April 15, 2022

The Biden Administration is planning to nominate Michael Barr, Dean of the Ford School of Public Policy at the University of Michigan, for Vice Chair for Supervision of the Board of Governors of the Federal Reserve System Michael Barr. Mr. Barr previously served in the Obama Administration in 2009-2010 as Assistant Secretary for Financial Institutions in the Department of the Treasury, where he served as a key architect of the Dodd-Frank Wall Street REform and Consumer Protection Act of 2010. He has served in a wide variety of advisory roles, including fintech companies. 

The CFPB published a blog post targeting non-sufficient fund (NSF) fees on checking accounts. Director Chopra also again Tweeted out a video describing the hidden costs of  ‘junk fees.’ The blog includes a chart of banks who “do not charge NSF fees or have publicly announced their elimination” and “identifies the banks that have not publicly announced elimination of NSF fees.”

The Congressional Research Service issued a report on blockchain technology and the potential role of Congress in its development and regulation. The full report is attached with the conclusion pasted below. Of note, there is a focus on the question of whether current privacy laws are adequate to address new uses within blockchain-driven technologies and applications. Appendix A includes a list of selected legislation and hearings. 

The Bank for International Settlements (BIS) released a series of papers on central bank digital currencies (CBDCs) that show that central banks in emerging market economies are primarily motivated to consider or issue a potential CBDC for payment system efficiency.

Acting Comptroller of the Currency Michael Hsu delivered remarks and participated in a fireside chat on Friday, April 8, at the Georgetown Law School’s Institute of International Economic Law (IIEL) on issues related to stablecoins and financial stability, interoperability, and separability. 

Key Takeaways:

  • Getting the policy right on stablecoins is important because of the implications for consumers and the financial system and the role of the U.S. dollar. 

  • Acting Comptroller Hsu repeated his concerns of stablecoins potentially sparking a crisis within the interconnected financial system, similar to derivatives in the 2008 financial crisis, and the potential for bank runs on stablecoin issuers.

  • Lack of interoperability among dollar-denominated stablecoins could lead to increased fragmentation and walled gardens that prevent openness and inclusion. 

  • As traditional finance commingles with stablecoins, the architecture for stablecoins in the financial system must be deliberate to protect consumers and the role of the dollar while mitigating against potential risk, such as liquidity risk.

Read our event summary here

Wednesday, April 27 2022 at 10:00AM EST: The U.S. House Committee on Financial Services will hold a hearing entitled “Consumers First: Semi-Annual Report of the Consumer Financial Protection Bureau.”

Thursday, April 28 2022 at 10:00AM EST: The U.S. House Committee on Financial Services Task Force on Financial Technology will hold a hearing entitled “What’s in Your Digital Wallet? A Review of Recent Trends to Mobile Banking and Payments.” 

Thursday, April 28 2022 at 2:00PM EST: The U.S. House Committee on Financial Services will hold a hearing entitled “Oversight of the Financial Crimes Enforcement Network.”