Major Developments
Congress
U.S. Senate
Committee on Banking, Housing, and Urban Affairs
Nomination Hearing
June 21, 2023
The U.S. Senate Committee on Banking, Housing, and Urban Affairs held a nomination hearing on the following nominations:
U.S. House of Representatives
Committee on Financial Services
Hearing: The Federal Reserve's Semi-Annual Monetary Policy Report
June 21, 2023
The U.S. House Committee on Financial Services held a hearing entitled, "The Federal Reserve's Semi-Annual Monetary Policy Report."
Hearing: HUD Oversight: Testimony of the HUD Inspector General
June 21, 2023
The U.S. House Committee on Financial Services Subcommittee on Housing and Insurance held a hearing entitled, "HUD Oversight: Testimony of the HUD Inspector General."
Proposed Legislation in Response to Recent Bank Failures Introduced
June 21, 2023
several bills to respond to the recent failures of Silicon Valley Bank (SVB), Signature Bank, and First Republic Bank have been introduced in the U.S. House Committee on Financial Services. Such proposals include:
- H.R. 4208, Failed Bank Executives Accountability and Consequences Act, expanding bank regulatory authority with respect to clawing back compensation, imposing fines, and banning future work in the industry for bank executives that negligently contribute to their bank's failure.
- H.R. 4209, Incentivizing Safe and Sound Banking Act, which would expand bank regulator authority to prohibit stock sales of bank executives, when appropriate, when issuing a cease-and-desist order to a bank for not complying with the law, and automatically restricting such stock sales by senior executives of large banks if it receives poor exam ratings or does not resolve supervisory citations, such as a matter requiring immediate attention, in a timely manner.
- H.R. 4210, Closing the Enhanced Prudential Standards Loophole Act, which imposes Dodd-Frank's enhanced prudential standards on banks without bank holding companies.
- H.R. 3992, Effective Bank Regulation Act¸ which requires bank regulators to expand their stress testing requirements. Specifically, rather than doing two stress test scenarios, the bill would require five, and ensure that the Federal reserve does stress tests for situations when interest rates are rising or falling.
- H.R. 4206, Bank Safety Act, which would prevent large banks from opting out of the requirement to recognize Accumulated Other Comprehensive Income (AOCI) in regulatory capital, which primarily reflects the kind of unrealized losses Silicon Valley Bank had with its securities portfolio.
- H.R. 3914, Failing Bank Acquisition Fairness Act, which would ensure smaller banks can purchase failed banks by directing the FDIC to only consider the bids of a megabank with more than 10% of total deposits if no other institutions meet the least cost test to the FDIC.
- H.R. 4116, Systemic Risk Authority Transparency Act¸which requires that for any use of the systemic risk exception of FDIC's least cost resolution test, this bill would require banking regulators and the Government Accountability Office (GAO) to produce the same kind of post-failure lessons learned reports that the Federal Reserve, FDIC, and GAO did in the aftermath of Silicon Valley Bank's and Signature Bank's failure. Initial reports would be due within 60 days after the systemic risk exception is triggered, with more comprehensive reports due within 180 days.
- H.R. 4204, Shielding Community Banks from Systemic Risk Assessments Act, which would permanently exempt banks with less than $5 billion in total assets from special assessments the FDIC must collect when a systemic risk exception is triggered. The bill would allow FDIC to set a higher threshold if warranted while requiring a minimal impact on banks with between $5 billion and $50 billion in total assets.
- H.R. 4062, Chief Risk Officer Enforcement and Accountability Act, which would codify regulatory requirements that large banks have a Chief Risk Officer (CRO). The bill also requires within 24 hours of a large bank's CRO position being vacant, the bank must notify their federal and, if applicable, state prudential regulator of such vacancy. Within 7 days, they must submit a plan to their regulator on how they would search for and promptly hire a well-qualified CRO when there is a vacancy. After 60 days, if the CRO position remains vacant, the bank must notify the public and be subject to an automatic cap on their asset growth until such vacancy is cured.
- H.R. 4200, Fostering Accountability in Remuneration Fund Act of 2023, or FAIR Fund Act, which would require large financial institutions to have a portion of senior executive compensation placed into a deferred compensation pool that would get paid out between 2 years and 8 years depending on the size of the large financial institution. In the case of a company's failure and/or executive misconduct, the fund would be used to cover the costs of paying any fines or resolving the firm. This would supplement incentive-based compensation rules required under Section 956 of Dodd-Frank.
- H.R. 4207, Stopping Bonuses for Unsafe and Unsound Banking Act¸which would restrict discretionary bonus payments to executives of any large bank does not resolve a Matter Requiring Immediate Attention or a similar supervisory citation from bank supervisors in a timely manner. Specifically, a bonus freeze would kick in if they do not submit an acceptable remediation plan by a submission deadline set by the regulators, and furthermore, a bonus freeze would take effect if they do not implement the remediation plan by the implementation deadline set by the regulators.
- Press Release
Committee on Small Business
Committee on Small Business Announces July Hearing Schedule
June 21, 2023
Today, the House Committee on Small Business announced its July hearing schedule.
Full Committee Hearing – "Pandemic Fraud Accountability: Reviewing the SBA Inspector General's COVID-19 Fraud Report"
Date & Time: Thursday, July 13th, 2023, at 2:00 P.M. EDT
Location: Hearing Room, 2360 Rayburn House Office Building
Full Committee Markup
Date & Time: Tuesday, July 18th, 2023, at 9:45 A.M. EDT
Location: Hearing Room, 2360 Rayburn House Office Building
Subcommittee on Oversight, Investigations, and Regulations – "Burdensome Red Tape: Overregulation in Health Care and the Impact on Small Businesses"
Date & Time: Wednesday, July 19th, 2023, at 10:00 A.M. EDT
Location: Hearing Room. 2360 Rayburn House Office Building
Full Committee Hearing – "Rural Entrepreneurship: Examining the Challenges and State of Rural Small Businesses"
Date & Time: Wednesday, July 26th, 2023, at 10:00 A.M. EDT
Location: Haring Room, 2360 Rayburn House Office Building
House Passes Bill to Codify Program to Support Veteran Entrepreneurs
June 20, 2023
The House of Representatives voted to pass the Veteran Entrepreneurship Training Act of 2023. The bill authorizes the Small Business Administration's (SBA) "Boots to Business" program, which provides entrepreneurship training to military service members, spouses, and veterans, for five years.
Federal Agencies
Federal Deposit Insurance Corporation
National Rates and Rate Caps – June 2023
June 20, 2023
The Federal Deposit Insurance Corporation (FDIC) released national rates and rate cap information for June 2023.
Securities and Exchange Commission
Perpetual Personal Penny Stock Prohibitions: Statement on the Recent Orders Imposing Bars in the Public Interest
June 21, 2023
Securities and Exchange Commission (SEC) Commissioner Hester M. Peirce issued a statement on the recent orders imposing bars in the public interest.
Remarks at the Society for Corporate Governance 2023 National Conference
June 21, 2023
SEC Commissioner Mark T. Uyeda gave remarks at the Society for Corporate Governance 2023 National Conference.
SEC Reopens Comment Period for Position Reporting of Large Security-Based Swap Positions
June 20, 2023
The SEC reopened the comment period for its proposed rule for position reporting of large security-based swap positions that exceed certain thresholds, and the staff of the Commission's Division of Economic and Risk Analysis released a memorandum that provides supplemental data and analysis regarding the proposed reporting thresholds in the equity security-based swap market.
Commodity Futures Trading Commission
Commissioner Johnson Hosted a European Financial Markets Supervision Roundtable with U.S. Ambassador to Spain and Andorra
June 21, 2023
Commodity Futures Trading Commission (CFTC) Commissioner Kristin Johnson and the Honorable Julissa Reynoso Pantaleón, U.S. Ambassador to Spain and Andorra, hosted a financial markets roundtable with leading voices in global prudential and capital markets regulation at the Ambassador Residence in Madrid, Spain.
Consumer Financial Protection Bureau
CFPB Releases Reports on Banking Access and Consumer Finance in Southern States
June 21, 2023
The Consumer Financial Protection Bureau (CFPB) issued two new reports on the financial opportunities and challenges facing Southern communities.
Freddie Mac
Freddie Mac Multifamily Apartment Investment Market Index Rises in First Quarter of 2023
June 21, 2023
The Freddie Mac Multifamily Apartment Investment Market Index® (AIMI®) rose by 5.3% in the first quarter of 2023, but decreased year over year, with the annual index down 16.6%.
International
European Commission
Ukraine Recovery Conference: President von der Leyen and Executive Vice-President Dombrovskis showcase strong EU support with new €50 billion Ukraine Facility and €800 million in agreements to mobilise investment for Ukraine's recovery
June 21, 2023
At the Ukraine Recovery Conference 2023 in London, President of the European Commission, Ursula von der Leyen, presented the details of the Commission's proposal for a new Ukraine Facility that, if adopted by the European Parliament and Council of the EU, will mobilise up to €50 billion over four years in the form of both grants and loans.
European Banking Authority
The EBA publishes the final amending ITS on supervisory disclosure under CRD
June 21, 2023
The European Banking Authority published its final draft amending Implementing Technical Standards on supervisory disclosures, which specify the format, structure, contents list and annual publication date of the supervisory information to be disclosed by competent authorities.
Bank of England
Index Linked Treasury Stocks
June 21, 2023
In accordance with the terms of the prospectus dated 19 December 1986, the rate of interest payable on the above stock for the interest payment due on 17 January 2024 will be £4.8032 per £100 nominal of stock.
Summary Minutes of Sub-Group and Task Force Meetings – April 2023
June 21, 2023
The Bank of England released the minutes of the Working Group on Sterling Risk-Free Reference Rates Sub-Group and Task Force meetings held in April 2023.
Speech: The Bank of England's approach to enforcement: a decade in the making
June 21, 2023
Bank of England Head of Enforcement and Litigation Oliver Dearie gave a speech at the Financial Services Lawyers Association entitled, "The Bank of England's approach to enforcement: a decade in the making."
Speech: Financial stability risks from the non-bank sector: thinking system wide
June 21, 2023
Bank of England Financial Stability and Risk Director Lee Foulger gave a speech entitled, "Financial stability risks from the non-bank sector: thinking system wide."
Administration Changes
Vacancies
Board of Governors of the Federal Reserve System
- Vice Chair – Vacant (Vice Chair Leal Brainard resigned effective on or around February 20, 2023)
Office of the Comptroller of the Currency
- Comptroller – Vacant (Michael Hsu serves as Acting Comptroller)
Financial Crimes Enforcement Network
- Director – Vacant (Himamauli Das serves as Acting Director)
Appointments/Confirmation Hearings
U.S. Department of the Treasury – Janet Yellen (effective January 26, 2021)
Federal Reserve Board – Jerome H. Powell (effective May 23, 2022)
Federal Reserve Bank of New York – John C. Williams (effective June 18, 2018)
Federal Reserve Bank of Boston – Susan M. Collins (effective July 1, 2022)
Federal Deposit Insurance Corporation – Martin Gruenberg (effective January 5, 2023)
Office of the Comptroller of the Currency – Michael Hsu (acting Comptroller, effective May 10, 2021)
Securities and Exchange Commission – Gary Gensler (effective April 17, 2021)
Commodity Futures Trading Commission – Rostin Behnam (effective December 17, 2021)
Consumer Financial Protection Bureau – Rohit Chopra (effective October 12, 2021)
National Credit Union Administration – Todd M. Harper (effective January 20, 2021)
Small Business Administration – Isabella Casillas Guzman (effective March 16, 2021)
U.S. Department of Housing and Urban Development – Marcia Fudge (effective March 10, 2021)
Federal Housing Finance Agency – Sandra L. Thompson (effective June 22, 2022)
U.S. Department of Education – Dr. Miguel Cardona (effective March 2, 2021)
PH Client Alerts
Click here to read more from our Coronavirus series.
Legislation/Legislative Updates
Click here to view the full text of the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act"), Enacted March 27, 2020.
Click here to view the full text of the Paycheck Protection Program Increase Act of 2020, Enacted April 24, 2020.
Click here to view the full text of the Paycheck Protection Program Flexibility Act of 2020, Enacted June 5, 2020.
Click here to view the full text of the Consolidated Appropriations Act, 2021, Enacted December 27, 2020.
Click here to view the full text of the American Rescue Plan of 2021, Enacted March 11, 2021.
Click here to view the full text of the PPP Extension Act of 2021, Enacted March 30, 2021.
Click here to view a running list of proposed legislation from the Senate Committee on Banking, Housing, and Urban Affairs, Senate Committee on Small Business and Entrepreneurship, House Committee on Financial Services, and House Committee on Small Business.
