June 17, 2022

From the stage of the ‘Consensus 2022,’ House Financial Services Committee Ranking Member Patrick McHenry (R-NC) called for passage of bipartisan stablecoin legislation this year. McHenry said a bill should start in the House which could be sent to the Senate for end of the year (November/December) action. He concluded this would have to be done with the leadership of HFSC Chairwoman Maxine Waters (D-CA). Finally, McHenry, who shared the stage with Senators Kirsten Gillibrand (D-NY), Cynthia Lummis (R-WY), and Pat Toomey (R-PA), said the more difficult questions about market structure and product regulation outside of stablecoins would need to wait for next year. He will make this legislation a priority if he chairs HFSC next Congress.

The Consumer Financial Protection Bureau (CFPB) released its annual report on the top financial concerns facing service members, veterans, and military families, based on the complaints they submitted to the CFPB. The report highlighted experiences of military families with medical billing, credit reporting, and debt collection. 

The CFPB announced that it is launching an initiative to improve customer service at big banks, and is seeking public input on how bank customers can assert their rights to better customer service with big banks.

The Financial Crimes Enforcement Network (FinCEN) is issuing an advisory to alert financial institutions to the rising trend of elder financial exploitation (EFE).  EFE involves the illegal or improper use of an older adult’s funds, property, or assets, and is often perpetrated either through theft or scams.  The advisory highlights new EFE typologies and red flags since FinCEN issued its first advisory on the issue in 2011. 

The CFPB released a blog discussing buy now, pay later (BNPL) and credit reporting. 

The Basel Committee on Banking Supervision issued principles for the effective management and supervision of climate-related financial risks. Through this publication, the Committee aims to promote a principles-based approach to improving both banks’ risk management and supervisors’ practices related to climate-related financial risks.

The Financial Crimes Enforcement Network (FinCEN) issued an Advance Notice of Proposed Rulemaking (ANPRM) to solicit public comment on questions relating to the implementation of a no-action letter process at FinCEN. 

Senator Bill Hagerty (R-TN), along with Senators Thom Tillis (R-NC), Cynthia Lummis (R-WY), Mike Crapo (R-ID), and Mike Rounds (R-SD), sent a letter to SEC Chair Gary Gensler noting their concerns with the SEC’s Staff Accounting Bulletin (SAB 121) interpretive guidance “for entities to consider when they have obligations to safeguard crypto-assets for their platform users.” The Senators call the Bulletin “regulation disguised as staff guidance,” which is designed to circumvent the rulemaking process required under the Administrative Procedure Act.The letter further calls for a withdrawal of SAB 121 and for the SEC to “provide any economic analysis done on the potential impact of this bulletin – including the effect on capital requirements and retail investor protections – as well as a description of any stakeholder feedback and interagency review.”

Federal Reserve Bank of Kansas City President Esther George declined a request from a senior Republican senator for documents relating to a fintech company that figured in a recent confirmation controversy. In a letter Thursday to Senator Patrick Toomey, George said her bank won’t provide the documents he had sought about the granting of a Fed master account to a Colorado fintech firm called Reserve Trust Company.

U.S. Deputy Secretary of the Treasury Wally Adeyemo met with executive members of the Bank Policy Institute’s Technology Policy Division to discuss the Treasury Department’s ongoing work to promote cyber resilience, safeguard vital government applications, and work collaboratively with private sector institutions to maintain security.

Senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY) announced the introduction of the bipartisan Lummis-Gillibrand Responsible Financial Innovation Act (the “RFIA”).

If enacted in its current form, the RFIA will be the first comprehensive federal legislation to tackle cryptocurrency, blockchain, and digital assets across almost all aspects of the regulatory spectrum. The RFIA addresses the most significant issues which arise at the intersection of traditional financial regulation and digital asset innovation across taxation, securities, banking, and consumer protection and helps position the United States at the forefront of the pursuit to set a global regulatory agenda for the space. The bill would task the CFTC as the primary federal authority over digital asset markets.

The bill was praised by CFTC Chair Rostin Benham. 

Read our full summary of the bill here

The Senate Committee on Homeland Security and Government Affairs held a hearing entitled, “Rising Threats: Ransomware Attacks and Ransom Payments Enabled by Cryptocurrency” on June 7th. Read our summary here

CFTC Chair Benham and Senators Lummis and Gillibrand discussed the Responsible Financial Innovation Act at a Washington Post Live Event on June 8th. Read our summary here

The House Committee on Homeland Security Subcommittee ​​on Intelligence & Counterterrorism held a hearing on June 9th entitled, “Terrorism and Cryptocurrency – Industry Perspectives”. Read our summary here

The House Committee on Energy & Commerce Subcommittee on Consumer Protection and Commerce held a hearing discussing bipartisan legislation to strengthen data privacy and security. Read our summary here.  

Need to catch-up on what happened last week? Check out our June 10 newsletter.

Wednesday, June 22nd at 10:00 AM ET – The House Financial Services Committee will convene for a hybrid markup. Will include subsequent days if necessary.

Thursday, June 23rd at 10:00 AM ET – The House Financial Services Committee will convene for a hearing entitled “Monetary Policy and the State of the Economy”.