Washington Report 360 | June 22, 2018

Key highlights

• The Fed issued its stress test results for 35 firms, finding overall that the bank holding companies are “strongly capitalized and would be able to lend to households and businesses during a severe global recession."
• Concurrently (and consistent with the EGRRCPA), the Fed announced that bank holding companies with less than $100 billion in total consolidated assets are no longer subject to supervisory stress testing, including DFAST and CCAR.
• The U.S. government did not appeal a federal appeals court decision vacating the U.S. Department of Labor’s Fiduciary Rule, effectively terminating the rule.
• President Trump nominated Kathy Kraninger to serve as director of the Bureau of Consumer Financial Protection; the nomination goes to the Senate for consideration. Mick Mulvaney may continue to serve as acting director during the confirmation process.

Financial services legislative and regulatory news

The Fed issued its eighth round of stress tests for 35 firms (representing approximately 80 percent of the U.S. bank assets), finding overall that the bank holding companies are “strongly capitalized and would be able to lend to households and businesses during a severe global recession." Results from the related Comprehensive Capital Analysis and Review (CCAR) will be released on June 28.

The Fed announced that bank holding companies with less than $100 billion in total consolidated assets are no longer subject to supervisory stress testing; the change is consistent with the Economic Growth, Regulatory Reform, and Consumer Protection Act (EGRRCPA).

The U.S. government did not appeal a federal appeals court decision vacating the U.S. Department of Labor’s Fiduciary Rule, according to news reports; the deadline for appeal was June 13. This leaves the SEC's proposed Regulation Best Interest as the possible standard for broker-dealers when making investment recommendations.

The SEC's Division of Investment Management updated its FAQs on the Custody Rule to address questions related to its 2017 guidance on inadvertent custody.

The OCC issued a bulletin clarifying its policies and processes on performance evaluations for the Community Reinvestment Act.

Financial services policy news

President Trump nominated Kathy Kraninger of the Office of Management and Budget to serve as director of the BCFP. The nomination will now be considered by the Senate and Mick Mulvaney will continue as acting director until a director is confirmed.

The FTC announced a series of public hearings starting in September to consider possible changes to competition and consumer protection enforcement law, priorities, and policy resulting from evolving business practices, technologies, and international developments.

Sen. Pat Toomey indicated a desire to take up housing finance reform in the next Congress, particularly addressing Fannie and Freddie government conservatorship.

FDIC Chair Jelena McWilliams said she plans to review the CAMELS rating system, supports easing living will requirements, and opposes using guidance in place of formal rules, according to news reports.

The BIS released two chapters of its Annual Economic Report in advance of the full report; one said that macroprudential measures should extend to additional financial firms, including fintechs and asset fund managers while the other looked at risks associated with cryptocurrencies.

The FSB published two final guidance documents on implementing GSIB resolution regimes.

The SEC published a draft strategic plan on SEC priorities through FY 2022 that focuses on serving investors, becoming more innovative, and improving agency performance.