- Top Lines
The House of Representatives voted 221-202 to nullify via a Congressional Review Act resolution the Consumer Financial Protection Bureau’s small business data collection rule requiring lenders to report demographic data on small business loan recipients (Section 1071 of the Dodd-Frank Act). The White House has threatened to veto the resolution that would block the regulation. Six House Democrats joined with Republicans to pass the rollback. In October, the Senate passed the resolution in a 53-44 vote.
- End of Week Wrap Up
Federal Reserve Board (FRB or Fed) Chair Jerome Powell delivered opening remarks at a Fireside Chat at Spelman College. Chair Powell discussed the Federal Reserve’s actions to promote a healthy economy, and how those actions relate to questions students may be asking about the future.
FRB Vice Chair for Supervision Michael Barr delivered remarks on the importance of effective liquidity risk management at the ECB Forum on Banking Supervision. Vice Chair for Supervision Barr discussed liquidity risk management and operational readiness for firms in the United States to utilize the Federal Reserve’s discount window.
The Consumer Financial Protection Bureau (CFPB) published a report from the 2023 Making Ends Meet survey. The report found that pandemic relief improved many consumers’ finances in 2020 and 2021, but in 2022 financial stability and health deteriorated across a range of measures. In 2023, consumers were still on average somewhat better off financially than they were in 2019 but the trend is negative.
The CFPB Ombudsman Office published their 2023 Annual Report to the Director.
The CFPB submitted input on a proposal by the California Department of Financial Protection and Innovation to undertake registration and examinations of companies that provide what the proposal refers to as “income-based advances.” The CFPB’s letter explains states’ critical role in oversight of providers of consumer financial products and services.
The Office of the Comptroller of the Currency (OCC) released a list of Community Reinvestment Act (CRA) performance evaluations that became public during the period of November 1, 2023, through November 30, 2023. Of the 42 evaluations made public this month, 29 are rated satisfactory, and 13 are rated outstanding.
The Federal Deposit Insurance Corporation (FDIC) issued the lists of institutions scheduled for CRA examination during the first quarter 2024 and second quarter 2024. CRA regulations require each federal bank and thrift regulator to publish its quarterly CRA examination schedule at least 30 days before the beginning of each quarter.
The FDIC is is notifying FDIC-supervised financial institutions (banks) that the Office of the Ombudsman, which is responsible for administering the Post-Examination Surveys (Survey), is updating the Survey and the transmission process for Risk Management and Compliance and/or CRA examination. The updated Survey solicits additional feedback on the virtual aspects of examinations.
The FDIC released their Third Quarter 2023 Quarterly Banking Profile. The profile found that net income decreased From the prior quarter, driven by lower noninterest income and higher realized losses on securities; the net interest margin increased from the prior quarter to 3.30 Percent; unrealized losses on securities increased from the prior quarter; community banks reported lower net income from the prior quarter; loan balances increased from last quarter and one year ago; total deposits declined for a sixth consecutive quarter; asset quality metrics remained favorable despite modest deterioration; and the deposit insurance fund reserve ratio rose to 1.13 percent.
FDIC Chairman Martin Gruenberg also delivered remarks on the profile.
Commodity Futures Trading Commission (CFTC) Commissioner Kristin Johnson gave a speech at the Blockchain Association’s Policy Summit in which she discussed the CFTC’s mission in policing digital asset markets for fraud and manipulation, pursuing enforcement actions for lack of compliance with registration requirements, corporate governance and risk management protocols, and the CFTC’s enforcement agenda. Notably, she shared, 49% of all of the enforcement actions alleging fraud involved transactions in digital asset markets last year, and the total number of crypto-fraud cases initiated by the Commission is almost five times higher than what it was three years ago.
- ICYMI
The U.S. Department of the Treasury (Treasury) is proposing establishing a new crypto-related category of “financial institution” under the Bank Secrecy Act that would subject exchanges, token trading platforms, wallet providers, DeFi and certain blockchain validators to rules designed to counter money laundering and terrorist financing.
Treasury is also requesting explicit authority under its sanctions regime to designate nodes and individual blockchain networks, and wants a tailored, secondary sanctions tool that would allow it to sever fintech and crypto operators from U.S. relationships without placing a full stop on their other activity. Treasury is further requesting that the Office of Foreign Assets Control (OFAC) receive jurisdiction over dollar-denominated stablecoins.
Two other legislative proposals included in the term sheet would extend Treasury’s authority under the BSA and the International Emergency Economic Powers Act to foreign entities with defined “U.S. touchpoints.”
Deputy Secretary of the Treasury Wally Adeyemo delivered remarks at the 2023 Blockchain Association’s Policy Summit and elaborated on Treasury’s proposals. In his remarks, he called on industry to build new tools that help prevent money laundering while continuing to provide legitimate protections to individuals and cutting off firms that are failing to take steps to prevent illicit finance.
Need to catch up on what happened earlier this week? Check out our November 29 Midweek Update here.