Insight

Washington Report 360 | September 11, 2020

CFTC on cimate change; CFTC on compliance programs; DOJ reorganized its Civil Enforcement Program; FRB expanding lending facilities

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Amy S. Matsuo

Principal and National Leader, Regulatory Insights, KPMG US

+1 919-244-0266

CFTC’s Climate-Related Market Risk Subcommittee issued a paper on climate change urging financial regulators to take rapid, decisive action to manage the related risks, and highlighting the need for standardized data and analytical tools to measure climate-related financial risks. The paper contains 53 recommendations that may be indicative of evolving regulatory expectations.
Focus on core risk management evidenced by CFTC’s first-ever guidance on factors to be considered when evaluating compliance programs in connection with enforcement actions.
DOJ reorganized the Antitrust Division’s Civil Enforcement Program, including creating a new civil section dedicated to “financial services, fintech, and banking”.
Ongoing adjustments to expand the application of the FRB’s COVID-19-related emergency lending facilities

Banking

FRB:
- Issued to Congress its periodic report on outstanding emergency lending facilities
- Announced additional counterparties to support the CPFF and SMCCF, and expanded counterparty eligibility for the TALF and purchases of agency CMBS
- Updated the Municipal Lending Facility FAQs
OCC:
- Issued a bulletin on sound risk management principles for loan purchase activities
- Issued a revised "Federal Branches and Agencies" booklet of the Comptroller’s Licensing Manual
CFPB:
- Released a report on CFPB compliance with the Plain Language Act of 2010
- Issued Supervisory Highlights, covering findings in consumer reporting, debt collection, deposits, fair lending, mortgage servicing, and payday lending

Capital markets

CFTC:
- Released a report and recommendations on Managing Climate Risk in the U.S. Financial System
- Issued guidance, for the first time, on factors considered when evaluating compliance programs in connection with enforcement matters
FINRA:
- Updated its Transparency Services Uniform Executing Broker Agreement, which allows member firms to report trades on behalf of another member firm to a FINRA facility
- Released a report summarizing a study on financial risk-taking among older investors

Other

U.S. House Financial Services Committee:
- Held a hearing on banking regulators’ accountability for and commitment to diversity and inclusion

DOJ:
- Announced reorganization of the Antitrust Division’s Civil Enforcement Program, including a new section dedicated to “financial services, fintech, and banking”
- Sought public comment on whether to revise the 1995 Bank Merger Competitive Review guidelines to reflect emerging trends
- Issued an updated edition of the Merger Remedies Manual, which provides a framework to preserve competition in merger cases
HUD:
- Reminded localities that received COVID-19 emergency grant funding that they may use it to prevent evictions of individuals experiencing financial hardship
- Provided additional requirements and flexibilities for funding provided to states and local governments through the Emergency Solutions Grant Program under the CARES Act

FSB:
- Extended the implementation timelines for non-centrally cleared securities financing transactions