- Top Lines
Senator Elizabeth Warren (D-MA) sent a letter to Secretary of the Treasury Janet Yellen, urging that any new cryptocurrency legislation must incorporate comprehensive anti-money laundering (AML) protections as specified by the Treasury Department in their November 2023 communication to Congress. In the letter, Senator Warren expressed concerns over the potential national security risks posed by cryptocurrencies, particularly highlighting the use of such technologies by Iran and Hamas to finance terrorist activities. She stressed the importance of including all of Treasury’s requested AML tools in forthcoming legislation aimed at regulating the stablecoin market, valued at $157 billion. Warren also pointed out the need for AML/CFT requirements to cover all parts of the digital asset ecosystem, including payment intermediaries like miners and validators. Additionally, she emphasized that neglecting these measures could allow malicious entities to exploit the growing crypto market, increasing risks associated with terrorist financing and other illegal activities.
The letter coincides with increased conversation around stablecoin legislation possibly moving on Capitol Hill, including the introduction, today, of legislation from Sens. Lummis (R-WY) and Gillbrand (D-NY). A summary is available here.
- Midweek Update
The ringleader of a student loan debt relief scam will be permanently banned from the debt relief industry and is required to turn over assets as part of a settlement with the Federal Trade Commission (FTC). The settlement with Marco Manzi resolves FTC charges involving the student loan debt relief scheme. The FTC said that Apex operators pocketed approximately $8.8 million in junk fees by luring students with false promises of loan forgiveness.
The Consumer Financial Protection Bureau (CFPB) issued a procedural rule to update how the agency designates a nonbank for supervision. The updates are intended to streamline the designation proceedings for both the CFPB and nonbanks.
The CFPB wrote a letter to the Connecticut state legislature regarding Senate Bill 395 as amended (SB395), which would prohibit health care providers in Connecticut from reporting medical debt to consumer reporting agencies for use in a consumer report. The CFPB commended the state’s work to protect consumers against the harms of medical debt reporting.
The CFPB issued an order against BloomTech and its CEO, Austen Allred, for deceiving students about the cost of loans and making false claims about graduates’ hiring rates. The order permanently bans BloomTech from all consumer-lending activities and bans Allred from any student-lending activities for ten years. The CFPB is also ordering BloomTech and Allred to cease collecting payments on income share loans for graduates who did not have a qualifying job, eliminate finance changes for certain agreements, and allow students the option to withdraw without penalty. BloomTech and Allred must also pay over $164,000 in civil penalties, which will be deposited in the CFPB’s victims relief fund.
The Securities and Exchange Commission (SEC) announced that, starting on May 22, 2024, the fee rates applicable to most securities transactions will be set at $27.80 per million dollars. Consequently, each self-regulatory organization will continue to pay the Commission a rate of $8 per million for covered sales occurring on charge dates through May 21, 2024, and a rate of $27.80 per million for covered sales occurring on charge dates on or after May 22, 2024.
SEC Chair Gary Gensler delivered remarks before the 2024 43rd Annual Small Business Forum. Chair Gensler discussed the work that the SEC is doing to help small businesses and investors. SEC Office of the Advocate for Small Business Capital Formation Director Stacey Bowers also delivered remarks at the forum.
SEC Division of Enforcement Director Gurbir Grewal delivered remarks at the Program on Corporate Compliance and Enforcement Spring Conference 2024. Director Grewal discussed what has been learned about compliance over the last decade and how to leverage those lessons to effect better compliance in the future.
The House of Representatives passed four pieces of bipartisan financial services legislation intended to hold Iran accountable for acts of international aggression and financing of terrorism. The bills include H.R. 5923, the “Iran-China Energy Sanctions Act of 2023,” H.R. 5921, the “No U.S. Financing for Iran Act of 2023,” H.R. 6245, the “Holding Iranian Leaders Accountable Act,” and H.R. 6015, the “Iran Sanctions Accountability Act of 2023.”
Senate Banking Committee Ranking Member Tim Scott (R-SC) and fellow member of the Senate Banking Committee, Senator Jack Reed (D-RI), are leading a resolution to declare April 2024 as Financial Literacy Month. The senators are co-chairs of the Financial Literacy Caucus.
Sen. Tim Scott issued a statement praising the House of Representatives’ passage of his Solidify Iran Sanctions Act (SISA). The bill, if signed into law, would cement sanctions that restrict funding for Iran’s energy and weapons sectors, thereby curtailing the regime’s ability to finance terrorism and develop its nuclear program.
Bank of England Deputy Governor for Financial Stability Sarah Breeden delivered a speech entitled “Modernising the trains and rails of UK payments” at the Innovate Finance Global Summit 2024. Deputy Governor Breeden discussed how the Bank of England seeks to deliver trust and support innovation, both as a provider and as a regulator of retail and wholesale money. She also discussed the first-order threats and opportunities facing central banks and the private sector.
- ICYMI
President Biden announced $7.4 billion in student debt cancellation for 277,000 more borrowers. The 277,000 borrowers are enrolled in the Administration’s SAVE Plan, or were approved for relief because of fixes to Income-Driven Repayment Plans and Public Service Loan Forgiveness.
Need to catch up on what happened last week? Check out our April 12th End of Week Wrap Up here.