- Top Lines
Today, the Department of the Treasury (Treasury), Department of Justice (DOJ), Department of Commerce (Commerce), and Office of Science and Technology Policy (OSTP) within The White House published reports that follow from the Biden Administration’s Executive Order on Ensuring Responsible Development of Digital Assets (the EO).
- Weekly Wrap Up
Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, introduced H.R. 8833, the “Making Communities Stronger Through the Community Reinvestment Act.” The bill will make multiple updates to the current Community Reinvestment Act (CRA), including requiring CRA exams to evaluate bank lending done in partnership with nonbanks and fintechs.
The Consumer Financial Protection Bureau (CFPB) published a report offering insights on the Buy Now, Pay Later (BNPL) industry. CFPB Director Rohit Chopra stated in a tweet that the CFPB will be looking at ways to close the gaps in borrower protections for BNPL.
Director Chopra appeared on Bloomberg TV to discuss the report. Director Chopra said that he’s asked CFPB staff to provide options with the goal of promoting fair competition of similar products. He stated that the CFPB wants to ensure that the BNPL industry isn’t seizing any loopholes and said that new rules and guidance may be forthcoming.
Senate Banking Committee Republicans sent a letter to CFPB Director Chopra noting concern that the Bureau has “returned to its Obama-era roots as a lawless and unaccountable agency” and urged Director Chopra to “stop using inappropriate tactics to harm financial institutions’ reputations and customer relationships in order to advance your liberal policy preferences.”
The letter cites specific “abuses of power” including the CFPB’s “pressure campaign” against overdraft services, the ability to publicly disclose decisions to supervise a nonbank, changes to the rules of adjudication making it harder for companies to defend themselves against novel enforcement theories, and referenced the use of mass email – in the case of Fifth Third Bank – “to harm the customer relationships of a bank that is involved in litigation with the agency.”
The Office of the Comptroller of the Currency (OCC) reported that the performance of first-lien mortgages in the federal banking system improved during the second quarter of 2022. The OCC Mortgage Metrics Report, Second Quarter 2022 showed that 97 percent of mortgages included in the report were current and performing at the end of the quarter, compared to 95 percent a year earlier.
President Biden issued an Executive Order to provide direction to the Committee on Foreign Investment in the United States (CFIUS) by elaborating on existing statutory factors and adding several national security factors for CFIUS to consider during its review process.
Treasury Secretary Janet Yellen issued a statement on the Executive Order, stating that it “highlights CFIUS’s increasing attention to national security risks in several key areas and sharpens the Committee’s focus on protecting America’s national security, while maintaining the U.S. open investment policy.”
Securities and Exchange Commission (SEC) Commissioner Mark Uyeda delivered remarks at the “SEC Speaks” Conference 2022. Commissioner Uyeda said that “without the benefit of comments from crypto investors and other market participants, the Commission is unable to consider their perspectives in developing an appropriate regulatory framework. To the extent that crypto assets raise unique issues not otherwise addressed in the current rule book, the Commission should consider proposing rules or issuing interpretive releases.”
The Senate Committee on Banking, Housing, and Urban Affairs held a hearing on oversight of the U.S. Securities and Exchange Commission (SEC), with Chair of the SEC Gary Gensler. Ultimately, the hearing was fairly contentious, with Senators focusing their discussion on digital assets, climate disclosures, and more.
The Senate Agriculture Committee hosted a legislative hearing to discuss the Digital Commodities Consumer Protection Act. (DCCPA) The hearing was divided into two panels, the first featuring CFTC Chair Rostin Behnam, who discussed the CFTC’s ability to police digital asset spot markets, and the second featuring industry participants. The hearing featured discussion of market volatility and consumer protection, energy concerns, interagency regulatory recommendations, financial inclusion, and other issues surrounding the Act.
The Federal Financial Institutions Examination Council (FFIEC) announced the appointment of Yolanda Ford to the FFIEC’s State Liaison Committee (SLC). Ford was designated by the National Association of State Credit Union Supervisors (NASCUS) to complete the remainder of the two-year term left vacant by the early departure of Senior Deputy Commissioner Stephen Pleger. Ford’s partial term on the SLC will expire on March 31, 2023.
The Federal Financial Institutions Examination Council (FFIEC) announced the appointment of Yolanda Ford to the FFIEC’s State Liaison Committee (SLC). Ford was designated by the National Association of State Credit Union Supervisors (NASCUS) to complete the remainder of the two-year term left vacant by the early departure of Senior Deputy Commissioner Stephen Pleger. Ford’s partial term on the SLC will expire on March 31, 2023.
The Cato Institute held a webinar featuring FRB Chair Jerome Powell, discussing inflation, monetary policy, and digital assets.
The Senate Committee on Banking, Housing, and Urban Affairs held a hearing to discuss new consumer financial products and their impacts on workers. The hearing discussed fintech product regulation and popular consumer financial products, including BNPL, EWA, and TRAPs.
The Center for Responsible Lending (CRL) and the Consumer Bankers Association (CBA) jointly petitioned the CFPB to develop a rule that would define larger participants in the market for personal loans so that sizable non-depository lenders would be subject to consistent CFPB supervision as large banks and credit unions making such loans already are.
The New York State Department of Financial Services announced that following Ethereum’s upcoming protocol change to a “proof of stake” consensus mechanism, the Department will continue to recognize Ether (ETH) under its Greenlisted Coins/Tokens list.
- ICYMI
Acting Comptroller of the Currency Michael Hsu discussed the long-term threats to trust in banking in remarks at the The Clearing House + Bank Policy Institute (TCH + BPI) Annual Conference in New York. His comments also included updates on his priorities of guarding against complacency, addressing inequality, adapting to digitalization, and managing climate-related risk in the federal banking system.
Acting Comptroller Hsu emphasized the need to maintain a “careful and cautious” approach to crypto activities, but said that he believes fintechs and big techs warrant much more attention. He expressed particular concern about bank-fintech partnerships, climate related risks, and economic inequality.