January 14, 2022

The Biden Administration is expected to nominate Duke Law School professor Sarah Bloom Raskin to serve as Vice Chair for Supervision of the Board of Governors. Read more about Raskin’s background here.

Richard Clarida, Vice Chair of the Board of Governors of the Federal Reserve System (the Fed), announced that he will step down from the central bank, two weeks earlier than his term was scheduled to end. His resignation comes in the wake of renewed questions about his trading activity at the onset of the pandemic.

The Senate Banking Committee held a hybrid hearing on the re-nomination of The Honorable Jerome Powell to serve as the Chairman of the Fed. The hearing was largely bipartisan, with Members on both sides of the aisle, including Sens. Brown, Toomey, Jack Reed (D-RI), Mike Rounds (R-SD), Thom Tillis (R-NC), and Kevin Cramer (R-ND), all announcing their intention to support Chair Powell’s re-nomination. Key issues under discussion during the hearing included inflation, employment, climate change, Fed independence, and ethics. Read our memo on the hearing here.

The Senate Banking Committee also held a hybrid hearing on the nomination of Lael Brainard to be Vice Chair of the Fed and Sandra Thompson to be Director of the Federal Housing Finance Agency (FHFA). Read our memo on the hearing here.

Securities and Exchange Commission (SEC) Chair Gary Gensler declined to answer a question about whether ether, the cryptocurrency with the second largest market capitalization, should be viewed as a security in an appearance on CNBC, potentially leaving the door open with respect to a future enforcement action.

Acting Comptroller of the Currency Michael Hsu addressed stablecoin regulation during a speech at the British American Business Transatlantic Finance Forum. Acting Comptroller Hsu said, “Regulating stablecoin issuers as banks could also enable more innovation in crypto and make those innovations more durable.”

Financial Crimes Enforcement Network (FinCEN) Acting Director Himamauli Das said in a speech that FinCEN is considering developing a regulatory sandbox and the agency would need feedback from financial institutions on how to design it.

FinCEN and FDITech, the tech lab of the Federal Deposit Insurance Corporation (FDIC), announced a tech sprint focused on developing solutions to help regulators and financial institutions measure the effectiveness of digital identity proofing—the process used to collect, validate, and verify information about a person.

Rep. Josh Gottheimer (D-NJ-5) is reportedly planning to introduce a bill in the coming weeks to create a new regulatory regime around stablecoins, requiring stablecoin issuers to either become a bank or to partner with a bank in order to operate.

The Consumer Financial Protection Bureau (CFPB) followed its market-monitoring inquiry into BNPL products and business practices with an invitation for public comments.

Rep. Tom Emmer (R-MN-06) introduced a bill to prohibit the Fed from issuing a central bank digital currency (CBDC) directly to individuals.

The House Select Committee on Economic Disparity and Fairness in Growth officially published a voluntary request for information, soliciting input on ways to create fair economic growth and alleviate economic disparity.

The Government Accountability Office (GAO) is urging the Treasury Department to increase its oversight of cryptocurrency ATMs to help crack down on human trafficking and illegal drug sales. The GAO — the watchdog arm of Congress — released a report outlining how federal regulators have struggled to grasp the ways cryptocurrencies are used to facilitate criminal activity as the market has swelled to $2.2 trillion.

Jelena McWilliams, Chair of the Federal Deposit Insurance Corporation (FDIC), announced on December 31 her intention to resign from the agency. While not cited as the reason for her departure, the announcement follows weeks of turbulence within the FDIC’s Board of Directors over a proposal to request information by the FDIC from the public on bank mergers and acquisitions. The proposal was developed and endorsed by the Democratic majority and published by the CFPB without the support of Chair McWilliams, who claimed the proposal was not properly adopted by the FDIC. Meanwhile, as this was occuring, Senate Banking Committee Republicans sent a letter to President Joe Biden urging him to rebuke CFPB Director Rohit Chopra and FDIC board member Martin Gruenberg “for their attempt to politicize the FDIC and compromise its neutrality and independence by disregarding its bylaws and its historical practice of conducting agency business through the chairman.” McWilliams’ departure will be effective February 4th, and FDIC Board Member Martin Gruenberg will become Acting Chair. See our memo on the latest developments at the FDIC.

Thursday, January 20 @ 10:30 am EST: The Subcommittee on Oversight and Investigations of the Committee on Energy and Commerce will hold a hybrid hearing entitled, “Cleaning Up Cryptocurrency: The Energy Impacts of Blockchains.”