STATE GOVERNMENT RELATIONS
Bills to watch:
- Senate Bill 314 - Pass through entity tax.
- Senate Bill 464 - Financial institutions and consumer credit.
- House Bill 1001 - State budget.
- House Bill 1033 - Retainage requirements.
- House Bill 1081 - Distributions to charitable beneficiaries.
- House Bill 1441 - Bank accounts for qualified youth.
FEDERAL GOVERNMENT RELATIONS
Fed maintains rates
The Federal Open Market Committee voted to maintain target interest rates at a range of 4.25-4.5%. The FOMC said that although economic activity has continued to expand and the unemployment rate has stabilized in recent months, inflation remains somewhat elevated. All committee members voted in favor of the policy action except Christopher Waller, who supported no change for the federal funds rate, preferring to continue the current pace of decline in securities holdings instead of slowing them. In its latest economic projections, the Federal Reserve estimated lower gross domestic product growth in 2025, higher unemployment and higher inflation than its December projection.
Executive order restricts CDFI Fund to statutory functions
President Donald Trump issued an executive order restricting the Community Development Financial Institutions Fund and some other federal programs to their statutory components and functions.
The EO says:
- The non-statutory components and functions of the CDFI Fund – which is housed under the Treasury Department – shall be eliminated to the maximum extent consistent with applicable law.
- The CDFI Fund and other affected entities shall reduce the performance of their statutory functions and associated personnel to the minimum presence and function required by law.
- The head of each affected entity shall submit a report to the Office of Management and Budget confirming full compliance within seven days.
- The Office of Management and Budget or the head of any executive department or agency charged with reviewing grant requests by such entities shall reject funding requests for such governmental entities to the extent they are inconsistent with this order.
The Social Security Administration announced that beneficiaries will no longer be able to change their direct deposit bank information through a phone call, part of what it says is a crackdown on fraud.
Trump nominates Bowman as Fed vice chair for supervision
President Trump nominated Federal Reserve Governor Michelle Bowman to be the Fed’s vice chair for supervision.
Senators reaffirm support for CDFI Fund amid concerns over cuts
Twenty-three senators from both parties have signed a joint letter expressing their support for the CDFI Fund after President Trump directed the program to scale back staffing and operations.
OCC removes reputational risk from bank exams, guidance
The Office of the Comptroller of the Currency announced it will no longer examine banks for reputational risk and will remove references to such risk from its Comptroller’s Handbook booklets and guidance.
OCC creates digitalization webpage for community banks
The Office of the Comptroller of the Currency has created a new page on its website with resources to help community banks meet their digitalization objectives.
FHA rescinds reconsideration of value policies on appraisals
The Federal Housing Administration issued a mortgagee letter rescinding three appraisal policies concerning fair housing considerations, part of what the agency said was a Trump administration effort to reduce regulation.
FHFA director named chair of Fannie Mae, Freddie Mac
Federal Housing Finance Agency Director Bill Pulte has named himself chairman of Fannie Mae and Freddie Mac boards. Both boards also removed several members and made new appointments.