Fulcrum Perspectives

An interactive blog sharing the Fulcrum team's policy updates and analysis, as well as book recommendations, travel observations, and cultural experiences - all of which we hope will be of interest to you.

Francis Kelly 7/28/24 Francis Kelly 7/28/24

U.S. Financial Regulatory Week Ahead

July 29 - August 2, 2024

The Dog Days of Summer in Washington Haven’t Quite Started Just Yet

Last week we said Washington’s financial regulatory world was entering the dog days of summer. That might have been a bit premature. First, we saw former President Donald Trump address the Bitcoin 2024 Conference in Nashville, Tennessee, where he promised to fire SEC Chair Gary Gensler and create a “strategic national bitcoin stockpile.” Financial regulation has now officially entered the 2024 presidential election debate!

Then, we saw the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) issued a request for information from the industry on bank’s partnerships with fintech firms. Specifically, the regulators want to hear about how banks are maintaining “effective risk management practices.” They also separately issues a joint-statement reminding banks’ of the potential risks of working with third-party companies that provide bank despot products and services.

The same trio of bank regulators also issued a notice requesting comment on interagency efforts to reduce regulatory burdens, focusing on consumer protection, the role of directors, officers, and employees, and money laundering.

Also this past week, FDIC Vice Chair Travis Hill stepped up and made a public call for scrapping the pending bank capital rules and starting over from scratch and not simply making modifications to the draft. He went on to argue the Basel-mandated rules, as currently drafted, may not be legal. Hill then presented a vision for a number of important bank regulatory issues. If former President Trump is elected, Hill is seen as his choice as FDIC Chair.

The Federal Courts were also active this past week as a federal judge in Texas stayed the long-suffering Department of Labor’s fiduciary rule.

Looking at the week ahead, the FDIC is holding an Open Meeting to consider new rules on industrial loan companies and brokered deposits. And the SEC is holding a Small Business Capital Formation Advisory Committee.

Up on Capitol Hill, the Senate Agriculture Committee is tentatively planning to mark up a crypto regulatory bill while the Senate Banking Committee might vote on the nomination of Christy Goldsmith Romero to be FDIC Chair (much depends on whether recently convicted Senator Bob Menendez (D-NJ), a member of the committee, will show up to vote. Following his recent federal bribery conviction, Menendez said he would resign.

But what will likely be the best event this week will be Capitol Account’s event in the Capitol Visitors Center. SEC Commissioner Mark Uyeda will participate in a fireside chat, giving great insights into the SEC’s agenda for the rest of the year and what to expect in the wake of the Chevron decision. You can watch it virtually, but you have to register, which you can do by clicking HERE.

Below is a listing of all the other significant regulatory-related events this coming week:

U.S. Congressional Hearings

U.S. Senate

Tuesday, July 30, 10:00 a.m. – The Senate Finance Committee holds a hearing entitled “Tax Tools for Local Economic Development.”

Tuesday, July 30, 10:00 a.m. – The Senate Commerce, Science and Transportation Tourism, Trade, and Export Promotion Subcommittee holds a hearing on "Enabling Rural Businesses to Grow at Home While Competing Abroad."

Tuesday, July 30, 2:30 p.m. – The Senate Banking Committee’s Economic Policy Subcommittee holds a hearing entitled “Banning Noncompete Agreements: Benefits for Workers, Businesses, and the Economy.”

Wednesday, July 31, TBD – The Senate Agriculture Committee is tentatively planning to hold a markup of Committee Chair Senator Debbie Stabenow’s (D-MI) draft crypto bill.

Wednesday, July 31, TBD – Senate Banking Committee Chair Sherrod Brown (D-OH) is floating the idea of voting to advance FDIC Chair-nominee Christy Goldsmith Romero’s nomination. However, with the pending resignation of Senator Bob Menendez (D-NJ following his recent criminal conviction, the committee will be one Democratic vote shy, and at this point, it appears there are no committee Republicans known to support the nomination. It is not clear if Menendez will show up or not. Also likely to be included in the vote would be the advancement of the nominations of Caroline Crenshaw to be an SEC Commissioner and current CFTC Commissioner Kristin Johnson to be an Assistant Secretary of the Treasury, and Gordon Ito to be a member of the FSOC.

House of Representatives

The House is out for the month of August. No events are scheduled at this time.

US Regulatory Meetings & Events

Federal Reserve Board and Federal Reserve Banks

Tuesday & Wednesday, July 30 – 31 – The Federal Reserve Board’s Federal Open Market Committee meets for two days to discuss the economy and interest rates. Fed Chair Jay Powell will hold a press conference at 2:00 p.m. on July 31.

U.S. Treasury Department

Tuesday, July 30, 9:00 a.m. – The Treasury Department holds a closed meeting of the Debt Management Advisory Committee to discuss topics related to the economy, financial markets, Treasury financing, and debt management, followed by a written report of its recommendations from the committee.

Thursday, August 1, 2:00 p.m. – The Treasury Department’s Advisory Committee on Risk-Sharing Mechanisms meets. The agenda for the meeting includes: Presentations addressing the Federal Insurance Office's partnership with the National Science Foundation to establish a new Industry-University Cooperative Research Center to provide research, analysis, and thought leadership to improve the insurance sector's modeling and underwriting of terrorism and catastrophic cyber risks; Hear a presentation by FIO staff on the 2024 Report on the Effectiveness of the Terrorism Risk Insurance Program and the International Forum of Terrorism Risk (Re)Insurance Pools Conference hosted by FIO in April 2024; and Roundtable discussion by the members to provide industry insight on the effectiveness of TRIP, terrorism insurance market conditions, ideas for private market risk-sharing mechanisms that can offset losses arising from acts of terrorism, and the administration of TRIP.

Department of Commerce

Thursday, August 1, 2:00 p.m. – The Commerce Department Economic Development Administration holds a virtual meeting of the National Advisory Council on Innovation and Entrepreneurship to discuss strategies to unlock sources of capital to leverage federal investments and designations, including current and future tech hubs, aligned with the Commerce Department's existing work in this area.

Securities and Exchange Commission

Tuesday, July 30, 10:00 a.m. – The SEC holds its Small Business Capital Formation Advisory Committee meeting. The Committee will continue its exploration of ways to expand access to early-stage capital raising and support underrepresented emerging fund managers, the Committee will explore recent changes to the SBIC program designed to increase access and diversify funding for small businesses, start-ups, and fund managers. The full agenda can be accessed HERE.

Thursday, August 1, 2:00 p.m. – The SEC holds a Closed Meeting.

Commodities Futures Trading Commission

There are no significant events scheduled at this time.

FINRA

There are no significant events scheduled at this time.

Wednesday, July 30, 10:00 a.m. – The FDIC Board of Directors will hold an Open Session. You can find the full agenda HERE, which includes proposed rulemakings on brokered deposits, parent companies of Industrial Banks, and several other items.

Office of the Comptroller of the Currency

Thursday, August 1, 10:00 a.m. – The OCC, along with the FDIC and New York Department of Financial Services, are holding a Bankers Roundtable entitled “Access to Financial Products and Services for the Unbanked and Underbanked” in New York.

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

Wednesday, July 31, 10:00 a.m. – The FTC holds a hearing before the FTC’s Administrative Law Judge regarding the proposed merger of Kroger Company and Albertsons Companies.

Thursday, August 1, 10:00 a.m. – The FTC holds an Open Commission meeting to discuss Pharmacy Benefit Managers Report and their impact to access and affordability of medicines and then receive a presentation on Military Consumer Production.

Thursday, August 1, 3:30 p.m. – The FTC and the Department of Justice Antitrust Division will jointly hold a the first public hearing of the Strike Force on Unfair and Illegal Pricing.

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

There are no significant events scheduled at this time.

Think Tanks and Other Events

Tuesday, July 30, 10:00 a.m. – Capitol Account holds an event on investment advisers’ rules sponsored by Charles Schwab. SEC Commissioner Mark Uyeda participates in a fireside chat, An industry panel discussion features Jon Beatty, Head of Advisor Services, Charles Schwab; Karen Barr, President, Investment Adviser Association; James J. Burns, CEO/President, JJ Burns & Company and Stephen Johnson, Chief Counsel Wealth & Asset Management Legal Group, Charles Schwab. Location: Capitol Visitor Center, room SVC 215. Pre-registration is required for people without congressional identification. Click here to sign up.

Tuesday, July 30, 12:00 p.m. – The Federalist Society for Law and Public Policy Studies holds a virtual discussion, beginning at 12 p.m., on "Debanking: The Newest Threat to Free Speech and Religious Liberty?"

Wednesday, July 31, 6:00 p.m. – Axios holds a discussion on "Investment for Improvement," focusing on "how corporate investment in the economy can impact and reflect broader market trends, affect long-term inflation and drive financial growth for specific sectors and consumers."

Wednesday, July 31, 12:00 p.m. – The Competitive Enterprise Institute holds a "Lunch Briefing: De-Weaponization of Financial Regulation."

Please let us know if you have any questions or would like to be added to our email distribution list.

Francis Kelly 7/21/24 Francis Kelly 7/21/24

U.S. Financial Regulatory Week Ahead

July 22 - 26, 2024

The Dog Days of Summer are upon us in Washington. There is not much happening this coming week regulatory-wise, but we would note there are some interesting congressional hearings.

Of particular note, the Senate Permanent Subcommittee on Investigations (PSI) will hold a hearing on Zelle Fraud. Senior executives from Bank of America, J.P. Morgan, and Wells Fargo will testify about what exactly happened. PSI is an unusual Subcommittee in Congress with special powers to conduct deep investigations into virtually anything. But is long has been a source of intense investigations into financial services related fraud, its hearings can and often do lead to criminal indictments down the road from the US Department of Justice.

Also, this week, the Senate Banking Committee is holding a hearing about “Advancing National Security through Export Controls, Investment Security, and the Defense Production Act.” While a good piece of the hearing will likely focus on the national security aspects of trade with China, sanctions on Russia, and other related issues, we think there is a good chance this will quickly veer into aspects of Nippon Steel’s ongoing bid to acquire U.S. Steel. Considering the Chair of the Banking Committee is Senator Sherrod Brown (D-Ohio), a fierce critic of the deal who is in the re-election battle of his career, we cannot see him not taking the opportunity to speak out against the deal.

Finally, we will be watching FDIC Vice Chair Travis Hill speak this week at the American Enterprise Institute on proposed changes to banking regulation and resolution policies. If President Trump is elected in November, many see Hill as the natural choice to be the next FDIC Chair, so this could be a preview of his agenda in 2025.

Below is a listing of all the other significant regulatory-related events this coming week:

U.S. Congressional Hearings

U.S. Senate

· Tuesday, July 23, 3:30 p.m. – The Senate Permanent Subcommittee on Investigations holds a hearing on Zelle fraud, featuring executives from JPMorgan Chase, Bank of America, and Wells Fargo.

· Thursday, July 25, 10:00 a.m. – The Senate Banking Committee holds a hearing entitled “Advancing National Security through Export Controls, Investment Security, and the Defense Production Act.”

House of Representatives

· Tuesday, July 23, 10:00 a.m. – The House Agriculture Committee holds a hearing on "Financial Conditions in Farm Country."

· Tuesday, July 23, 10:00 a.m. – The House Financial Services Committee holds a hearing entitled “AI Innovation Explored: Insights into AI Applications I Financial Services and Housing.”

· Wednesday, July 24, 10:00 a.m. – The House Financial Services National Security, Illicit Finance, and International Financial Institutions Subcommittee holds a hearing on "Wasteful Spending and Inefficiencies: Examining DoD Platform Performance and Costs."

· Wednesday, July 24, 10:30 a.m. – The House Financial Services Committee holds a hearing on "Housing Solutions: Cutting Through Government Red Tape."

· Thursday, July 25, 8:30 a.m. – The House Agriculture Commodity Markets, Digital Assets, and Rural Development Subcommittee holds a hearing on "Reauthorizing the CFTC: Stakeholder Perspectives."

US Regulatory Meetings & Events

Federal Reserve Board and Federal Reserve Banks