December 20, 2023

Please note we are taking a break from publishing our newsletter over the next couple of weeks and look forward to resuming in early January. 

Happy Holidays from the FSV Team!

Senate Majority Leader Chuck Schumer (D-NY) and Republican Leader Mitch McConnell (R-KY) released a statement regarding supplemental national security legislation, stating:

“Bipartisan border security negotiations are essential to the Senate’s efforts to address critical national security priorities. Our colleagues are making encouraging progress on this front. Challenging issues remain, but we are committed to addressing needs at the southern border and to helping allies and partners confront serious threats in Israel, Ukraine and the Indo-Pacific. The Senate will not let these national security challenges go unanswered. As negotiators work through remaining issues, it is our hope that their efforts will allow the Senate to take swift action on the national security supplemental early in the new year. In the time remaining this year, Senate and Administration negotiators will continue to work in good faith toward finalizing their agreement.”

The Justice Department and the Federal Trade Commission (FTC) jointly issued the 2023 Merger Guidelines, which describe factors and frameworks the agencies must utilize when reviewing mergers and acquisitions. The 2023 Merger Guidelines are the culmination of a nearly two-year process of public engagement and reflect modern market realities, advances in economics and law, and the lived experiences of a diverse array of market participants.

The Justice Department and the Consumer Financial Protection Bureau (CFPB) sued Colony Ridge, a Texas-based developer and lender, for operating an illegal land sales scheme and targeting tens of thousands of Hispanic borrowers with false statements and predatory loans. The lawsuit alleges Colony Ridge sells unsuspecting families flood-prone land without water, sewer, or electrical infrastructure, and the company sets borrowers up to fail with loans they cannot afford. The CFPB and Justice Department are seeking redress for borrowers harmed by Colony Ridge and an immediate end to its illegal practices. This is the CFPB’s first lawsuit charging a defendant with violations of the Interstate Land Sales Full Disclosure Act.

The Office of the Comptroller of the Currency (OCC) assessed a $15 million civil money penalty against U.S. Bank, National Association, Cincinnati, Ohio, relating to the bank’s administration of a prepaid card program to distribute public unemployment insurance benefit payments. The OCC’s civil money penalty is separate from, but coordinated with, the CFPB, which also issued an enforcement order against the bank. The CFPB ordered the bank to pay a $15 million civil money penalty and redress harmed consumers.

The CFPB issued a new report finding that many consumers are still being hit with unexpected overdraft and nonsufficient fund (NSF) fees, despite recent changes implemented by banks and credit unions intended to eliminate billions of dollars in fees charged each year.

The Federal Deposit Insurance Corporation (FDIC) issued an advisory on managing commercial real estate concentrations in a challenging economic environment. The advisory emphasizes the importance of strong capital, appropriate credit loss allowance levels, and robust credit risk-management practices for institutions with commercial real estate (CRE) concentrations.

House Financial Services Committee Chairman Patrick McHenry (R-NC) wrote a letter to the CFPB in response to the CFPB notice of proposed rulemaking implementing Section 1033 of Dodd-Frank. Among other comments, the letter highlights similarities between the CFPB’s proposal and McHenry’s own Data Privacy Act of 2023.

Representatives McHenry and Warren Davidson (R-OH) and Senators Rick Scott (R-FL) and Mike Rounds (R-SD) led 76 of their colleagues in sending a bicameral letter to Janet Yellen, Secretary of the Treasury, and Andrea Gacki, Director of the Financial Crimes Enforcement Network (FinCEN), requesting a delay in the implementation of new beneficial ownership reporting requirements for small businesses.

Reps. McHenry and Mike Flood (R-NE) led 18 of their colleagues on a letter to CFPB Director Chopra requesting an extension of the comment period for the proposed rulemaking entitled, “Defining Larger Participants of a Market for General-Use Digital Consumer Payment Applications.”

House Financial Services Committee Ranking Member Maxine Waters (D-CA) and Congresswoman Joyce Beatty (D-OH) sent a letter to the Chairman of the Federal Reserve System and Chair of the Federal Reserve Bank of Cleveland’s search committee urging them to prioritize diversity in its search for the Bank’s next president and CEO. In the letter, the Congresswomen emphasize the scale of critical decisions the incoming president will weigh in on, including interest rates, small businesses, and more – making it essential that the leadership of the Bank represents the diversity of its constituents, including women, people of color, the LGBTQ community, and experts across backgrounds.

Senators Joe Manchin (D-WV) and Jerry Moran (R-KS) reintroduced their bipartisan Fair Audits and Inspections for Regulators’ (FAIR) Exams Act. The legislation would establish an appeals process to resolve disagreements between banks and regulators. The American Fintech Council issued a statement in support of the legislation.

Senator Elizabeth Warren (D-MA) sent letters to Coinbase, the largest U.S. crypto exchange, as well as the Blockchain Association and Coin Center, two leading industry groups, demanding details on their employment of former defense, national security, and law enforcement officials. Sen. Warren cited Politico reporting that outlined how the crypto lobby has been flexing its association with the experts as it faces growing scrutiny for the role digital assets play in facilitating financial crime, including funding the Oct. 7 Hamas attacks in Israel.

Senators Sherrod Brown (D-OH), Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, Raphael Warnock (D-GA), and John Fetterman (D-PA) urged CFPB Director Rohit Chopra to monitor the risks posed by “buy now, pay later” (BNPL) products which let consumers pay off certain purchases over several weeks. In a letter to Chopra, the Senators urged the Director to monitor BNPL products as consumers significantly increase their use during the holiday season. The letter comes after Director Chopra mentioned that the CFPB is monitoring BNPL products at a Banking, Housing and Urban Affairs Committee hearing last month.

Sen. Brown and Mark Warner (D-VA) urged Securities and Exchange Commission (SEC) Chair Gary Gensler to act quickly on new rules to improve human capital disclosure by public companies. The SEC’s fall 2023 regulatory agenda suggests the “Human Capital Management Disclosure” proposed rule is likely to be delayed.

Sens. Brown, Warren, and Jack Reed (D-RI), a senior member of the Banking and Housing Committee called on Venmo to adopt new policies to reimburse consumers who get scammed, and make it easier for users to report scams and fraud on Venmo. This new letter comes as instant payment platform Zelle has taken new steps to reimburse customers who fall prey to imposter scams.

Senate Banking Committee Ranking Member Tim Scott (R-SC) released a 2023 Year-in-Review discussing his accomplishments throughout the year.

Sen. Scott sent a letter to SEC Chair Gensler urging him to rescind two rules that would expand the entities required to register as securities dealers. In the letter, Sen. Scott argues that the rules are overly vague, lack economic analysis, and will reduce liquidity in U.S. Treasury markets.

Fairshake, a federal super PAC registered with the Federal Election Commission (“FEC”), and its network of affiliated super PACs announced their first wave of fundraising efforts. They will report $78 million raised and in the bank in Q4 2023 to support leaders who support American crypto and blockchain innovation and responsible regulation in the forthcoming 2024 elections.

The House Financial Services Committee Subcommittee on National Security, Illicit Finance, and International Finance held a hearing on restricting rogue states’ revenue. The hearing touched on various topics, including international sanctions, price caps, support for Ukraine, and the changing relationship between China and Russia. Read our summary here.

The House Financial Services Subcommittee on Capital Markets held a hearing to conduct oversight of key self-regulating organizations (SROs) that focus on accounting, auditing and standard-setting. Read our summary here.

The House Small Business Committee held a full committee hearing on the struggles and successes of 2023 and what can be done to help small businesses in 2024. Read our summary here.

The Senate Committee on the Judiciary, Subcommittee on Competition Policy, Antitrust and Consumer Rights held a hearing to discuss the impact of algorithms on competition and consumer rights. The hearing covered many different topics including a dedicated digital platform, algorithmic discrimination, competitiveness, artificial intelligence (AI), and consent for data collection. Read our summary here.

Treasury Secretary Janet Yellen convened a meeting of the Financial Stability Oversight Council (Council) in executive and public sessions at the U.S. Department of the Treasury (Treasury). The Council heard updates on the continued efforts of the Council’s Nonbank Mortgage Servicing Task Force regarding potential financial stability risks related to nonbank mortgage servicers, work by the Council’s Hedge Fund Working Group, work by the Council’s Climate-related Financial Risk Committee, and recent cybersecurity developments.

The Council approved its 2023 annual report. The annual report reviews financial market developments, describes potential emerging threats to U.S. financial stability, identifies vulnerabilities in the financial system, and makes recommendations to mitigate those threats and vulnerabilities. Overall, the Council found that the U.S. financial system remains resilient, and the U.S. banking system remains sound. The report also details the activities of the council and summarizes significant regulatory developments.

Read Secretary of the Treasury Janet Yellen’s remarks on the report here

Read Acting Comptroller of the Currency Michael J. Hsu’s statement on the report here

Read Federal Deposit Insurance Corporation (FDIC) Chairman Martin Gruenberg’s statement on the report here

Read New York Department of Financial Services Superintendent Adrienne Harris’ statement on the report here

Need to catch up on what happened earlier this week? Check out our December 15th End of Week Wrap Up here