This month marks the five year anniversary of FS Vector! Read a note from our Co-Founder and CEO John Beccia here.
The Department of the Treasury, as Chair of the Committee on Foreign Investment in the United States (CFIUS), released its Annual Report to Congress for calendar year 2022. The Annual Report highlights key indicators of the CFIUS process and provides statistics on transactions that were filed with the Committee in 2022. Read the report here.
Fitch Ratings downgraded the U.S. government’s credit rating, citing debt-limit political standoffs, projections that the general government debt will rise, and interest rate hikes. Treasury Secretary Janet Yellen’s statement criticizing the decision can be found here. White House Press Secretary Karine Jean-Pierre’s statement can be found here.
The Federal Financial Institutions Examination Council (FFIEC) updated the following sections of the FFIEC Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual:
“Special Information Sharing Procedures to Deter Money Laundering and Terrorist Activity”
“Due Diligence Programs for Correspondent Accounts for Foreign Financial Institutions”
“Due Diligence Programs for Private Banking Accounts”
“Prohibition on Correspondent Accounts for Foreign Shell Banks; Records Concerning Owners of Foreign Banks and Agents for Services of Legal Process”
“Summons or Subpoena of Foreign Bank Records; Termination of Correspondent Relationship; Records Concerning Owners of Foreign Banks and Agents for Service of Legal Process”
“Reporting Obligations on Foreign Bank Relationships With Iranian-Linked Financial Institutions”
These updates reflect the Office of the Comptroller of the Currency (OCC)’s continued commitment to, and leadership on, interagency reform efforts that improve the effectiveness and efficiency of the BSA/AML regime and reduce unnecessary burden on banks.
The OCC released a list of Community Reinvestment Act (CRA) performance evaluations that became public during the period of July 1, 2023, through July 31, 2023. Of the 27 evaluations made public this month, 15 are rated satisfactory, ten are rated outstanding, and two needs to improve.
A federal court in Texas suspended enforcement of the Consumer Financial Protection Bureau’s (CFPB) small business data reporting rule for members of the American Bankers Association. The ABA, the Texas Bankers Association, and Rio Bank won a limited injunction after suing to block the rule until the Supreme Court resolves a case challenging the CFPB’s funding structure. The high court will hear arguments in that case in October, with a ruling expected next spring.
The Federal Trade Commission (FTC) proposed a rule defining conduct that, in the context of consumer reviews or testimonials, constitutes unfair or deceptive acts or practices.
The Securities and Exchange Commission (SEC) charged Richard Heart (aka Richard Schueler) and three unincorporated entities that he controls, Hex, PulseChain, and PulseX, with conducting unregistered offerings of crypto asset securities that raised more than $1 billion in crypto assets from investors. The SEC also charged Heart and PulseChain with fraud for misappropriating at least $12 million of offering proceeds to purchase luxury goods.
In SEC v. Terraform Labs, the Southern District of New York denied Terraform Labs’ motion to dismiss the SEC’s enforcement action alleging that Terraform Labs, the developers of the US Terra stablecoin and its reference asset LUNA that decoupled last year, and its founder, Do Kwon, defrauded investors and sold digital assets in unregistered securities offerings. The court disagreed with the interpretation of the Howey test in the recent SEC v. Ripple Labs ruling and declined to draw, in this case, a distinction based on whether the digital assets were sold directly to institutional investors or on the secondary market based on statements made by Terraform Labs regarding the sale of all of the digital assets (as opposed to those made only to institutional investors or retail investors).
The IRS released guidance on cryptoasset staking. In summary, if people earn assets through staking, the value should be included in their gross income in the year in which they gain the ability to transfer, sell, exchange, or otherwise dispose of the cryptoasset.
Reps. Gus Bilirakis (R-FL) and Jan Schakowsky (D-IL) sent a letter to Apple CEO Tim Cook sharing concerns that Apple may be using its App Store Guidelines to restrict emerging technologies like blockchains, nonfungible tokens (NFTs), and other distributed ledger technologies.
Sens. Elizabeth Warren (D-MA), Bernie Sanders (I-VT), Bob Casey (D-PA), and Richard Blumenthal (D-CT) sent a letter to the Treasury and IRS regarding the issuance and finalization of regulations implementing new reporting requirements for digital asset brokers, as mandated by the Infrastructure Investment and Jobs Act (IIJA).
The House Committee on Small Business convened for a hearing titled “Rural Entrepreneurship: Examining the Challenges and State of Rural Small Businesses.” At the hearing, members examined the challenges rural entrepreneurs are facing.
The Financial Stability Oversight Council (FSOC), during the executive session, heard a presentation from staff from the Treasury, Federal Housing Finance Agency, and Ginnie Mae regarding efforts to address financial stability risks related to nonbank mortgage servicers. Treasury and Office of the Comptroller of the Currency (OCC) staff also informed the FSOC on the Climate-related Financial Risk Committee’s work, including ongoing interagency efforts to identify and monitor financial system vulnerabilities and deepen Council members’ understanding of climate-related financial risks. The Climate-related Financial Risk Committee (CFRC) issued a staff progress report on a range of actions underway to support capacity building and disclosure, address data gaps, and assess climate-related financial risks. The Council also discussed current conditions in the banking sector and heard an update from staff from the Board of Governors of the Federal Reserve System on the results of the 2023 bank stress tests.
Need to catch up on what happened last week? Check out our July 28th newsletter here.