April 14, 2023

Federal Reserve Governor Michelle W. Bowman delivered remarks on the consequences of fewer banks in the U.S. banking system at the Wharton Financial Regulation Conference in Philadelphia, Pennsylvania.

Federal Reserve Governor Christopher J. Waller delivered remarks at the Graybar National Training Conference in San Antonio, Texas covering the economic outlook, including the recent failures of Silicon Valley Bank (SVB) and Signature Bank, and the extent that the stress in the banking system could weigh on economic activity.

The Washington Post held an event with Rohit Chopra, Director of the Consumer Financial Protection Bureau and Board Member of the Federal Deposit Insurance Corporation, about the current state of the banking industry, consumer deposit protection, and the future of financial regulation. Read our summary of the event here.

The Office of the Comptroller of the Currency (OCC) published the spring 2023 edition of the Interest Rate Risk Statistics Report. The report presents interest rate risk data gathered during examinations of OCC-supervised midsize and community banks and federal savings associations (collectively, banks). The report is available here.

The Commodity Futures Trading Commission (CFTC) filed a civil enforcement action in the U.S. District Court for the Eastern District of New York against New York resident Rashawn Russell. The CFTC’s complaint charges Russell with fraudulently soliciting retail investors to invest in a digital asset trading fund and with misappropriating at least $1 million in investor assets. Notably, the CFTC argues in the case that bitcoin, ether, and USDC are commodities.

The Chairman of the House Financial Services Committee, Patrick McHenry (R-NC), along with the Chairman of the Subcommittee on Oversight and Investigations, Bill Huizenga (R-MI), sent a letter to Securities and Exchange Commission (SEC) Chair Gary Gensler demanding that the SEC provide a staff recommendation memo and other information related to charges filed by the agency against FTX founder Sam Bankman-Fried. In the letter, the lawmakers state that compulsory measures could be taken to obtain the requested documents should the agency fail to fulfill their request. 

Chairman of the House Financial Services Committee Patrick McHenry (R-NC) and Chairman of the Subcommittee on Capital Markets, Ann Wagner (R-MO), sent a letter to SEC Chair Gary Gensler criticizing the SEC for ignoring its capital formation mission during his tenure, and requesting that the SEC revise its rulemaking agenda by pursuing reforms that strengthen public markets, expand opportunities for underrepresented entrepreneurs, and allow small businesses to grow.

Senate Majority Leader Chuck Schumer (D-NY) launched a framework to “advance and manage” artificial intelligence (AI). The framework “focuses on building a flexible and resilient AI policy framework across the federal government that can adapt as the technology continues to advance, allowing for innovation and continued U.S. leadership in the development of this critical technology, while enhancing security, accountability, and transparency.” Senator Schumer plans to refine the proposal with stakeholders in the coming weeks.

The U.S. Small Business Administration (SBA) is amending its business loan program regulations to lift the moratorium on licensing new Small Business Lending Companies (SBLCs) and add a new type of lending entity called a Community Advantage SBLC. SBA is also removing the requirement for a Loan Authorization in the 7(a) and 504 Loan Programs. The rule is effective May 12, 2023.

Travis Hill, Vice Chairman of the Federal Deposit Insurance Corporation (FDIC) delivered a speech entitled “Recent Bank Failures and the Path Ahead.” Vice Chairman Hill discussed interest rate risk, uninsured deposits, bank runs, resolutions, and S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act, the bipartisan banking law passed in 2018 that increases the threshold for enhanced supervision and prudential standards from $50 billion to $250 billion.

The Federal Reserve published an FAQ about FedNow, an instant payments service provided by the Federal Reserve, launching in July 2023. The FAQ states that FedNow is not related to a central bank digital currency.

New York Department of Financial Services (NYDFS) Superintendent Adrienne Harris said that last month’s closure of Signature Bank was because of problems with the bank’s liquidity, as opposed to the services it was providing to cryptocurrency companies. “The idea that the taking possession of Signature was about crypto and this is ‘Choke Point 2.0’ is really ludicrous,” Superintendent Harris said at the Links NYC conference hosted by blockchain analytics firm Chainalysis Inc.

Superintendent Harris also spoke more broadly about the cryptocurrency industry and stated that “there is still a lack of maturity around Bank Secrecy Act-anti-money-laundering [compliance] and cybersecurity,” but that the NYDFS is “eager for the day when those systems mature and scale as the business side does.”

Need to catch up on what happened last week? Check out our April 7th newsletter here.