September 22, 2023

The United States and the People’s Republic of China launched an Economic Working Group and a Financial Working Group under the direction of Secretary of the Treasury Janet Yellen and Vice Premier He Lifeng. The two Working Groups will provide ongoing structured channels for frank and substantive discussions on economic and financial policy matters, as well as an exchange of information on macroeconomic and financial developments. 

Federal Reserve Governor Michelle Bowman delivered remarks on the economy and monetary policy at the Independent Community Bankers of Colorado Golden Jubilee. Governor Bowman discussed the federal funds rate, lending standards, and bank regulatory policy.

Federal Reserve Governor Lisa Cook gave a speech entitled Generative AI, Productivity, the Labor Market, and Choice Behavior at the National Bureau of Economic Research Economics of Artificial Intelligence Conference. Governor Cook discussed AI and productivity, labor market effects, and the effects of worker, manager, and policymaker behavior.

The Federal Deposit Insurance Corporation (FDIC) released the results of its annual survey of branch office deposits for all FDIC-insured institutions as of June 30, 2023.  The FDIC’s Summary of Deposits (SOD) provides deposit totals for each of the more than 77,000 domestic offices operated by more than 4,600 FDIC-insured commercial and savings banks, savings associations, and U.S. branches of foreign banks.

FDIC Vice Chairman Travis Hill addressed the Cato Institute in Washington, DC, offering insights on the FDIC’s regulatory agenda. Vice Chairman Hill discussed capital standards, large bank resolution, bank merger policy, liquidity rules, supervision, and climate change. 

The Consumer Financial Protection Bureau (CFPB) announced it is beginning a rulemaking process to remove medical bills from Americans’ credit reports. CFPB Director Rohit Chopra delivered remarks supporting the rulemaking at a Press Call hosted by Vice President Kamala Harris.

The CFPB published a Consumer Advisory on the right to cancel credit repair services, informing consumers that under federal law, companies are required to meet certain requirements before they can charge for their services and that consumers can dispute mistakes in their credit reports for free.

The National Credit Union Administration (NCUA) Board held its eighth open meeting of 2023 and unanimously approved a final rule that amends the NCUA’s regulations regarding indirect lending, the purchase of loan participations, and the purchase, sale, and pledge of eligible obligations and notes of liquidating credit unions. In addition, the NCUA’s Chief Financial Officer briefed the Board on the performance of the National Credit Union Share Insurance Fund during the second quarter of 2023.

The Securities and Exchange Commission (SEC) adopted amendments to the Investment Company Act “Names Rule,” which addresses fund names that are likely to mislead investors about a fund’s investments and risks. The amendments will require more funds to adopt an 80 percent investment policy, require that a fund review its portfolio assets’ treatment under its 80 percent investment policy at least quarterly, include enhanced prospectus disclosure requirements for terminology used in fund names, and include additional reporting and recordkeeping requirements for funds regarding compliance with the names-related regulatory requirements. The amendments will become effective 60 days after publication in the Federal Register. Fund groups with net assets of $1 billion or more will have 24 months to comply with the amendments, and fund groups with net assets of less than $1 billion will have 30 months to comply.

SEC Chair Gary Gensler delivered remarks before the Investor Advisory Committee. Chair Gensler discussed Regulation D, human capital disclosure, and swing pricing for open-end funds.

The SEC approved a rule to revise the SEC’s regulations under the Privacy Act, the principal law governing the handling of personal information in the federal government. The final rule clarifies, updates, and streamlines the SEC’s Privacy Act regulations, revises procedural and fee provisions, eliminates unnecessary provisions, and allows for electronic methods to verify one’s identity and submit Privacy Act requests.

Commodity Futures Trading Commission (CFTC) Commissioner Kristin Johnson delivered a keynote address at the World Federation of Exchanges Annual Meeting. Commissioner Johnson discussed creating rules of the road for disintermediated and decentralized markets. 

House Financial Services Committee (HFSC) Republicans voted to advance the CBDC Anti-Surveillance State Act which would prohibit the Federal Reserve banks from offering certain products or services directly to an individual and prohibit the use of central bank digital currency for monetary policy.

Senate Majority Leader Chuck Schumer (D-NY) alongside Senators Jeff Merkley (D-OR), Steve Daines (R-MT), Kyrsten Sinema (I-AZ), and Cynthia Lummis (R-WY) introduced the bipartisan Secure and Fair Enforcement Regulation (SAFER) Banking Act. The legislation would give legal cannabis businesses access to traditional financial institutions and would prevent federal bank regulators from ordering a bank or credit union to close an account based on reputational risk. The bill will be marked up in the Senate Committee on Banking, Housing, and Urban Affairs on September 27.

The Senate Banking Committee held a hearing to discuss the use of artificial intelligence (AI) in financial services. The hearing focused on topics including AI bias risks, fraud mitigation, public trust, and data privacy. Read our summary here.

The HFSC Subcommittee on Capital Markets held a hearing on the oversight of the SEC’s Division of Investment Management. Overall, the hearing covered topics including open-end fund liquidity, ESG, climate risks, commercial real estate, junk fees, and the SEC’s Predictive Data Analytics Proposal. Read our summary here.

The HFSC Subcommittee on Financial Institutions and Monetary Policy held a hearing to discuss the increased issuance of federal regulatory proposals and their impact on the American economy. Read our summary here

Federal Deposit Insurance Corporation (FDIC) Chairman Martin Gruenberg delivered remarks on the financial stability risks of nonbank financial institutions (NBFIs). Chairman Gruenberg discussed nonbank financial institutions’ – often referred to as “shadow banks” – role during the global financial crisis and pandemic, as well as some of the current financial stability risks posed by certain NBFIs. Additionally, Chair Gruenberg highlighted recent Financial Stability Oversight Council (FSOC) proposals to help address risks in the financial system. 

The Consumer Financial Protection Bureau (CFPB) issued guidance about certain legal requirements that lenders must adhere to when using artificial intelligence and other complex models. The guidance describes how lenders must use specific and accurate reasons when taking adverse actions against consumers, meaning that creditors cannot simply use CFPB sample adverse action forms and checklists if they do not reflect the actual reason for the denial of credit or a change of credit conditions. 

Need to catch up on what happened last week? Check out our Midweek Update here