The Federal Reserve Board provided additional information on its program to supervise novel activities in the banks it oversees. Novel activities include complex, technology-driven partnerships with non-banks to provide banking services to customers and activities that involve crypto assets and distributed ledger technology. The Board also provided additional information on the process for a state bank supervised by the Federal Reserve to follow before engaging in certain dollar token or stablecoin activity, including demonstrating to its Federal Reserve supervisors that it has appropriate safeguards to conduct the activity safely and soundly.
Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson and Acting Director of the Financial Crimes Enforcement Network (FinCEN) Himamauli Das traveled to Lexington, Kentucky to join Representative Andy Barr (R-KY), Chairman of the House Subcommittee on Financial Institutions and Monetary Policy, for a discussion on Treasury’s illicit finance priorities with small businesses, financial institutions, and local law enforcement.
The Office of the Comptroller of the Currency (OCC) issued a bulletin to provide banks with guidance regarding the applicability of the legal lending limit (LLL) to purchased loans.
The Securities and Exchange Commission (SEC) announced charges against 10 firms in their capacity as broker-dealers and one dually registered broker-dealer and investment adviser for widespread and longstanding failures by the firms and their employees to maintain and preserve electronic communications. The firms acknowledged that their conduct violated recordkeeping provisions of the federal securities laws and agreed to pay combined penalties of $289 million. Separately, the Commodity Futures Trading Commission (CFTC) announced settlements with Wells Fargo, BNP Paribas, Société Générale, Bank of Montreal, and Wedbush Securities Inc., for related conduct.
The SEC announced settled charges against Theorem Fund Services LLC, a fund administrator, for failing to respond to red flags relating to a fraud against a private fund and its investors involving the misappropriation and misuse of investors’ funds over a five-year period.
Senate Committee on Banking, Housing, and Urban Affairs Chair Sherrod Brown, alongside Sen. Elizabeth Warren (D-MA), Sen. Jack Reed (D-RI), and Sen. John Fetterman (D-PA), sent a letter to Fed Chair Jerome Powell and Vice Chair for Supervision Michael Barr, urging them to heighten scrutiny of bank mergers that could affect the stability of the financial system. The letter states that the multiple bank failures earlier this year highlight the need to examine the dangers of larger lenders getting even bigger.
Congressman Patrick McHenry (R-NC), Chairman of the House Financial Services Committee, issued a statement on PayPal’s announcement regarding the launch of its payment stablecoin, characterizing stablecoins, if they are issued under a clear regulatory framework, as an important part of the payments system. Congresswoman Maxine Waters (D-CA), Ranking Member of the House Financial Services Committee, also issued a statement on the announcement expressing concern that PayPal launched its stablecoin while there is still no federal regulatory framework.
Congresswoman Maxine Waters sent a letter to the CEOs of the nation’s Fortune 100 financial services companies urging them to continue their diversity and inclusion practices. Congresswoman Waters also addressed pressure from Republican Attorneys General to divest from these practices in a recently released statement.
Vice President Kamala Harris announced the initial awardees under the Minority Business Development Agency (MBDA) Capital Readiness Program (CRP) – a technical assistance program funded by the U.S. Department of the Treasury’s State Small Business Credit Initiative (SSBCI). The Treasury Department has increased its previously announced support for the CRP, to a total of $125 million in SSBCI funding.
Need to catch up on what happened last week? Check out our End of Week Wrap Up here.