#Warren – Federal Financial Analytics

30 03, 2023

DAILY033023

Eliza Allen2023-03-30T17:27:30-04:00March 30th, 2023|2- Daily Briefing|

Yellen Calls for Bank, Nonbank Regulatory Rewrite

Implicitly confirming press reports that the White House will soon press for tougher bank rules, Treasury Secretary Yellen today said that, as beneficial as the rules imposed since the great financial crisis have been, more stringent standards are necessary.

Hsu Sets Dual OCC Mission: Safety, Fairness

In remarks today, Acting Comptroller Hsu emphatically echoed statements of other top regulators that the banking system is safe and sound, emphasizing that the OCC is monitoring the market and is prepared to use its tools to protect the system.

Basel Updates Global Liquidity, Operational Standards

Although the U.S. has still not even proposed the Basel IV “end-game” standards, the Basel Committee continues to refine them and today issued its latest set of FAQs.

White House Sets Reg-Reform Agenda

As anticipated early this morning, the White House has issued a statement calling on federal banking agencies to roll back rules the President describes as weakening “common-sense bank safety and supervision.”

Senate Dems Press Agencies to Strengthen Capital Rules

Following this week’s hearings (see Client Report REFORM218), Sens. Warren (D-MA), Blumenthal (D-CT), and Duckworth (D-IL) sent a letter to Vice Chair Barr, Chairman Gruenberg, and Acting Comptroller Hsu urging them to strengthen large-bank capital requirements.

CFPB Stands By Its Small-Business Reporting Rules

Despite strong industry and GOP opposition, the CFPB today finalized its small business data collection rulemaking in a sweeping final rule the Bureau says will increase transparency in small business lending, promote economic …

29 03, 2023

DAILY032923

Eliza Allen2023-03-29T17:30:21-04:00March 29th, 2023|2- Daily Briefing|

Barr Keeps CRA Hope Alive

Ahead of what is certainly going to be a trying HFSC hearing later today, FRB Vice Chairman Barr told an audience that pending CRA rules (see FSM Report CRA32) are still in the works, declining to provide any completion timeline.

Chopra Expands Post-SVB Policy Action Items

In remarks posted after a panel discussion yesterday, CFPB director and FDIC board member Rohit Chopra reaffirmed Chairman Gruenberg’s comments that changes are likely to capital and liquidity rules, but added action related to interest-rate risk management, resolution planning and stress-testing to the to-do list.

Senate Finance Dems Demand Tougher Penalties, Enforcement to Prevent Swiss Tax-Evasion Activities

Senate Finance Democrats today released a damning investigative report accusing Credit Suisse of persistently and often criminally enabling U.S. tax evasion despite a 2014 plea agreement with the U.S. Chairman Wyden (D-OR) presses for additional civil and criminal actions, noting that the UBS acquisition does not “wipe the slate clean.”

Bipartisan Senate Clawback Bill Reaches to BHC Investors, Creditors

Preempting Chairman Brown’s plans to introduce clawback legislation (see Client Report REFORM217), Sens. Warren (D-MA), Cortez Masto (D-NV), Hawley (R-MO), and Braun (R-IN) today introduced their own bill to do so.

CFPB Sets Comment Deadline For Controversial Credit Card Proposal

The Federal Register today includes the CFPB’s proposed rule on Credit Card Penalty Fees.

Daily032923.pdf…

27 03, 2023

M032723

Eliza Allen2023-03-27T10:27:26-04:00March 27th, 2023|6- Client Memo|

Another SVB Casualty: U.S. Biomedical Research

As seems always the case when fear has the banking system in its maw, myths have proliferated that are now also magnified and amplified by viral social media. One such myth about Silicon Valley Bank has it that most of its depositors were high-wealth, high-tech folk whom the government should never bail out. In fact, many depositors had no choice but to park all their funds at SVB, a more-then-dubious practice at the bank that almost brought biomedical research to its knees. Had these depositors been forced to bear losses, treatments and cures for life-threatening and-changing diseases would have stalled, likely for years. We need not only to prevent future researchers from being put at such risk by a single bank, but also to change the biomedical-funding model from one at the mercy of high-cost equity investors to a stable sector for which lower-cost debt is readily at hand for any researcher with demonstrable ability to repay. Think what debt funding did for sustainable energy via green bonds and you’ll see what a like-kind model for “biobonds” could do to speed urgently-needed treatments and cures.

M032723.pdf…

27 03, 2023

Karen Petrou: Another SVB Casualty: U.S. Biomedical Research

Eliza Allen2023-03-27T10:27:35-04:00March 27th, 2023|The Vault|

As seems always the case when fear has the banking system in its maw, myths have proliferated that are now also magnified and amplified by viral social media. One such myth about Silicon Valley Bank has it that most of its depositors were high-wealth, high-tech folk whom the government should never bail out. In fact, many depositors had no choice but to park all their funds at SVB, a more-then-dubious practice at the bank that almost brought biomedical research to its knees. Had these depositors been forced to bear losses, treatments and cures for life-threatening and-changing diseases would have stalled, likely for years. We need not only to prevent future researchers from being put at such risk by a single bank, but also to change the biomedical-funding model from one at the mercy of high-cost equity investors to a stable sector for which lower-cost debt is readily at hand for any researcher with demonstrable ability to repay. Think what debt funding did for sustainable energy via green bonds and you’ll see what a like-kind model for “biobonds” could do to speed urgently-needed treatments and cures.

The link between SVB and biomedical research is not the stuff of moral-hazard myth, but rather a complex tale of a specialized institution serving a sector that came to hold unique sway over a vital public good: lengthening life and easing suffering. Providing banking services to venture capital (VC) is a high-risk business unless a financial institution devotes expensive intellectual capital to the sector and …

22 03, 2023

DAILY032223

Eliza Allen2023-03-22T17:37:57-04:00March 22nd, 2023|2- Daily Briefing|

FTC Builds On Treasury Cloud Concerns, Seeks Competition, AI Views

Signaling apprehension about a number of risks outlined in a recent Treasury report, the FTC today requested comment on the business practices of cloud computing providers.

Scott, Warren Reach Over Partisan, Ideological Divide to Blast the Fed

Demonstrating the confluence of populist and progressive thinking about the Fed we anticipated at the start of this year, Sens. Rick Scott (R-FL) and Warren (D-MA) have introduced legislation mandating that the Fed’s inspector general be fully independent of the chair and board of governors.

Fed Under Still More Pressure to Boost Regional-Bank Supervision

Sen. Warren (D-MA) continued her prolific letter-writing campaign, today also joining with Sens. Duckworth (D-IL), Blumenthal (D-CT), Sanders (I-VT), Reed (D-RI), Hirono (D-HI), Markey (D-MA), King (I-ME), Whitehouse (D-RI), Smith (D-MN), Van Hollen (D-MD), and Schatz (D-HI) to call upon Vice Chairman Barr quickly to heighten regulatory standards for banking organizations between $100 and $250 billion.

Powell Protests Suggestions Of Fed Supervisory Error

At his press conference today, Chairman Powell sought to defend the Fed so vigorously that some of his comments may ignite still more criticism.

Yellen Denies FDIC-Coverage Rewrite, Suggests Need for Liquidity-Rule Revisions

In her appearance today before the Senate Appropriations Subcommittee on Financial Services and General Government, Treasury Secretary Yellen refuted press reports that Treasury is considering significant deposit-insurance coverage expansion, saying only that the banking system is safe and it is too soon to consider structural reforms.

Daily032223.pdf…

20 03, 2023

DAILY032023

Eliza Allen2023-03-20T17:07:20-04:00March 20th, 2023|2- Daily Briefing|

HFSC Sets Plan For Crisis Review

In what may be an effort to buy some time as the banking crisis hopefully eases and tempers cool, HFSC Chairman McHenry (R-NC) and Ranking Member Waters (D-CA) late Friday asked GAO to conduct an immediate review of recent bank failures, insider actions, and related policy actions such as the March 12 systemic rescue and new Fed facility.

Warren Piles On To Powell With New IG Study

Sen. Warren (D-MA) in a letter Saturday applied even more pressure on the banking agencies by urging the Fed’s, FDIC’s, and Treasury’s IGs to conduct independent investigations of the bank as well as “regulatory and supervisory problems” leading to failures, renewing claims that Chair Powell is especially culpable.

McHenry, Scott Take Gloves Off For Fed, FDIC Investigation

HFSC Chairman McHenry (R-NC) and Ranking Senate Banking Member Scott (R-SC) today sent letters to Chair Powell and Chair Gruenberg, making it clear that – for all Mr. McHenry’s more conciliatory statements – Republicans are launching an investigation premised on potential missteps by the Fed and/or FDIC warranting rapid remediation.

House GOP Conservatives Oppose Liberalized FDIC-Coverage Ceiling

Countering demands for an end to FDIC insurance ceilings not only from Sen. Warren (D-MA), but also from their GOP peers, the very conservative House Freedom Caucus today released a statement demanding an end to what it calls “big government bailouts.”

Daily032023.pdf…

17 03, 2023

FedFin Assessment: Future of U.S. Bank Capital, Liquidity, Structural Regulation

Eliza Allen2023-03-17T16:50:38-04:00March 17th, 2023|The Vault|

In this report, we continue our policy postmortem of SVB/SBNY and, now, so much more. Prior reports have assessed the overall political context (see Client Report RESOLVE49) and likely changes to FDIC insurance (see Client Report DEPOSITINSURANCE118), with a forthcoming Petrou op-ed in Barron’s focusing on specific ways to reform federal deposit insurance to protect only the innocent. In this report, we look at some key regulatory changes likely as the banking agencies reevaluate the regional-bank capital, liquidity, and the IDI/BHC construct. As noted in our initial assessment and thereafter, we do not expect meaningful legislative action on the Warren, et. al. bill to repeal “tailoring” requirements, but we do expect bipartisan political pressure not just for supervisory accountability (see another forthcoming report), but also regulatory revisions.

The full report is available to retainer clients. To find out how you can sign up for the service, click here and here.…

17 03, 2023

REFORM216

Eliza Allen2023-03-17T14:27:00-04:00March 17th, 2023|5- Client Report|

FedFin Assessment: Future of U.S. Bank Capital, Liquidity, Structural Regulation

In this report, we continue our policy postmortem of SVB/SBNY and, now, so much more. Prior reports have assessed the overall political context (see Client Report RESOLVE49) and likely changes to FDIC insurance (see Client Report DEPOSITINSURANCE118), with a forthcoming Petrou op-ed in Barron’s focusing on specific ways to reform federal deposit insurance to protect only the innocent. In this report, we look at some key regulatory changes likely as the banking agencies reevaluate the regional-bank capital, liquidity, and the IDI/BHC construct. As noted in our initial assessment and thereafter, we do not expect meaningful legislative action on the Warren, et. al. bill to repeal “tailoring” requirements, but we do expect bipartisan political pressure not just for supervisory accountability (see another forthcoming report), but also regulatory revisions. While Republicans strongly opposed tougher capital rules when Chairman Powell appeared before them just last week (see Client Report FEDERALRESERVE73), we expect them now only to make token statements of concern about any changes that do not adversely affect smaller banking organizations. In addition to looking at specific regulatory rewrites, this report assesses timing, noting in particular how the pending end-game rules could serve as the vehicle for changes the agencies hope to muster quickly in order to minimize demands for structural change to their own powers.

REFORM216.pdf…

16 03, 2023

DAILY031623

Eliza Allen2023-03-16T17:11:59-04:00March 16th, 2023|2- Daily Briefing|

FedFin Assessment: One CS Consequence – LISCC Reinstatement For All Large Foreign GSIBs

In the wake of CS’s distress, we draw client attention to a 2021 exchange sure to factor heavily in the political response.

Brown Presses For In-Depth SVB, Signature Review

As anticipated (see Client Report RESOLVE49), Senate Banking Chairman Brown (D-OH) today called on all the banking agencies and Treasury quickly to undertake a review of SVB and Signatures failures.

Warren Heaps Still More Blame On Powell

In another letter today, Sen. Warren (D-MA) once again lambasted Chair Powell for what she claimed was his direct contribution to the collapse of Signature Bank and SVB as well as a “a culture of corruption” at the Fed.

Senate GOP Blames Fed, California re SVB

Senate Banking Republicans today tweeted a series of comments citing articles going back to last year identifying SVB risk and suggesting strongly that the Fed and California state supervisors are at fault for missing clear warning signs.

Bipartisan Senators Push Better Beneficial-Ownership Data Access

Senate Budget Committee Chairman Whitehouse (D-RI) was joined by Sens. Wyden (D-OR), Warren (D-MA), Grassley (R-IA), and Rubio (R-FL) late yesterday in submitting a comment letter to FinCEN taking serious issue with its proposed implementation of the Corporate Transparency Act (CTA) (see FSM Report AML135).

Senate Finance Hearing Deepens SVB Divide

At a heated Senate Finance hearing with Treasury Secretary Yellen, Members were quick to deviate from the hearing’s budget-focused agenda to address who should bear the …

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 …