The Senate Committee on Banking voted 14-9 to advance the Secure And Fair Enforcement Regulation (SAFER) Banking Act, which would ensure that all businesses—including State-sanctioned cannabis businesses—have access to deposit accounts, insurance and other financial services, among other things. Next, the bill will head to the Senate floor where it is expected to pass.
Notably, two amendments to the legislation were rejected:
Sen. Raphael Warnock (D-GA) offered an amendment that would sunset the SAFER Banking Act after five years unless the Department of Treasury, in consultation with other agencies, submits a report to Congress certifying that the measure has decreased the racial wealth gap and ameliorated other negative economic impacts of the War on Drugs.
Sen. Mike Crapo (R-ID) offered an amendment to remove and replace Section 10 of the bill with language that stipulates federal regulators cannot pressure financial entities to “refuse to provide services to a lawful entity” unless that business is engaged in “unsafe and unsound practices.”
President Biden nominated Tanya F. Otsuka, Senior Counsel for the Senate Committee on Banking, Housing, and Urban Affairs to be a Member of the National Credit Union Administration (NCUA) Board for a term expiring August 2, 2029, to replace NCUA Board Member Rodney Hood, whose term expired. Senate Banking Chair Sherrod Brown supported the nomination.
U.S. Secretary of the Treasury Janet L. Yellen convened a meeting of the Financial Stability Oversight Council (Council) in executive session at the U.S. Department of the Treasury (Treasury). In addition to an update on international market developments and macroeconomic financial conditions in China, Council members received an update from Treasury staff on the public comments received on the Council’s proposed analytic framework for financial stability risk identification, assessment, and response and the Council’s proposed interpretive guidance regarding nonbank financial company determinations. The Council will continue to consider the public comments as it works toward finalizing the two documents.
The Consumer Financial Protection Bureau (CFPB) released its annual report on residential mortgage lending activity and trends. The report finds that in 2022, mortgage applications and originations declined markedly from the prior year, while rates, fees, discount points, and other costs increased. Overall affordability declined significantly, with borrowers spending more of their income on mortgage payments and lenders more often denying applications for insufficient income. Read the report here and CFPB Director Rohit Chopra’s statement here.
The Office of the Comptroller of the Currency (OCC) reported on the performance of first-lien mortgages in the federal banking system during the second quarter of 2023. The OCC Mortgage Metrics Report, Second Quarter 2023 showed that 97.3 percent of mortgages included in the report were current and performing at the end of the quarter, compared with 97.6 percent in the first quarter 2023. Performance improved compared to the second quarter of 2022 when 97.0 percent of mortgages were current and performing.
The Federal Deposit Insurance Corporation (FDIC) announced it signed a Cross-Border Resolution Memorandum of Understanding (MOU) and a Cooperative Arrangement (CA) with the Korea Deposit Insurance Corporation (KDIC), which would enhance mutual cooperation and exchange between the two organizations.
Federal Reserve Board (FRB) Governor Michelle Bowman delivered welcoming remarks at the FedCommunities event “Keys to Opportunity in the Housing Market: Research on Strategies for Preserving and Expanding Rental Housing Affordability.” Governor Bowman discussed the affordability of rental housing and exploring potential strategies to address this issue.
Agustín Carstens, General Manager of the Bank for International Settlements (BIS), delivered a speech discussing the role of central banks in regulating and supervising the payments system, controlling economies’ unit of account, providing for settlement finality, underpinning the banking system’s solvency, and acting as a lender of last resort. He criticized the use of unbacked cryptocurrencies and stablecoins as money, stating they do not offer the backing and protection of a central bank and the features that instill trust in central banks. “They do not and cannot meet the standards the public expects of money,” he said. General Manager Carstens also discussed central banks’ exploration in wholesale and retail central bank digital currency (CBDC) projects and the importance of a legal framework that contains three core elements: privacy, integrity, and users’ ability to choose between CBDC and other forms of money.
Andrea Enria, Chair of the Supervisory Board of the European Central Bank, gave a speech entitled “Banking Supervision Beyond Capital” at the EUROFI 2023 Financial Forum organized in association with the Spanish Presidency of the Council of the EU. Chair Enria discussed capital advocacy and international capital requirement standards.
The Federal Trade Commission (FTC) published a Consumer Alert on what individuals should do if they are billed for an SBA EIDL or PPP loan that they do not owe.
The Financial Industry Regulatory Authority (FINRA) published a report from its September 13-14 Board of Governors meeting, where the Board discussed, among other things, updates on FINRA’s ongoing crypto asset-related regulatory work, the work of the Office of Regulatory Economics and Market Analysis (REMA), surveillance-driven compliance support tools—including Report Cards—that assist firms in detecting potential compliance problems early on, as well as FINRA’s increased proactive member firm engagement, education and intelligence-sharing with regard to cybersecurity. In addition, the Board received an overview of pending and final regulatory initiatives affecting member firms.
Senator Patty Murray (D-WA), Chair of the Senate Appropriations Committee, released a bipartisan Continuing Resolution to extend government funding through November 17, prevent a government shutdown at the end of the month, and allow work on full-year appropriations bills to continue. The Senate voted 77-19 in favor of the Continuing Resolution.
Senators Elizabeth Warren (D-MA), Bernie Sanders (I-VT), Martin Heinrich (D-NM), Ed Markey (D-MA), Sheldon Whitehouse (D-RI), and Jeff Merkley (D-OR) sent a letter to Secretary of the Treasury Janet Yellen and newly-appointed Treasury Climate Counselor Ethan Zindler, urging the Treasury Department to take key actions pertaining to climate and climate-related financial risk.
Representative Jennifer Wexton (D-VA) introduced a bill to require the Federal financial regulators to issue guidance encouraging financial institutions to work with consumers and businesses affected by a Federal Government shutdown. The guidance would instruct financial institutions to consider prudent efforts to modify terms on existing loans or extend new credit to help consumers and businesses affected by a shutdown, consistent with safe-and-sound lending practices, and to take steps to prevent adverse information from being reported and utilized in any manner that harms consumers.
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.
Need to catch up on what happened last week? Check out our End of Week Wrap Up here.