Washington Report 360 | July 31, 2020

Highlights

• The Federal Reserve Board committed to improving diversity and inclusion within its workforce.
• The Department of Labor proposed a rule that would clarify ERISA plan fiduciaries’ responsibilities and obligations with respect to ESG investments.
• Increasing attention to LIBOR transition seen in a joint statement from the federal banking agencies and CFTC approval of its plan to shift certain products to SOFR, referred to as the “single-step transition.”
• Actions related to ongoing need for COVID-19-related efforts, including FRB extension of emergency credit facilities, FINRA extension of temporary regulatory relief, and Congressional testimony by regulators.

Financial services regulatory and policy news

• Banking
  • Federal banking agencies (FRB, OCC, FDIC):
    • Highlighted risks resulting from the discontinuation of LIBOR
    • Proposed revisions to the Call Report and FFIEC 101 Report
  • FRB:
    • Committed to improving diversity and inclusion within its workforce
    • Extended the emergency lending facilities scheduled to expire on September 30 until December 2020
    • Reported on the emergency lending facilities
    • Finalized updates to its FOIA procedures and changes to its rules for disclosure of confidential supervisory information (CSI)
  • FDIC:
    • Adopted jointly with the SEC a final rule on the orderly liquidation of covered broker-dealers
    • Approved a final rule allowing greater employment opportunities in the banking industry for individuals with criminal records
  • CFPB:
    • Announced plans to issue an ANPR on consumer-authorized access to financial records
    • Requested information on how to expand access to credit and protect against discrimination in credit transactions
    • Testified before the Senate Banking Committee on the CFPB Semi-Annual Report

• Capital markets
  • SEC:
    • Created the Event and Emerging Risks Examination Team (EERT) to proactively engage with financial firms
    • Released a statement regarding new Form CRS disclosures
    • Testified before a House Financial Services Subcommittee on the SEC response to the effects of COVID-19 on U.S. capital markets
    • Outlined an initiative to enhance public access to private markets
  • CFTC:
    • Market Risk Advisory Committee approved the "single-step transition" to SOFR for certain products
  • FINRA:
    • Proposed temporary relief of certain rules to address COVID-19
• Other
  • DOL:
    • Proposed a rule clarifying plan fiduciaries may not sacrifice investment returns to promote social goals, such as certain ESG-oriented investments
  • NY DFS:
    • Announced opposition to the proposed DOL rule change impacting ESG investing
  • HUD:
    • Terminated the AFFH (Affirmatively Favoring Fair Housing) regulation and replaced it with a new regulation - Preserving Community and Neighborhood Choice
  • World Economic Forum
    • Released a report calling for a clear set of universally applied cybersecurity guidelines for fintech firms

Industry news

• PPP forgiveness plan leaves bankers wanting
• Libor transition: Loan market prefers lag over shift approach
• Term SOFR rate still possible this year, benchmark firms say
• California Bill Would Give Banks a Safe Harbor for Pot Business

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