Key Highlights
- The heads of six large banking institutions provided testimony before the Senate Banking Committee and the House FS Committee; wide-ranging topics raised by Congress included loan modifications/foreclosures, ESG-related commitments (such as funding to CDFIs/MDIs and financing for fossil fuel industries), overdraft protections, financial inclusion, and alternatives to LIBOR.
- SEC testimony signaled increased regulatory attention to be directed toward IPOs, private funds, and crypto assets due to investor protection concerns and regulatory “gaps”.
- Ongoing attention to crypto assets seen in joint agency “sprint” (acknowledged in testimony by FRB Governor Quarles) and FRB remarks on CBDCs.
- In response to questions about “materiality” in the context of ESG disclosure, SEC clarified common “misconceptions” noting that issues material to investors may not be required to be disclosed or deemed material by companies, and that investors indicate ESG matters are material to their investment and voting decisions.
- A new IAIS paper provides tools and recommendations for insurance supervisors to strengthen efforts to assess and address risks from climate change.
Financial services regulatory and policy news
Banking
- Federal banking agencies (FRB, OCC, FDIC):
- Issued the host state loan-to-deposit ratios.
- FRB:
- Outlined efforts and considerations related to central bank digital currencies.
- Highlighted priorities on insurance regulation and supervision for NAIC conference.
- OCC:
- Finalized an interim rule creating an exception to withdrawal period requirements for certain collective investment funds.
- FDIC:
- Issued the Quarterly Banking Profile for Q1 2021, showing net income of $76.8 billion and declines in net interest margin and loan balances; related speech.
- CFPB:
- Released a report on the results and lessons learned from its Financial Coaching Initiative directed toward veterans and economically vulnerable consumers.
Capital Markets
- SEC:
- Spoke about “myths and misconceptions” of materiality in the context of ESG disclosure.
- Provided testimony at a House Appropriations Subcommittee hearing (Gensler testimony).
- Spoke about leveraging regulatory cooperation to protect investors.
Other
- House FS Committee hearings:
- Consumer credit reporting.
- Investor protections related to direct listings and public offerings.
- Holding megabanks accountable; practices, programs, and policies.
- Senate Banking Committee hearings:
- Oversight of Wall Street Firms.
- Semi-annual testimony of Federal Reserve supervision and regulation (Quarles testimony).
- SBA:
- Proposed to revise the small business size standard in two industrial sectors to increase eligibility for its loan programs.
- FHFA:
- Published a “first-of-its-kind” comprehensive dataset on mortgage risk from 1990-2019.
Insurance
- NAIC:
- Held its 2021 International Insurance Forum.
- IAIS:
- Published recommendations for insurance supervisors to strengthen efforts to address climate-related risks.
