Washington Report 360 | May 31, 2019

Continued focus on CRA; Fannie Mae and Freddie Mac to return to private-shareholder ownership; continued focus on leveraged lending

Key highlights

  • Continued focus on Community Reinvestment Act with potential changes “soon.”
  • Administration plans to return Fannie Mae and Freddie Mac to private-shareholder ownership.
  • Leveraged lending continues to be a focus of public policy attention.

Financial services legislative and regulatory news

Community Reinvestment Act (CRA):

  • The federal banking agencies indicate changes to the CRA “soon” (American Banker) and published state loan-to-deposit ratios (Riegle-Neal section 109).
  • The FDIC and OCC issued third and fourth quarter 2019 CRA examination schedules.

Administration officials are finalizing a plan to return Fannie Mae and Freddie Mac to private-shareholder ownership. (WSJ)

The House Financial Services Committee will conduct a hearing on June 4 on Emerging Threats to Stability: Considering the Systemic Risk of Leveraged Lending.

The federal banking agencies issued a final rule regarding the treatment of certain municipal obligations as high-quality liquid assets.

The CFTC will propose rules that allows it to act extraterritorially when swaps activity has a “direct and significant connection with activities in, or effect on, commerce in the US.” (MarketsMedia, Thomson Reuters)

The State of New Jersey proposed rules that would impose a fiduciary duty on all financial services professionals licensed in the state. (PlanAdviser)

Financial services policy news

The New York Federal Reserve Bank will host a conference on Building Cultural Capital in the Financial Services industry on June 4.

The OCC will combine supervision and examination of large, midsize, and community banks into a single supervisory platform “by next year.” (American Banker)

CPMI and IOSCO concluded that the U.S. has fully implemented the PFMI for payment systems, central security depositories, and securities settlement systems.

The FSB:

  • Published a peer review examining implementation of the Legal Entity Identifier (LEI).
  • Requested public input on the impact of “too-big-to-fail” reforms.
  • Published a report on work to address crypto-asset risks.

Correspondent banking relationships:

  • The CPMI (Committee on Payments and Market Infrastructure) published an analysis of correspondent banking relationships declines.
  • The FSB published two reports related to declines in correspondent banking.

Cyber security:

  • The BIS General Manager outlined areas for cyber international cooperation.
  • The FSB provided the G20 with a progress report on development of a cyber incident toolkit.