STATE GOVERNMENT RELATIONS
Bills to watch:
- House Bill 1033 - Retainage requirements.
- House Bill 1074 - Distribution to charitable organizations.
- House Bill 1125 - Earned wage access services.
- House Bill 1174 - Charges for supervised loans.
- House Bill 1441 - Bank accounts for foster children.
- House Bill 1523 - Public depositories.
- House Bill 1528 - Discrimination in providing financial services.
- House Bill 1614 - Bullion depositories.
FEDERAL GOVERNMENT RELATIONS
Trump admin reportedly eying new oversight of CFPB
The Trump administration is gearing up to change the leadership of the Consumer Financial Protection Bureau and exploring a plan that would shift oversight of the agency to the Treasury Department or the White House Office of Management and Budget, sources said. The potential moves come as Scott Bessent became Treasury secretary this week and as Russell Vought's nomination to lead the OMB is moving through the Senate.
Trump faces challenges in filling Fed supervision role
The Trump administration has yet to announce who will become the Federal Reserve's vice chair for supervision when Michael Barr exits the role next month. Potential candidates include Fed Governor Michelle Bowman, who has criticized Biden-era regulations, and former Federal Deposit Insurance Corp. Chair Jelena McWilliams, known for her pro-innovation stance. The banking industry is eager for a quick appointment to advance deregulatory efforts, but the lack of vacancies on the Fed Board complicates the selection process.
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Fed holds interest rates; inflation 'somewhat elevated'
The Federal Reserve held its benchmark interest rate steady at the conclusion of its policy meeting this week, noting that the job market is "solid" and inflation "remains somewhat elevated." Fed Chair Jerome Powell said that with "the economy remaining strong, we do not need to be in a hurry to adjust our policy stance."
Read more from the Associated Press
Powell: Banks can serve crypto clients, follow AML rules
Federal Reserve Chair Jerome Powell said banks should not be dropping law-abiding cryptocurrency customers as a result of excessive risk aversion. While acknowledging the need for robust regulatory frameworks around crypto, Powell said banks can serve crypto clients while complying with anti-money-laundering laws. His comments came amid rising debate around alleged "debanking" and political pressure.
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GOP pushes to nix CFPB funding via budget reconciliation
A group of Republicans led by Sen. Ted Cruz, R-Texas, are renewing efforts to defund the Consumer Financial Protection Bureau, aiming to cut off the CFPB's funding from the Federal Reserve using budget reconciliation to sidestep the Senate's 60-vote threshold needed to pass most measures. "The CFPB is an unelected, unaccountable bureaucratic agency that has imposed burdensome and harmful regulations on American businesses, banks and credit unions," said Cruz.
Read more from the Wall Street Journal (subscription required)
FDIC faces examiner shortage amid federal hiring freeze
The Federal Deposit Insurance Corp. has withdrawn over 200 job offers for bank examiners due to a government-wide hiring freeze initiated by President Donald Trump. The move adds to staffing challenges that hinder the FDIC's oversight activities. The FDIC previously said that a lack of examiners was partly to blame for 2023's Signature Bank failure.
Read more from the Washington Post
Senate confirms Bessent as Treasury secretary
The Senate confirmed Scott Bessent as Treasury secretary in a 68-29 vote. Bessent will oversee President Donald Trump's economic agenda, including extension of the tax cuts that Republicans enacted in 2017, many of which will expire at year-end. The Treasury Department also will be responsible for studying many of the executive orders that Trump signed during his first week in office. The debt limit is among the most pressing matters at hand because the department will need to deploy "extraordinary measures" to avoid a default if the limit is not raised or suspended.
Read more from the Wall Street Journal (subscription required)
House, Senate panels to examine crypto 'debanking'
Senate and House committees will hold hearings in early February regarding alleged crypto "debanking," where banks drop customers under regulatory pressure. Senate Banking Committee Chair Tim Scott says Biden-era regulators targeted crypto firms and conservative individuals through "Operation Chokepoint 2.0." Meanwhile, the House Financial Services Committee will specifically examine the impact on digital assets.
Read more from American Banker