2023-10-13T15:22:52-04:00October 13th, 2023|4- GSE Activity Report|

30-10 or Bust

With smaller lenders today joining MBA, NAR, and HomeBuilders’ campaign to squeeze the 30-10 spread, we take a look at the odds the White House, Fed, or Treasury will do as hoped. We think it more than possible that the PSPA could be revised with FHFA consent to allow the GSEs to hold more of their own MBS as a spread stabilizer; whether the GSEs will do so unless forced is another question given the considerable capital cost this would exert.

GSE-101323a.pdf…

12 10, 2023

DAILY101223

Eliza Allen2023-10-12T17:09:17-04:00October 12th, 2023|2- Daily Briefing|

FSB Calls for More Private Climate Disclosures

Expressing considerable satisfaction with climate-risk disclosure progress, the FSB today released a report finding that all member jurisdictions either have or plan climate disclosure regimes, but there still needs to be greater private-sector self-reporting.

Pressure Builds for Heightened Iran, China Sanctions

Ahead of the hearing we anticipated earlier this week, HFSC Republicans have introduced several bills designed to increase financial pressures on Iran to punish it for the Hamas attack.

EU Regulators Add ESG Considerations to Regulatory, Supervisory Standards

In a bit of gold plating for what it believes to be the public good, the European Banking Authority today issued a report pressing for Pillar 1 capital charges for activities posing ESG risks with particular attention to climate.

OMB Redesigns Federal Rulemaking to Consider, Increase Competition

Acting under the President’s competition executive order (see Client Report MERGER6), OMB’s Office of Information and Regulatory Affairs yesterday issued new guidance governing federal rulemaking stipulating express assessment of the impact of new or prospective rules to enhance market competition.

CFPB, DoJ Issue Immigration Discrimination Warning

Taking action that may in some cases put lenders in conflict with state law, the CFPB and DoJ stated today that “unnecessary or overbroad reliance” on immigration status in a credit decision may violate the ECOA.

Daily101223.pdf…

28 09, 2023

DAILY092823

Eliza Allen2023-09-28T16:44:03-04:00September 28th, 2023|2- Daily Briefing|

White House Resilience Plan Focuses on Physical Infrastructure, Not Finance

The White House today released a National Climate Framework focused principally on promoting climate resilience in non-financial sectors such as building and energy use, improving federal agency climate preparedness, ensuring land and water resilience, and increasing climate-related community benefits and job opportunities.

BIS Conducts Successful Wholesale CBDC FX Pilot

Looking at the wholesale CBDCs of most interest in the U.S., the BIS today announced the conclusion of Project Marina, a wholesale CBDC FX pilot with DeFi elements among the central banks of France, Switzerland, and Singapore.

OCC Moves Interest-Rate Risk to Supervisory Priority List

The OCC today released its 2024 bank supervision operating plan announcing that there will be heightened supervision focus on interest-rate risk, AML/CFT, payments, DLT, and CRA.

All But The Smallest, Simplest Regional Banks Face Tougher Supervision

Signaling tougher supervisory standards for most regional banks, the long-anticipated Federal Reserve OIG report on SVB’s failure largely reiterates findings in Vice Chair Barr’s SVB report (see Client Report REFORM221) on failures by Board and FRB-SF supervisory staff quickly to adapt to SVB’s rapidly-changing risk profile.

Gruenberg Again Calls for Targeted Deposit Insurance Reform

In remarks today, FDIC Chair Gruenberg said that cross-border cooperation enhanced resolution of SVB’s international subsidiaries, using a talk to global deposit insurers also to reiterate prior recommendations on deposit-insurance reform (see Client Report DEPOSITINSURANCE119).

Daily092823.pdf…

25 09, 2023

DAILY092523

Eliza Allen2023-09-25T16:05:07-04:00September 25th, 2023|2- Daily Briefing|

IMF Report: CBDC Designs Could Boost Financial Inclusion

On Friday, the IMF released a report concluding that a well-designed CBDC could foster financial inclusion and act as an entry point for the unbanked to the broader financial system. This will strengthen Democratic demands for a U.S. CBDC, but we expect GOP opposition to remain firm and the Fed’s posture to retain its current focus on wholesale CBDCs.

FRB-NY: Stablecoins, MMFs Have Same Dynamic Runs

An FRB New York study today concludes that stablecoin investors behaved similarly to MMF investors in numerous recent runs. Staff found that investors consider a stablecoin to have been effectively depegged once its price drops below $0.99 which triggers a run and mirrors the dynamics of MMFs “breaking the buck.”

Senate Dems Target SIFI Designation, Scenarios to Curb Climate Risk

Senator Warren (D-MA) along with Sens. Sanders (I-VT), Heinrich (D-NM), Markey (D-MA), Whitehouse (D-RI), and Merkley (D-OR) today released a letter dated last Wednesday to Treasury Secretary Yellen and Climate Counselor Zindler calling on the Department to significantly increase the urgency with which it targets climate-related financial risk.

Daily092523.pdf…

19 09, 2023

DAILY091923

Eliza Allen2023-09-19T18:11:29-04:00September 19th, 2023|2- Daily Briefing|

FSB Finally Takes Concrete CCP-Resolution Action

Following longstanding announcements that it would advance CCP resolvability, the FSB today released a consultative report recommending a toolbox approach to CCP resolution providing sufficient loss absorption and liquidity that is readily available and mitigates adverse effects on financial stability.

Treasury Advances Climate-Risk Principles, Not Mandates

Cautiously advancing the President’s climate-risk order (see FSM Report GREEN8), Treasury today released nine nonbinding principles for net-zero financing and investment encouraging financial institutions to focus on limiting scope 3 emissions by implementing robust net-zero transition plans.

CFPB Expands AI Crackdown

Expanding on last year’s adverse action guidance (see FSM Report FAIRLEND11), the CFPB today issued a circular stating that lenders – especially those using AI – cannot use CFPB sample adverse actions forms and checklists to deny consumers credit if the samples do not accurately portray the reasoning behind the denial.

HFSC Republicans Expand Attack From Capital to LTD Rules

Today’s HFSC Financial Institutions Subcommittee hearing on the economic consequences of the banking agencies’ slate of recent proposals showcased strong Republican concerns.

Daily091923.pdf…

18 09, 2023

DAILY091823

Eliza Allen2023-09-18T16:46:46-04:00September 18th, 2023|2- Daily Briefing|

Dems Slam Fed Climate Scenarios

Sens. Markey (D-MA), Warren (D-MA), Sanders (I-VT) and eight additional Democratic Senators and House Members sent a letter to Chair Powell today demanding that the Fed ensures that the financial institutions it oversees properly address the threat of climate change. Claiming that the Fed’s climate pilot scenarios are not sufficiently rigorous, the letter demands that the Fed require banks to submit and execute plans to align their activities with climate targets, such as reducing financed emissions.

Top Treasury Official Sounds Big-Tech Payments Alarm

Treasury Assistant Secretary for Financial Institutions Graham Steele Friday warned that Big-Tech firms’ entry into financial services could result in increased market concentration and predatory pricing, highlighting their ability to leverage existing commercial relationships as well as network effects. Mr. Steele also named consumer-data rights and junk fees as top priorities, praising the CFPB’s actions on personal data (see FSM Report DATA3) and credit-card late fees (see FSM Report CREDITCARD36).

Daily091823.pdf…

15 09, 2023

DAILY091523

Eliza Allen2023-09-15T16:55:06-04:00September 15th, 2023|2- Daily Briefing|

Warren Adds Interest-Rate Risk to Fed Concerns

Heightening her attack on Fed interest-rate hikes, Sen. Warren (D-MA) yesterday pressed Treasury Secretary Yellen for FSOC action addressing interest-rate risks. Those she highlights include unrealized bond losses, CRE hazard, and challenges in the leveraged-loan market. Citing Moody’s recent credit downgrade of 10 regional banks, Ms. Warren voiced concern that interest rate risk still poses a systemic threat in these three areas and urged FSOC to act quickly to mitigate risk without suggesting specific actions.

Daily091523.pdf…