Washington Report 360 | March 9, 2018 | KPMG | US

Washington Report 360 | March 9, 2018

Washington Report 360 | March 9, 2018

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Key Highlights

  • Federal Reserve Vice Chair for Supervision Randal Quarles said that the Federal Reserve was working with multiple regulators to develop a proposal to make “material changes” to the regulations implementing the Volcker Rule to streamline and simplify the requirements.
  • The CFPB released the seventh in a series of Requests for Information, this time seeking comment on its rulemaking process.
     

Financial services policy news

Federal Reserve Vice Chair for Supervision Randal Quarles discussed opportunities for tailoring the application of enhanced prudential standards for foreign banking organizations as well as reducing the “compliance burden of the Volcker rule for foreign banks with limited U.S. operations and small U.S. trading books.” Quarles said the Federal Reserve is working with multiple regulators to draft a proposal that would make “material changes” to streamline and simplify the regulations implementing the Volcker Rule.

The Basel Committee published a report on its latest Basel III monitoring exercise, which found that as of June 2017 all G-SIBs met the Basel III capital requirements (as agreed at the end of 2015) as well as the LCR and NSFR liquidity requirements.

The Financial Stability Board published its Global Shadow Banking Monitoring Report 2017, which found that shadow banking activity grew by 7.6% in 2016 to $45.2 trillion for the 29 jurisdictions covered, representing 13% of total financial system assets in these jurisdictions.

The Financial Stability Board published updated data on correspondent banking relationships using data provided by SWIFT. The report found a reduction in the total number of active correspondents from June 2016 to June 2017 but no decline in the payment volume or the underlying value of the messages processed through SWIFT.

The IOSCO proposed for public consultation eight recommendations to help trading venues and regulators implement mechanisms to manage extreme volatility in the securities markets.

The SEC released a Public Statement warning that many online cryptocurrency trading platforms are not registered with the SEC as they are required to do if they allow trading of digital assets that qualify as “securities” under the federal securities laws.

A U.S. District Court issued a Preliminary Injunction Order against a defendant and his company that confirmed the CFTC can regulate virtual currencies as a commodity; the CFTC defined virtual currencies as commodities in 2015.

Financial services legislative and regulatory news

The CFPB released the seventh in a series of Requests for Information, this time seeking comment on its rulemaking processes, including outreach and information gathering, the SBREFA process, and proposed and final rulemakings.

The Federal Reserve issued a request for comments on amendments to simplify Regulation J (Collection of Checks and Other Items) and make it conform with the 2017 amendments to Regulation CC (Availability of Funds), which updated the regulation to reflect the evolution of the check collection system to an electronic system.

FINRA updated the criteria for designating firms reporting to TRACE to participate in mandatory business continuity/disaster recovery testing.

The Federal Financial Institutions Examination Council (FFIEC) issued an updated guide to HMDA reporting.

The House of Representatives passed:

  • H.R. 4607, the Comprehensive Regulatory Review Act, which would add the CFPB and NCUA to the EGRPRA review process and change the review cycle from ten to seven years.
  • H.R. 2226, the Portfolio Lending and Mortgage Access Act, which would allow certain mortgage loans that are originated and retained in portfolio by an insured depository institutions with less than $10 billion in total consolidated assets to be considered as qualified mortgages.
  • H.R. 4725, the Community Bank Reporting Relief Act, which would allow a reduced call report for depository institutions with $5 billion or less in consolidated assets.
     

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