February 14, 2024

House Committee on Agriculture Chairman Glenn “GT” Thompson (R-PA); House Financial Services Committee Chairman Patrick McHenry (R-NC);  House Financial Services Subcommittee on Digital Assets, Financial Technology and Inclusion Chairman French Hill (R-AR); and House Agriculture Subcommittee on Commodity Markets, Digital Assets, and Rural Development Subcommittee Chairman Dusty Johnson (R-SD) sent a letter to Treasury Secretary Janet Yellen in her capacity as Chair of the Financial Stability Oversight Council (FSOC), demanding answers on FSOC’s calls to fill existing regulatory gaps in the digital asset spot market for digital assets that are not securities. The letter states that despite identifying these gaps, regulators have failed to facilitate an environment that ensures consumer protection and fosters digital asset innovation in the United States. The Congressmen state that the bipartisan FIT for the 21st Century Act would provide the clarity and certainty that digital asset spot markets desperately need.

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a Notice of Proposed Rulemaking (NPRM) intended to keep criminals and foreign adversaries from exploiting the U.S. financial system and assets through investment advisers. The proposed rule would require certain investment advisers to apply Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) requirements pursuant to the Bank Secrecy Act, including implementing risk-based AML/CFT programs, reporting suspicious activity to FinCEN, and fulfilling recordkeeping requirements. Comments will be accepted until April 15, 2024. Read the fact sheet on the proposed rule here.

FinCEN issued a Financial Trend Analysis (FTA) reflecting an increase in Bank Secrecy Act (BSA) reporting associated with the use of convertible virtual currency and online child sexual exploitation and human trafficking. This FTA is based on BSA reporting filed between January 2020 and December 2021.

Federal Reserve Board (FRB) Governor Michelle Bowman delivered a speech entitled “Defining a Bank” at the American Bankers Association 2024 Conference for Community Bankers. Governor Bowman discussed what a community bank is, fairness and community banks, and cumulative burden and the policy response.

FRB Governor Bowman published an essay entitled “Accountability for Banks, Accountability for Regulators.” Governor Bowman discussed independence in bank regulation; transparent, predictable, and fair policies and procedures; and the Fed’s responsibility for appropriate implementation of supervision and regulation.

Acting Comptroller of the Currency Michael J. Hsu discussed the importance of eliminating appraisal bias in the financial industry in remarks at an Appraisal Subcommittee (ASC) Hearing. The ASC is a subcommittee of the Federal Financial Institutions Examination Council, of which the Office of the Comptroller of the Currency is a member. In his remarks, Mr. Hsu discussed how homeownership can promote economic equality. He also highlighted the OCC’s actions intended to improve access to homeownership and elevate fairness in the financial system.

The Federal Financial Institutions Examination Council (FFIEC) issued a statement of principles related to valuation discrimination and bias for member entities to consider in their consumer compliance and safety and soundness examinations. The principles aid member entities in assessing whether their supervised institutions’ compliance and risk management practices are appropriate to identify and mitigate discrimination or bias in their residential property valuation practices.

Senate Majority Whip Dick Durbin (D-IL), Chair of the Senate Judiciary Committee, sent letters to the CEOs of Visa, Mastercard, United Airlines, and American Airlines inviting them to testify at a public hearing regarding competition in the credit card market. Senator Durbin stated that “particularly given Visa, Mastercard, United Airlines, and American Airlines’ self-proclaimed personal engagement in this issue, it is critical that the Committee, and the American people, hear directly from their CEOs in defense of a status quo that allowed Visa and Mastercard to levy a total of $93 billion in credit card fees on consumers, small businesses, and others in 2022 alone.” The Senate Judiciary Committee hearing on credit card competition will be held on April 9th at 10:00 a.m.

Read the letter to the CEO of Visa here.
Read the letter to the CEO of Mastercard here.
Read the letter to the CEO of United Airlines here.
Read the letter to the CEO of American Airlines here.

The Congressional Asian Pacific American (CAPAC)’s leadership members announced they wrote to the CEOs and heads of America’s Fortune 100 companies, the 100 largest public and privately held companies in the country.  The letters to these companies seek to determine the diversity, equity, and inclusion (DEI) practices for Asian Americans, Native Hawaiians, and Pacific Islanders (AANHPIs) specifically. This initiative follows CAPAC’s 2016 letter to Fortune 100 companies regarding corporate diversity and AANHPIs.

The House Financial Services Committee and Senate Banking Committee held hearings on the FSOC Annual Report. Read our summary here.

The Securities and Exchange Commission adopted amendments to Form PF, the confidential reporting form for certain SEC-registered investment advisers to private funds, including those that also are registered with the Commodity Futures Trading Commission (CFTC) as commodity pool operators or commodity trading advisers. The amendments, which the CFTC concurrently adopted, are designed to enhance the ability of FSOC to monitor and assess systemic risk and to bolster the SEC’s oversight of private fund advisers and the agency’s investor protection efforts. The SEC and CFTC also agreed to a memorandum of understanding related to the sharing of Form PF data. The fact sheet on the amendments is available here.

Read SEC Chair Gary Gensler’s statement here
Read SEC Commissioner Hester Peirce’s statement here.
Read SEC Commissioner Mark Uyeda’s statement here.
Read CFTC Commissioner Caroline Pham’s statement here.
Read CFTC Commissioner Kristin Johnson’s statement here.
Read SEC Commissioner Mark Uyeda and CFTC Commissioner Caroline Pham’s joint statement here.

Need to catch up on what happened last week? Check out our February 9th End of Week Wrap Up here