FEDERAL GOVERNMENT RELATIONS
Federal Reserve leaves key interest rate unchanged
The Federal Reserve announced on Wednesday that it is maintaining a benchmark overnight borrowing rate between 4.25% and 4.5% amid persistent uncertainty about the impact of the Trump administration's trade policy. The Federal Open Market Committee's "statement in effect warns that a large trade shock is still set to hit the economy in spite of efforts by the Trump administration to deescalate, with the Fed ... not providing any early dovish lean in favor of a June rate cut," wrote Krishna Guha of Evercore ISI.
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OCC clarifies cryptoasset trading roles for banks
The U.S. Office of the Comptroller of the Currency has clarified that national banks can now buy and sell cryptoassets for customers, as well as outsource crypto custody and trade execution to third parties. This move follows the Federal Reserve's recent decision to remove prior notification requirements for crypto activities.
Trump admin slashing jobs at top financial regulators
The Trump administration is reducing staff at major financial regulators, including the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the Securities and Exchange Commission. Among more than 2,300 financial regulatory jobs being cut are bank examiners and criminal investigators. Critics say the reductions could hinder supervision and lead to more risk-taking, especially as markets face volatility and a potential recession.
Bessent backs crypto bills at House hearing
U.S. Treasury Secretary Scott Bessent has expressed support for two cryptocurrency-related bills during a House Financial Services Committee hearing, emphasizing the importance of market structure and stablecoin legislation to ensure that the US remains a leader in digital assets. Democrats have voiced opposition, citing potential conflicts of interest related to President Donald Trump's crypto ventures.
Stablecoin bill falters in Senate
A bill to regulate stablecoins has failed to advance in the Senate, with only 49 senators voting in favor, short of the 60 needed. The legislation has been hindered by concerns over President Donald Trump's crypto ventures, particularly a deal involving World Liberty Financial and Binance.
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Senate votes to undo OCC rule barring expedited mergers
The Senate voted 52-47 to reverse a Biden-era Office of the Comptroller of the Currency rule that ended expedited reviews of bank mergers. Sen. John Kennedy, R-La., introduced the Congressional Review Act resolution, and President Donald Trump is expected to sign it once the House approves its version. The OCC has adopted an interim rule to restore the streamlined application process as the regulatory environment for bank mergers is poised to become more lenient.
CFPB says it won't enforce TILA rule for BNPL loans
The Consumer Financial Protection Bureau said it will not prioritize the enforcement of a Biden-era interpretive rule that treats buy-now, pay-later loans as credit cards under Regulation Z of the Truth in Lending Act. The move comes after the Financial Technology Association and the CFPB recently asked a court in a joint motion to stay the association's lawsuit alleging that the CFPB exceeded its authority with the rule.
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Bowman nomination moves closer to confirmation
The Senate Banking Committee advanced Michelle Bowman's nomination to become the Federal Reserve's vice chair for supervision. Bowman, a Fed governor since 2018, is expected to favor less-stringent bank regulation than her predecessor. Bowman has advocated for more tailored oversight and has spoken critically of a proposal to increase capital requirements for banks.
Bowman reportedly reviews Fed supervisory ratings
Federal Reserve Governor Michelle Bowman, who is nominated to be vice chair for supervision, is reportedly reviewing the Fed's supervisory ratings for large banks, noting that two-thirds received unsatisfactory ratings last year that she says were based on subjective criteria. The Fed has paused issuing new ratings until her confirmation, a move that could affect bank mergers and activities.
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White House budget targets CDFI, HUD programs
President Donald Trump's proposed budget calls for ending discretionary awards from the Community Development Financial Institution Fund, arguing the industry is mature enough to be financially independent. Meanwhile, the proposal includes a new $100 million program that would direct 60% of CDFI loans and investments toward rural development. The proposal also seeks to slash around $33 billion from the Department of Housing and Urban Development, including over $26 billion earmarked for rental assistance programs.