The Washington Report For week ended February 09, 2018 | KPMG | US

Washington Report 360 | February 09, 2018

The Washington Report For week ended February 09, 2018

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Key Highlights

  • The CFPB placed its Office of Fair lending and Equal Opportunity under the direct authority of Acting Director Mulvaney and removed the Office’s enforcement authority.
  • The SEC released its 2018 examination priorities, which will focus on retail investors and cryptocurrencies, among other priorities.
  • The chairs of the CFTC and SEC testified before the Senate Banking Committee on the regulation of virtual currencies, noting growing importance for coordination among federal and state regulatory authorities.

 

Financial services policy news

The CFPB placed its Office of Fair lending and Equal Opportunity under the direct authority of Acting Director Mulvaney and removed the Office’s enforcement authority; the Office will now focus on “advocacy, coordination, and education.”

The SEC released its 2018 examination priorities, which will focus on critical market infrastructure, duties to retail investors including seniors, ICOs and cryptocurrencies, cybersecurity, and anti-money laundering programs.

CFTC Chairman J. Christopher Giancarlo and SEC Chairman Jay Clayton testified before the Senate Banking Committee on their oversight role for virtual currencies. They acknowledged gaps in their supervisory authority, discussed coordination with state authorities to avoid a “patchwork” of regulatory requirements, and noted the potential need for legislative action to develop a federal regulatory framework.

Consistent with his testimony before the Senate Banking Committee last week, Treasury Secretary Steven Mnuchin testified before the House Financial Services Committee on the FSOC's annual report to Congress.

The Senate Banking Committee advanced to the full Senate the nominations of Marvin Goodfriend to the Federal Reserve Board, Jelena McWilliams as chair of the FDIC, and Thomas Workman as the independent insurance member of the FSOC.

Jerome Powell was sworn in as Chairman of the Federal Reserve Board.

SIFMA joined several global securities and derivatives trade associations in issuing a roadmap on the key challenges in transitioning financial contracts and practices from interbank offered rates, such as LIBOR, to alternative risk-free rates.

A multi-state agreement to streamline FinTech licensing went into effect; participating states agree to accept another participating state's money services business licensing review in the areas of IT, cybersecurity, business plan, background check, and Bank Secrecy Act compliance. Notably, Jelena McWilliams, the nominee to chair the FDIC, has expressed support for the industrial loan company charter and some FinTech firms may seek to access the banking sector in this way.

A survey by the Federal Reserve Bank of Minneapolis found that losses from payments fraud across all payment types are a problem for more than 75 percent of the nearly 300 financial institution respondents; 96 percent of debit card issuers and 77 percent of credit card issuers reported such losses in 2016.

Financial services legislative and regulatory news

FINRA Rule 2165 (Financial Exploitation of Specified Adults) and amendments to Rule 4512 (Customer Account Information) addressing financial protections for seniors and other vulnerable adults took effect February 5, 2018.

FINRA is requesting comment on whether multiple existing rules should be applied to government securities, including U.S. Treasury securities.

Five federal agencies (the Federal Reserve, OCC, FDIC, FHFA, and the Farm Credit Administration) jointly proposed an amendment to their swap margin rules to conform to new restrictions on certain qualified financial contracts of systemically important banking organizations.

The CFPB released the third in a series of Requests for Information, this time seeking comment on its enforcement processes, including the timing and frequency of communications, length of investigations, calculation of civil money penalties, and coordination with other federal and state agencies.

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