January 7, 2022

Jelena McWilliams, Chair of the Federal Deposit Insurance Corporation (FDIC), announced on December 31 her intention to resign from the agency. While not cited as the reason for her departure, the announcement follows weeks of turbulence within the FDIC’s Board of Directors over a proposal to request information by the FDIC from the public on bank mergers and acquisitions. The proposal was developed and endorsed by the Democratic majority and published by the CFPB without the support of Chair McWilliams, who claimed the proposal was not properly adopted by the FDIC. Meanwhile, as this was occuring, Senate Banking Committee Republicans sent a letter to President Joe Biden urging him to rebuke CFPB Director Rohit Chopra and FDIC board member Martin Gruenberg “for their attempt to politicize the FDIC and compromise its neutrality and independence by disregarding its bylaws and its historical practice of conducting agency business through the chairman.” McWilliams’ departure will be effective February 4th, and FDIC Board Member Martin Gruenberg will become Acting Chair. See our memo on the latest developments at the FDIC.

President Biden is considering nominating Sarah Bloom Raskin, who previously served as a Member of the Federal Reserve System Board of Governors (the Fed) and Deputy Secretary at the Department of the Treasury, both during the Obama Administration, for Vice Chair of Supervision at the Fed.

The CFPB said in a report that consumers submitted more than 700,000 complaints to the agency about the top credit rating agencies between January 2020 and September 2021. Concerns about credit reporting companies accounted for more than 60 percent of the complaints the agency received last year.

Mexico’s Federal Government announced on Twitter it plans to have its own central bank digital currency (CBDC) in circulation by 2024 as part of efforts to boost financial inclusion. The tweet also said, “these new technologies and the next-generation payment infrastructure are extremely important as options of great value to advance financial inclusion in the country.”

The CFTC settled charges against crypto prediction markets platform Polymarket $1.4 million for offering to U.S. investors the ability to buy, sell, and exchange off-exchange event-based binary options contracts (ie., swaps) without registering as a designated contract market (DCM) or swap execution facility (SEF).

Senator Elizabeth Warren stated that cryptocurrencies are not a real path toward financial equality and that bitcoin ownership is more concentrated among the wealthy than dollars. “We need real solutions to make the financial system work for everyone, not just the wealthy,” Warren, who represents Massachusetts, said in a tweet.

The CFPB ordered major buy now, pay later firms – Affirm, Afterpay, Klarna, PayPal, and Zip – to provide information about how consumers are using their products, debt accumulation based on product use, how consumers’ data is being used, and compliance with regulatory requirements on December 16. The firms must respond by March 1, 2022. As of Wednesday, December 22nd, the Securities and Exchange Commission (SEC) has hired Corey Frayer, a former Senior Professional Staff Member of the Senate Committee on Banking, Housing, and Urban Affairs, to focus on cryptocurrency policy.