Washington Report 360 | May 20, 2022

Securities fraud; Crypto and digital assets; False Claims/UDAAP

Securities fraud. The DOJ and SEC issued a multi-billion-dollar complex options trading enforcement settlement against an investment adviser and three individuals; charges include securities fraud, investment adviser fraud, and obstruction.
Crypto and digital assets. Market volatility in a stablecoin fund and various cryptocurrencies led to Treasury, SEC, and CFTC statements on the need for further regulation; Department of Commerce published an RFI for developing a framework on the competitiveness of digital asset technologies.
False Claims/UDAAP. In part due to rising use in the digital asset space, the FDIC issued a final rule implementing statutory prohibitions against false or misleading representations of deposit insurance or misuse of the FDIC name or logo. OCC and CFPB issued supporting statements. CFPB issued a Consumer Financial Protection Circular to other agencies that enforce consumer financial protection laws noting that the misrepresentation of FDIC insurance may be considered a "deceptive" practice under UDAAP.

Banking

FRB:
- Issued finalized rule governing funds transfers over the FedNow Service
- NY FRB launched Global Supply Chain Pressure Index

OCC:
- Discussed the importance of risk management
FDIC:
- Issued final rule on false advertising, misrepresentations about Insured Status, and misuse of the FDIC’s name or logo; related statements from FDIC, OCC, CFPB
- Published financial institution letters on the amendments to guidelines for appeals of material supervisory determinations, Small Entity Compliance Guide related to simplification of Deposit Insurance Rules, and Minority Depository Institution (MDI) DesignationsCFPB:
CFPB:
- Published a report on mortgage servicing COVID-19 response metrics
- Issued a Consumer Financial Protection Circular on prohibiting false claims about FDIC insurance
- Issued a blog on promoting consistent enforcement of consumer financial protections
- Issued an interpretive rule clarifying states’ ability to enforce federal consumer financial protection laws

Capital Markets

Other

Administration
- Announced new actions to ease housing costs
- Issued statement on FTC Vote to Protect Children’s Privacy
Congress:
- Senate:
  - Held hearings addressing climate change, and nominations of members of the Federal Reserve Board and SEC
- House:
  - Financial Services Committee held a hearing on using AI for effective RegTech; related OCC testimony
  - Appropriations subcommittee held a Fiscal Year 2023 Budget Request hearing with the SEC and FTC
DOJ:
- Issued speech on Antitrust policies
- Charged three portfolio managers and a global investment firm with a multibillion-dollar fraud
FTC:
- Announced the swearing in of Alvaro Bedoya as FTC Commissioner
- Published a policy statement on Education Technology and the Children’s Online Privacy Protection Act
- Proposed changes to the guides for endorsements and testimonials in advertising
HUD:
- Announced reductions of “green mortgage insurance premiums”, $10.3 billion in grants for housing and community development, action plans to increase affordable housing, and the expansion of asset-building support for HUD-assisted families
Commerce:
- Published an RFI on a framework for enhancing U.S. economic competitiveness in digital asset technologies
BIS:
- Issued speech on Basel Committee work on digitalization and cryptoassets
- Published a paper on Inequality hysteresis

Other

IAIS
- Announced that the addition of the Massachusetts Division of Insurance (MA) membership to the International Association of Insurance Supervisors