"Washington Report 360 | July 12, 2019"

Key highlights

• Agencies passed final rules easing regulatory requirements for small banks, including one simplifying certain capital rules for “non-advanced approaches” banks and another exempting community banks from the Volcker Rule.
• SEC and FINRA issued statements promoting investor protections in the context of settlements and investigations, respectively.

Financial services legislative and regulatory news

Federal banking agencies:

• Simplified capital rules for “non-advanced approaches” banks targeting mortgage servicing assets, deferred tax assets, and minority interests
• FRB, OCC, FDIC, SEC, and CFTC exempt community banks from Volcker Rule

SEC:

• SEC and CFTC propose to align margin requirements for security futures with similar financial products
• SEC and FINRA statement on broker dealer custody of digital asset securities
• Statement on settlement offers

FINRA:

• New guidance on credit for extraordinary cooperation in investigations
• New margin requirements for exchange-traded notes and related options
• Proposed rule change for OATS recording and reporting exemptions

Federal Reserve:

• Stress tests: Powell says they must evolve; Quarles says they should be more transparent and less volatile
• Staff paper: The Effects of Bank Capital Buffers on Bank Lending and Firm Activity: What Can We Learn from Five Years of Stress-Test Results?
• Quarles expects the Federal Reserve to advance bank rules easing large bank capital and liquidity requirements and portions of the Volcker Rule revisions this fall – Reuters, July 12, 2019

CFPB:

• Report on Sources and Uses of CFPB Data
• Data Point Report on revolving U.S. credit cards

Congress:

• Hearings on Facebook’s cryptocurrency project: Senate Banking Committee for July 16 and House FS Committee for July 17
• House passed seven FS Bills, including Whistleblower protections; House FS Committee passed ten bills, including bills addressing credit reporting and diversity and inclusion

Banking and Cannabis:

• How Nevada plans to solve the marijuana banking problem, Governing.com, July 12, 2019
• California cannabis banking bill moves closer to governor’s desk - North Bay Business Journal, July 9, 2019

Financial services policy news

Treasury statement on developments in U.S.-EU Financial Regulatory Reform

FSB:

• Technical review of TLAC Standard implementation
• Survey of Cyber Incident Response and Recovery

BIS:

• Plans for new Innovation Hub for central banks
• Assessment report on implementation of NSFR and large exposures framework