Insight
Final revisions to the Volcker Rule; FRB considering imposing Countercyclical Capital Buffer; Recent attention to diversity.
Key highlights
- An SEC Risk Alert highlights compliance issues observed during examinations of investment advisers that employ individuals with disciplinary events.
- New York State Governor signs the SHIELD Act, which expands data breach notification requirements.
- Market participants are reviewing FTC privacy enforcement requirements, including the creation of a board-level privacy committee, designation of privacy compliance officers, and certification by the CEO.
- The Antitrust Division of the Department of Justice has announced it is reviewing whether “market-leading online platforms” are engaging in practices that may have “reduced competition, stifled innovation, and otherwise harmed consumers.”
- Five regulatory agencies (FRB, OCC, FDIC, SEC, and CFTC) are expected to release final revisions to the Volcker Rule as early as next week. The revisions reportedly include a new definition of “proprietary trading” and revisions that include loosened restrictions on banks investing their own money in private equity and hedge funds.
- FRB is considering imposing the Countercyclical Capital Buffer to increase capital requirements for large banking organizations as an offset to potential losses from elevated risk; the buffer would be reduced when economic conditions deteriorate to support lending and broader economic activity.
- Recent attention to diversity, including a Congressional data study at megabanks, a FRBNY report finding disparities in small business credit, and a NCUA focus on minority depository institutions.
Financial services regulatory and policy news
Banking
- Regulators close to unveiling Volcker revamp: Sources
American Banker, August 13, 2019 - Fed Considers New Tool for a Downturn (countercyclical capital buffer)
WSJ, August 13, 2019 - Regulators may end CRA credit for loans to wealthy in low-income neighborhoods: OCC's Otting says
American Banker, August 9, 2019 - Agencies issue annual host state loan-to-deposit ratios
FRB, OCC, FDIC, August 13, 2019 - Research Paper: Liquidity Transformation Risks in U.S. Bank Loan and High-Yield Mutual Funds
Finding more pronounced effect during stress periods
FRB, August 9, 2019 - Report: Small Business Credit Survey of Nonemployer Firms
Findings include racial disparities in reported access to financing
FRBNY, August 14, 2019 - Report: Household Debt and Credit
Finding household debt rises for 20th straight quarter, mortgage delinquencies fall, credit card delinquencies rise
FRBNY, August 13, 2019
Capital markets
- FINRA seeks comment on rules and issues relating to financial abuse of senior investors
FINRA, August 9, 2019
Other
- New NCUA chief puts diversity, cybersecurity atop priority list
American Banker, August 12, 2019
- Subcommittee data study finds more work needed to improve diversity at megabanks
House FS Committee, August 13, 2019 - Three House committee chairs request information from CFPB on efforts to protect student loan borrowers
House Financial Services Committee, August 13, 2019 - Basel Committee publishes FAQs on Basel III standardized approach for operations risk
BIS, August 14, 2019
Industry news
- Apple Card fortifies the digital model, and that's trouble for banks
American Banker, August 9, 2019 - Why Walmart's cryptocoin is getting a warmer welcome than Facebook's
American Banker, August 12, 2019
- New Fed Rate Pulls Ahead in Race to Replace Libor
WSJ, August 12, 2019
- Federal Prosecutors Accuse Capital One Hacker of Hitting Dozens More Targets
WSJ, August 14, 2019
