April 5, 2024

House Energy and Commerce Chair Cathy McMorris Rodgers (R-WA) and Senate Commerce Chair Maria Cantwell (D-WA) have a deal on a bipartisan data privacy bill they plan to unveil next week, Punchbowl News reported. The proposal would create a national data privacy standard, replacing assorted state standards. Companies would face limits on what data they can collect and use. Another provision would allow individuals to sue “bad actors” for violating their privacy rights. There also would be new data security standards to hold companies accountable if data is hacked or stolen.

Senate Majority Leader Chuck Schumer (D-NY) highlighted the Senate’s policy priorities during the upcoming work period beginning next week. In a letter to Democratic colleagues, Schumer wrote that he seeks to “make progress” on several bipartisan bills that would expand the child tax credit, hold failed bank executives accountable, safeguard cannabis banking, and more.

Federal Deposit Insurance Corporation (FDIC) Chairman Martin Gruenberg delivered remarks at the National Community Reinvestment Coalition on the FDIC’s Economic Inclusion Strategy. Chairman Gruenberg discussed the importance of economic inclusion and the measures that the FDIC is taking to advance economic inclusion.

Office of the Comptroller of the Currency (OCC) Acting Comptroller Michael J. Hsu discussed the importance of fairness in remarks given at the National Community Reinvestment Coalition Just Economy Conference 2024. Acting Comptroller Hsu highlighted bank progress in overdraft protection program reforms since the OCC issued guidance last April and provided an update on Project REACh accomplishments regarding credit invisibles, minority depository institutions and affordable housing. Additionally, he discussed the importance of ensuring fairness as it relates to artificial intelligence and fraud.

The Consumer Financial Protection Bureau (CFPB) issued a report examining the growth of financial transactions in online video games and virtual worlds. The CFPB announced that it will be monitoring markets where financial products and services are offered, including video games and virtual worlds, to ensure compliance with federal consumer financial protection laws. Read CFPB Director Rohit Chopra’s statement here

The CFPB issued a report entitled Trends in Discount Points amid Rising Interest Rates. The report found that more borrowers paid “discount points” upfront as overall interest rates rose. The percentage of homebuyers paying discount points roughly doubled from 2021 to 2023. The increase was even greater among borrowers with lower credit scores. The Bureau stated that while discount points may provide advantages to some borrowers, the financial trade offs are complex. The CFPB is monitoring these increases and potential risks to consumers.

CFPB Director Rohit Chopra delivered remarks at the National Community Reinvestment Coalition. Director Chopra discussed the Bank Merger Act and the FDIC’s new proposed policy on bank merger review as it relates to serving the community.

The CFPB published their FY 2023 Office of Minority and Women Inclusion (OMWI) Report to Congress. The report includes sections on workforce diversity, workplace inclusion, supplier diversity, inclusion in business activities, and regulated entities.

CFPB Director Rohit Chopra stated that the CFPB will propose a rule restricting data brokers’ activities under the Fair Credit Reporting Act (FCRA) “in upcoming months,” Politico reported. The agency in September released a slate of proposals under consideration in its overhaul of FCRA rules, including applying the law to data brokers.

The Federal Reserve Board (FRB) issued enforcement actions with Mode Eleven Bancorp, Steele Bancshares, Inc., and American State Bank, related to, among other things, pursuit of fintech business strategies, board oversight, capital, earnings, liquidity, risk management, and compliance with rules related to affiliate transactions.

The Securities and Exchange Commission (SEC) announced charges against registered investment adviser Senvest Management LLC for widespread and longstanding failures to maintain and preserve certain electronic communications. The SEC also charged Senvest with failing to enforce its code of ethics. To settle this matter, Senvest admitted the facts set forth in the Commission’s order, acknowledged that its conduct violated the federal securities laws, and agreed to pay a $6.5 million penalty and to implement improvements to its compliance policies and procedures.

The American Bankers Association (ABA) sent a comment letter to the Financial Crimes Enforcement Network (FinCEN) regarding the agency’s existing information collection requirements related to currency transactions reports (CTRs) filed by financial institutions. The ABA stated  the current burden estimate underestimates the time and money banks  expend to meet the reporting requirements.

Securities and Exchange Commission (SEC) Chair Gary Gensler, Division of Enforcement Director Gurbir Grewal, Division of Enforcement Deputy Director Sanjay Wadhwa, and Commissioners Mark Uyeda and Hester Peirce delivered remarks at the SEC Speaks Conference. Speakers discussed the Commission’s Climate Rule, the materiality requirement for mandated disclosures, clearance and settlement, exchanges and alternative trading systems, the national market system, and SEC engagement with the public.

Division of Enforcement Director Grewal discussed cryptocurrency markets, asserting that the SEC has “clearly and consistently” applied the Howey test and its progeny to protect investors in the crypto space, and stating that the SEC has dealt with “a decade’s worth of verbal gymnastics that are just a backhanded way of saying, ‘we want a different set of rules than those that apply to everyone else,’” and “a decade’s worth of arguments that have served as nothing more than a distraction from the very real issues and risks that the crypto markets present for the investing public.”

Commissioner Peirce also addressed cryptocurrencies, calling Staff Accounting Bulletin (SAB) 121 and related guidance a “pernicious weed” in what she refers to as the SEC’s “secret garden” – the maze of staff guidance that serves to define practices across the securities industry in a way that may be inconsistent with a plain reading of the rulebook. Commissioner Peirce further stated that the SEC’s enforcement actions regarding cryptocurrencies are scaring people off from meeting with the SEC, and that the SEC’s “announcement of a large ramp-up in its cyber- and crypto-enforcement unit, repeated assertions that the crypto industry is lawless, and treatment of cyber-incidents as fertile ground for enforcement actions add to these fears.”

Need to catch up on what happened earlier this week? Check out our April 3rd Midweek Update here