U.S. Financial Regulatory Week Ahead
July 1 - 5, 2024
It is about to be the quietest week of the summer in Washington. Independence Day is on Thursday, and everyone is taking the whole week off. And after all the massive legal fireworks that happened last week, we (and virtually all financial regulators) badly need it.
If you haven't caught up yet, the U.S. Supreme Court handed down two pivotal decisions that significantly impacted regulators. The more seismic of the two rulings was the dismantling of the Chevron deference, a 40-year-old doctrine that mandated federal judges to defer to regulatory agencies 'reasonable' interpretation of 'ambiguous' federal laws.
What are the implications of Chevron's reversal? For those celebrating the ruling, "regulatory creep" in Washington is now in check. Hard stop. What we are curious about is what happens next – do we see a flood of lawsuits from various business organizations challenging regulations that have been put in place over recent years due to the Chevron deference? That could shake the financial regulatory framework to its core.
The second case saw the Supreme Court rebuking the Securities and Exchange Commission's use of their in-house court to resolve certain enforcement disputes. The 6-3 decision, hailed by conservative groups, is a significant rollback of 'regulatory creep' at the SEC. Practically, it means a defendant can compel the SEC to take their case to a jury trial – a costly, labor-intensive action that could deter the Commission from initiating a case.
Elsewhere, life does not get any easier for FDIC Chair Marty Gruenberg. The National Treasury Employees Union (NTEU) – which represents FDIC staff – is fighting Gruenberg's efforts to get employees back into the office. Last Friday, Gruenberg issued a new order requiring employees to show up at least two days a week, effective July 15. The NTEU says the order is illegal, and Gruenberg had not consulted with the union, accusing Gruenberg of "bad faith bargaining." At this point, you must think Gruenberg cannot wait to get out of the FDIC.
And there was the release of the annual stress test results from the Federal Reserve. All 31 banks passed the test – which gave an opening to virtually all the major bank trade groups to argue this is further evidence the Fed's proposed bank capital rule is not necessary.
Speaking of the proposed bank capital rule – the Fed began shopping around a "revised" (read: scaled back) version of the rule. The revision has not been seen publicly yet, but the rumor is the proposal will scale back the capital increase number to 5 percent from the original 16 percent plus, but our guess is two things will happen: Progressive Democrats in Congress will not be happy with it, and bank trade groups will not be satisfied, either, saying it was not scaled back enough. The fight will continue.
As for what is happening this coming week, the only two events or speeches we could find scheduled among financial regulators are overseas: Fed Chair Jay Powell will attend the European Central Bank Forum in Portugal, and CFTC Commissioner Caroline Pham will participate in a conference in Zurich.
Below is a listing of what is happening at the financial regulatory agencies this week and in Congress. Please let us know if you have any questions.
Below is a full listing of what is happening at the financial regulatory agencies this week and in Congress. Please let us know if you have any questions.
U.S. Congressional Hearings
U.S. Senate
The Senate is out of session for the July 4 holiday and returns July 8.
House of Representatives
The House is out of session for the July 4 holiday and returns July 8.
Joint Committees
Congress is out of session for the July 4 holiday and returns July 8.
US Regulatory Meetings & Events
Federal Reserve Board and Federal Reserve Banks
Tuesday, July 2, 9:30 a.m. (Portugal time) – Federal Reserve Chair Jerome H. Powell will participate in a policy panel discussion at the European Central Bank (ECB) Forum on Central Banking 2024, Sintra, Portugal.
U.S. Treasury Department
There are no significant events scheduled at this time.
Securities and Exchange Commission
There are no significant events scheduled at this time.
Commodities Futures Trading Commission
Wednesday, July 3, 10:00 a.m. Zurich Time – CFTC Commissioner Caroline D. Pham will participate in a panel titled “Navigating and making sustainable the Al and DLT paradigm shift: Challenges and opportunities in the financial services market” at the Point Zero Forum in Zurich, Switzerland. Later in the day (11:50 a.m. Zurich time) she will participate in a “Capital Meets Policy” dialogue on the global AI regulatory landscape. And then at 1:30 p.m. Zurich time, Commissioner Pham will participate in a panel discussion entitled “Global policymakers’ dialogue on state of CBDCs and digital money regulations.”
FINRA
There are no significant events scheduled at this time.
Federal Deposit Insurance Corporation
There are no significant events scheduled at this time.
Office of the Comptroller of the Currency
There are no significant events scheduled at this time.
The Consumer Financial Protection Bureau
There are no significant events scheduled at this time.
National Credit Union Administration
There are no significant events scheduled at this time.
Federal Trade Commission & Department of Justice Antitrust Division
Monday, July 1, 11:00 a.m. – The FTC will hold a Closed Commission Meeting.
Farm Credit Administration
There are no significant events scheduled at this time.
International Monetary Fund & World Bank
There are no significant events scheduled at this time.
North American Securities Administrators Association
There are no significant events scheduled at this time.
Trade Associations & Think Tank Events
Trade Associations
Tuesday, July 2, 10:30 a.m. – The Institute for International Finance holds an online event entitled “Enhancing Debt Sustainability and the Investment Environment: The Latin American Context.”
Think Tanks and Other Events
Monday, July 1, 1:00 p.m. – The Atlantic Council's GeoEconomics Center holds a virtual event, beginning at 1 p.m., on "marking the 80th anniversary of the opening of the Bretton Woods Conference.
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