The American Fintech Council (AFC), the premier industry association representing responsible fintech companies who deliver critical access to safe and affordable financial services, has announced a new strategic alliance with FS Vector. FS Vector will partner with AFC to promote responsible innovation in financial services, advocate for important regulatory modernization and curate unique educational and training opportunities for the broader fintech ecosystem.
The Federal Reserve announced that 57 early adopter organizations, including financial institutions and service providers, have completed formal testing and certification in advance of the FedNow Service’s launch planned for late July. Many of these organizations will be live when the FedNow Service launches or shortly after, with financial institutions ready to send and receive transactions and service providers ready to support transaction activity. The early adopters include 41 financial institutions participating as senders, receivers and/or correspondents supporting settlement, 15 service providers processing on behalf of participants, and the U.S. Department of the Treasury.
The Federal Reserve Board released the results of its annual bank stress test, which demonstrates that large banks are well positioned to weather a severe recession and continue to lend to households and businesses even during a severe recession. All 23 banks tested remained above their minimum capital requirements during the hypothetical recession, despite total projected losses of $541 billion.
Ranking Member of the House Financial Services Committee Maxine Waters (D-CA) sent a letter to Janet Yellen, the Secretary of the United States Treasury along with Gary Gensler, Chair of the Securities and Exchange Commission (SEC), urging the two agencies to share their analysis by June 30 on the draft digital assets market structure legislation released by Committee Republicans earlier this month. In the letters, Waters also requests that both agencies stand ready to brief committee members on their recommendations, if needed.
The CFPB announced it is accepting applications for CFPB advisory committees, including the Consumer Advisory Board, the Community Bank Advisory Council, the Credit Union Advisory Council, and the Academic Research Council.
The CFTC Released a Request for Comment on the Impact of Affiliations of Certain CFTC-regulated entities. The request specifically asks about affiliations between derivatives clearing organizations (DCOs), designated contract markets (DCMs), or swap execution facilities (SEFs) with intermediaries, such as futures commission merchants (FCMs), or other market participants. Commissioner Christy Goldsmith Romero issued a statement, saying a discussion of vertical integration of crypto platforms is “conspicuously absent” from the request for comment, and believes that “the Commission can engage in appropriate regulation of the digital asset derivatives market to protect customers, particularly retail customers, while allowing for markets to develop responsibly and safely with the potential in the future for expanded access to financial markets, fair competition, and efficiency.”
The Financial Action Task Force (FATF) published a Targeted Update on Implementation of the FATF Standards on Virtual Assets and Virtual Asset Service Providers.
The Department of the Treasury’s (Treasury) Federal Insurance Office (FIO) released a report entitled Insurance Supervision and Regulation of Climate-Related Risks. The report, which is in response to President Biden’s Executive Order on Climate-Related Financial Risk, assesses climate-related issues and gaps in the supervision and regulation of insurers.
The CFTC Division of Enforcement announced it has established two new task forces. The Cybersecurity and Emerging Technologies Task Force will address cybersecurity issues and other concerns related to emerging technologies (including artificial intelligence). The Environmental Fraud Task Force will combat environmental fraud and misconduct in derivatives and relevant spot markets. The task forces are comprised of attorneys and investigators across different offices within the Enforcement Division, who will prosecute cases, serve as subject matter experts, and coordinate efforts with the CFTC’s other divisions and offices.
The CFPB issued an order against ACI Worldwide and one of its subsidiaries, ACI Payments, for improperly initiating approximately $2.3 billion in unlawful mortgage payment transactions. ACI’s data handling practices negatively impacted nearly 500,000 homeowners with mortgages serviced by Mr. Cooper (formerly known as Nationstar). By unlawfully processing erroneous and unauthorized transactions, ACI opened homeowners to overdraft and insufficient funds fees from their financial institutions. The order requires ACI, among other things, to pay a $25 million civil money penalty.
The Board of Governors of the Federal Reserve System (FRB), Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA), and Office of the Comptroller of the Currency (OCC) jointly issued a final policy statement on commercial real estate loan accommodations and workouts. The updates reinforce and build on existing supervisory guidance calling for financial institutions to work “prudently and constructively” with creditworthy borrowers during times of financial stress.
The U.S. Small Business Administration (SBA) released a report detailing analysis of anti-fraud protocols put in place by the Biden-Harris Administration in SBA’s four largest pandemic programs. The report “Protecting the Integrity of the Pandemic Relief Emergency Programs: SBA’s Actions to Prevent, Detect and Address Fraud” highlights the actions the agency deployed to restore fraud measures in pre-existing relief programs, enhance fraud controls in new programs, as well as support cross-agency efforts against fraud.
The Public Company Accounting Oversight Board (PCAOB) issued for public comment a proposal designed to improve audit quality and enhance investor protection by addressing aspects of designing and performing audit procedures that involve technology-assisted analysis of information in electronic form. The proposal includes changes to update aspects of AS 1105, Audit Evidence, and AS 2301, The Auditor’s Responses to the Risks of Material Misstatement.
The Federal Financial Institutions Examination Council released 2022 Data on Mortgage Lending reported under the Home Mortgage Disclosure Act (HMDA).
The CFPB published FAQs on compliance with the small business lending rule.
President Biden delivered remarks on Bidenomics in Chicago, IL. President Biden discussed his economic vision for the country.
Federal Reserve Chair Jerome Powell delivered remarks entitled Financial Stability and Economic Developments at the Banco de Espana Fourth Conference on Financial Stability. Chair Powell discussed the current economic situation, stresses that emerged in the U.S. banking system earlier this year, the evolution of the financial system since the Great Recession, and observations on how global efforts to boost resilience in the financial sector over the past decade have been an important success, how recent developments have revealed residual vulnerabilities that need to be addressed, and the need to be vigilant for emerging risks.
The Chairman of the House Financial Services Committee, Patrick McHenry (R-NC), the Chairman of the House Judiciary Committee, Jim Jordan (R-OH), and the Chairman of the House Oversight and Accountability Committee, James Comer (R-KY), sent a letter to Securities and Exchange Commission (SEC) Chair Gary Gensler. The letter raises concerns with Chair Gensler’s potential failure to comply with federal record keeping laws.
SEC Division of Enforcement Director Gurbir S. Grewal delivered remarks at the Financial Times Cyber Resilience Summit. Director Grewal discussed the SEC’s efforts to ensure cybersecurity and resilience.
Federal Reserve Governor Michelle Bowman delivered a speech entitled Responsive and Responsible Bank Regulation and Supervision at the Salzburg Global Seminar on Global Turbulence and Financial Resilience: Implications for Financial Services. Governor Bowman discussed responsive regulation and supervision, independent review, supervisory reform, responsible reform of the regulatory framework, non-bank financial services firms, and regulatory Influence on Banking Products and Services and the Broader Banking System.
Senator Elizabeth Warren (D-MA) sent a letter to Assistant Attorney General Jonathan Kanter, Federal Deposit Investment Corporation (FDIC) Chairman Gruenberg, Acting Comptroller of the Currency Michael Hsu, Federal Reserve Vice Chair for Supervision Michael Barr, and Treasury Secretary Janet Yellen, urging regulators to promote greater competition in the banking sector by toughening their stances on bank mergers and strengthening bank merger review guidelines.
The California Department of Financial Protection and Innovation (DFPI) announced that it has issued a desist and refrain order against CryptoFX LLC (CryptoFX) and two of its promoters for violating California securities laws by offering and selling unqualified securities and making material misrepresentations and omissions to investors. With this order, the DFPI has ordered the company to stop soliciting investments and making misrepresentations about returns in the state of California.
The Brookings Institution announced that Cecilia Rouse has been named its next president, following approval by its Board of Trustees. Rouse’s appointment will be effective in January 2024, when she will succeed Amy Liu, who has served as interim president since July 2022 and will remain in this role until January.
The Financial Action Task Force (FATF), a global anti-money laundering and countering the financing of terrorism (AML/CFT) standard setting body, stated, following this week’s plenary meeting, that almost 75 percent of jurisdictions are not in full compliance with its requirements for virtual assets. Further, more than half of jurisdictions surveyed have not taken any steps towards implementing the Travel Rule. The FATF will publish a report on June 27, urging countries to implement the FATF’s recommendations for virtual assets and virtual asset service providers.
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