February 23, 2024

Today, Judge Alan Albright of the U.S. District Court for the Western District of Texas presided over a hearing in which he directed the Texas Blockchain Council and Riot Platforms, a digital asset mining company, (the “Plaintiffs”) and the Department of Energy and Energy Information Administration (EIA) (the “Defendants”) to discuss the terms of a consent order that would provide a 4-week stay on the EIA’s emergency declaration to collect certain information regarding digital asset miners’ energy use. The stay would apply to miners nationally. The Plaintiffs filed the lawsuit yesterday, seeking a temporary restraining order against the Defendants’ information collection in advance of the first deadline (today) for miners to provide certain information to the EIA. 

If the Plaintiffs and Defendants are unable to agree on the terms of the consent order, Judge Albright said he would be inclined to grant a temporary restraining order against the Defendants to give the Plaintiffs more runway and to protect the information filed. Any information submitted to the EIA already will be sequestered until the end of the 4-week period.

The parties have until 4:00 pm ET today to agree on the terms of the consent order that they would enter, and the EIA will be required to notify miners on its website and via email that the collection has been paused.  

Note that while this extends the amount of time miners have to respond to the survey, the court has not taken a position on the merits of the Plaintiffs’ lawsuit.

Office of the Comptroller of the Currency (OCC) Acting Comptroller Michael Hsu offered remarks to the Financial Stability Board’s Crypto Working Group. In his remarks, Acting Comptroller Hsu discussed how multifunction crypto-asset intermediaries (MCIs) operate without a consolidated supervisor and how more consolidated supervision is needed; that implementing the FSB’s global regulatory framework for crypto-asset activities has been challenging, and no real progress has been made on consolidated supervision, “[t]his is, in part, because the crypto industry continues to resist what it sees as improper or over-burdensome regulation and oversight;” and the relationship between blockchain in tokenization and how, according to OCC Tokenization Symposium keynote speaker Hyun Song Shin of the Bank for International Settlements, “tokenization can improve settlement and enable programmability without blockchains.”

The OCC announced that Ted Dowd will serve as Acting Senior Deputy Comptroller and Chief Counsel, effective April 8, 2024. Mr. Dowd will serve in this position while the agency initiates a search for a successor to Ben McDonough, who will be taking a position at another agency.

Mr. Dowd joined the OCC in 2006 and has served as Deputy Chief Counsel since 2018. In this position, he is responsible for a broad range of legal matters related to bank powers and structure, financial technology, and licensing transactions. Mr. Dowd is also responsible for overseeing the operations of all OCC district counsel offices.

The Consumer Financial Protection Bureau (CFPB) published a blog post on credit card interest rate margins. The blog states that the average credit card annual percentage rate (APR) margin is the highest on record, which has fueled the profitability of revolving balances, and that excess APR margin costs consumers billions of dollars a year. 

The Commodity Futures Trading Commission’s (CFTC) Market Participants Division (MPD) issued a no-action letter in relation to the requirement that swap dealers and major swap participants disclose the Pre-Trade Mid-Market Mark (PTMMM) of a swap to certain counterparties. CFTC Commissioner Christy Goldsmith Romero issued a dissenting opinion, stating that the letter rolls back critical Dodd-Frank Act reforms and inappropriately shifts the burden of understanding swap dealer’s conflicts and incentives back onto counterparties.

The Securities and Exchange Commission (SEC) adopted amendments to its ethics rules to strengthen and modernize its ethics compliance program. The amendments update the SEC’s existing ethics requirements that govern the securities holdings and transactions of all agency employees, their spouses, and minor children. The rule was adopted jointly with the Office of Government Ethics.

Senators Elizabeth Warren (D-MA), a member of the Senate Banking Committee, and Bernie Sanders (D-VT), and U.S. Representatives Ilhan Omar (D-MN), Rashida Tlaib (D-MI), and Ayanna Pressley (D-MA) sent a letter to the heads of JPMorgan Chase, Bank of America, Wells Fargo, and Citibank seeking information on their practices and the steps they are taking to prevent discriminatory banking practices following recent reports that major banks may be disproportionately restricting or shutting down the accounts of Muslim Americans.

Acting Comptroller of the Currency Michael Hsu discussed banking and commerce, regulatory effectiveness, and financial stability in remarks at Vanderbilt University. He also offered thoughts on the potential for the Financial Stability Oversight Council’s (FSOC) recently adopted analytic framework to identify and address financial stability risks, particularly regarding payments and private credit/equity, as they emerge. Specifically, he called for a “trip wire” approach, subject to notice and comment, where, “the FSOC would establish a set of metrics and thresholds, which if exceeded would trigger the assessment of systemic risk. The trip wires could complement other modes of analysis and would not have to be the exclusive means of prompting an assessment. “ Notably,” he elaborated, ”the only consequence of crossing a trip wire would be to move from the identification phase to the assessment phase of the analytic framework.”

Need to catch up on what happened earlier this week? Check out our February 21st Midweek Update here