Washington Report 360 | September 16, 2022

Digital and crypto assets; Price cap compliance; BNPL risk; SEC testimony

Key Highlights

Digital and crypto assets. Treasury published three reports on digital assets in response to a March 2022 Executive Order; DOJ released a report on the role of law enforcement in relation to digital assets and announced a nationwide group to combat illicit digital assets activity; BCBS will finalize a regulatory framework for bank exposures to crypto assets “around year end.”

Price cap compliance. OFAC released preliminary guidance on compliance with an upcoming price cap on certain Russian oil transactions. (See KPMG Regulatory Alert, here)

BNPL risk. CFPB report on Buy Now, Pay Later loans highlights rapid market growth and related consumer risks; including inconsistent consumer protections, data harvesting and monetization, and debt accumulation and overextension; CFPB will review each of the risk areas further.

SEC testimony. SEC provided testimony to the Senate Banking Committee covering market structure, crypto assets, climate-related disclosures, and DEI.

Financial services regulatory news
SEC	Proposed rules to enhance risk management in clearance and settlement of U.S. Treasury securities transactions New Office of Crypto Assets added to the Division of Corporation Finance's Disclosure Review Program (DRP) Enforcement Actions: Charged four underwriters for Municipal Bond Disclosure Law violations (first action against underwriters) Charged a broker-dealers with violations of the municipal adviser registration rule (first such action) Charged a registered investment advisers alleging failure to disclose fund fees
FINRA	Enforcement action alleging supervisory and reporting failures for large options positions
FRB	Boston Fed: Podcast on restoring price stability Research paper: Avoiding the next financial crisis: How does collateral quality affect ‘repo’ loan risk? SF Fed blog: Investing in Community Infrastructure to Support Thriving Economies (two-part series on CRA)
OCC	New Chief Climate Risk Officer, reporting directly to Acting Comptroller Q2 2022 Bank Trading Revenue report Q2 2022 Mortgage Metrics report
FDIC	Q2 2022 Quarterly Banking Profile; related remarks Updated Applications Procedures Manual (re: adverse comments and protests) Results of Summary of Deposits annual survey
CFPB	Report: Buy Now, Pay Later: Market trends and consumer impacts; related remarks Amicus brief, filed jointly with the FTC, regarding furnisher responsibilities under FCRA Blog: Furnishers have an obligation to investigate consumer disputes
Treasury	Three reports on Digital Assets, pursuant to Executive Order 14067 (March 2022) OFAC preliminary guidance on compliance with the Russian oil price cap OFAC sanctions against IRGC-affiliated individuals for roles in malicious cyber acts and ransomware activity FinCen and FDIC Digital Identity Tech Sprint - Key Takeaways and Solution Summaries Blog: The Racial Wealth Gap (second in a series)
DOJ	Report: The Role of Law Enforcement Related to Digital Assets; launch of nationwide Digital Asset Coordinator (DAC) Network Speech on Corporate Criminal Enforcement New COVID-19 Fraud Strike Force Teams
FTC	Staff Report on Bringing Dark Patterns to Light (consumer protections)
NY DFS	New legislation enacted expanding access to PSLF student loan forgiveness
FSB	Survey request on the Framework for information from FMI intermediaries to support resolution planning
BIS	BCBS: Oversight body reaffirms commitment to Basel III and directs BCBS to finalize a crypto regulatory framework for year-end Advancement of work on evaluating Basel III reforms, addressing climate-related financial risks, and approves annual G-SIB assessment BIS: Working paper on Cyber risk in central banking Speech on Trust, digitalisation and banking: from my word is my bond to my code is my bond?
CISA	RFI on approaches to implementing cyber incident reporting requirements

Financial services policy news
White House	Executive Order: Implementation of the Energy and Infrastructure Provisions of the Inflation Reduction Act of 2022 Fact Sheets: Executive Order to Ensure Robust Reviews of Evolving National Security Risks by CFIUS; related Treasury statement First-Ever Comprehensive Framework for Responsible Development of Digital Assets How the Inflation Reduction Act Will Help Small Businesses
Senate	Banking Committee hearing on Oversight of the U.S. Securities and Exchange Commission; SEC testimony Agriculture Committee hearing on digital commodities and consumer protection; CFTC testimony