November 8, 2023

The Consumer Financial Protection Bureau (CFPB) proposed supervising large nonbank companies that offer services like digital wallets and payment apps via a notice of proposed rulemaking for consumer payments. The proposed rule would require nonbank financial companies – specifically those companies handling more than 5 million transactions per year – to adhere to the same rules as large banks, credit unions, and other financial institutions already supervised by the CFPB.

Rep. Patrick McHenry (R-NC), Chairman of the House Financial Services Committee, issued a statement that the proposed rule is a “step in the wrong direction.”

Treasury Assistant Secretary for Financial Institutions Policy Graham Steele chaired a meeting with representatives from civil rights organizations, consumer advocacy groups, and research organizations to discuss financial inclusion and financial barriers faced by underserved communities. Deputy Secretary of the Treasury Wally Adeyemo delivered remarks highlighting the importance of financial inclusion to advance racial equity and Treasury’s efforts to ensure that the economic recovery following the COVID-19 pandemic was the most equitable on record.

The Department of Commerce’s Bureau of Industry and Security (BIS) and the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a joint notice highlighting a new Suspicious Activity Report (SAR) key term (“FIN-2023-GLOBALEXPORT”) for financial institutions to reference when reporting potential efforts by individuals or entities seeking to evade U.S. export controls not related to Russia’s invasion of Ukraine.

FinCEN hosted a FinCEN Exchange focused on the threat posed by the illicit use of convertible virtual currency in light of the critical role the financial industry plays in detecting terrorism financing.

FinCEN issued a final rule that specifies the circumstances in which a reporting company may report an entity’s FinCEN identifier in lieu of information about individual beneficial owners.

Federal Reserve Board (FRB) Governor Lisa Cook delivered remarks on financial stability at Duke University. Governor Cook stated that the financial system is substantially more resilient than it was in the mid-2000s, reflecting progress by regulators and the private sector in boosting resilience. However, she stated that we cannot be complacent and there are still important risks related to asset valuations, business and household borrowings, and financial-sector leverage.

FRB Governor Michelle Bowman delivered remarks on the economy and bank supervision and regulation at the 2023 Ohio Bankers League “Main Event” in Columbus, Ohio. Governor Bowman discussed evolving bank regulations, the economy, and monetary policy.

The CFPB ordered Citi to pay $25.9 million in fines and consumer redress for “intentionally and illegally discriminating against credit card applicants the bank identified as Armenian American.” The CFPB stated that from 2015 through 2021, Citi singled out for discrimination applicants for certain credit card products, based on their surnames, whom it suspected of being of Armenian descent. Citi supervisors allegedly conspired to hide the discrimination by instructing employees not to discuss the discriminatory practices in writing or on recorded phone lines. Citi employees also lied about the basis of denial, providing false reasons to denied applicants. Under the order, Citi will pay $1.4 million to harmed consumers along with a $24.5 million penalty.

Securities and Exchange Commission (SEC) Chair Gary Gensler delivered remarks entitled “Fall Feelings: Treasury Markets’ Efficiency and Resiliency” before the Securities Industry and Financial Markets Association (SIFMA). Chair Gensler discussed bank and nonbank intermediation, leverage in the system, interest rates, data collection, and recent regulatory reforms.

SEC Commissioner Mark Uyeda delivered remarks at the Practising Law Institute’s 55th Annual Institute on Securities Regulation. Commissioner Uyeda discussed determining the purpose of rules, re-proposing rules, scaling rules, and considering the cumulative costs of rules.

The Commodity Futures Trading Commission (CFTC) released its enforcement results for Fiscal Year 2023 that include a record setting number of digital asset cases, actions to hold registrants to their regulatory obligations, manipulation and spoofing actions, and precedent-setting court decisions in complex litigations.

The Federal Housing Finance Agency (FHFA) published a report presenting the actions it plans to pursue in service of its FHLBank System at 100: Focusing on the Future initiative. The actions fall under four broad themes: Mission of the FHLBank System; Stable and reliable source of liquidity; Housing and community development; and FHLBank System operational efficiency, structure, and governance.

Sen. Sherrod Brown (D-OH), Chairman of the Senate Banking Committee, held an executive session to vote on the nominations of Ms. Tanya Otsuka, of Virginia, to be a Member of the National Credit Union Administration; The Honorable Mark Uyeda, of California, to be a Member of the Securities and Exchange Commission; The Honorable Spencer Bachus III, of Alabama, to be a Member of the Board of Directors of the Export-Import Bank; Ms. Jennifer Fain, of Virginia, to be Inspector General, Federal Deposit Insurance Corporation; The Honorable Claudia Slacik, of New York, to be a Director of the Securities Investor Protection Corporation; and The Honorable William Brodsky, of Illinois, to be a Director of the Securities Investor Protection Corporation. The Committee advanced all six nominees by voice vote.

The Financial Stability Oversight Council (FSOC) unanimously voted to issue final versions of a new analytic framework for financial stability risks and updated guidance on the Council’s nonbank financial company determinations process. The updated Guidance for Nonbank Financial Company Determinations (Nonbank Designations Guidance) sets forth the Council’s procedures for considering whether to designate a nonbank financial company for Federal Reserve supervision and prudential standards under section 113 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).  

Secretary of the Treasury Janet Yellen delivered remarks on the framework and guidance and stated that the documents will help FSOC achieve greater public transparency and analytic rigor. 

OCC Acting Comptroller Michael Hsu statement.

CFPB Director Rohit Chopra statement.

SEC Chair Gary Gensler remarks.

Need to catch up on what happened earlier this week? Check out our End of Week Wrap Up here