FEDERAL GOVERNMENT RELATIONS
IBA issues new action alert on CLARITY Act
The U.S. Senate is expected to vote on the CLARITY Act in the coming weeks. Unfortunately, the legislation still does not close the loophole on allowing third party holders of stablecoin to pay a yield/interest.
Please use the IBA action center to send a message to Sen. Young and Sen. Banks asking for their help in encouraging Senate leadership to close the loophole before the legislation moves to a vote.
CFPB seeks input on access to mortgage credit
The Consumer Financial Protection Bureau issued a request for information on potential changes to reduce regulatory burdens and promote access to mortgage credit.
The CFPB said it is specifically requesting information on industry and consumer burdens related to the TILA-RESPA integrated disclosures (TRID), the right of rescission and reverse mortgage disclosures.
Federal Reserve announces leadership and objectives of its task forces
The Federal Reserve on Thursday announced the leadership and objectives of its task forces to advance the conduct of monetary policy. Supported by Fed staff, the task forces “will operate independently, with a mandate to follow the evidence, provide candid feedback, and produce rigorous findings for the Federal Open Market Committee."
Despite Fed vote to keep rates steady, FOMC minutes show divide
Federal Reserve officials seemed to be divided over interest rates, according to minutes released from the Federal Open Market Committee's June 16-17 meeting. In the end, the committee voted unanimously to maintain the target range for the federal funds rate at 3.5%-3.75%.
FFIEC reaffirms efforts to boost de novo bank formation
The Federal Financial Institutions Examination Council released a statement reaffirming its members’ commitment to promoting de novo bank formation by exploring ways to lower regulatory barriers to creating new financial institutions.
Fed proposes risk-based AML requirements
The Federal Reserve proposed amending its requirements for banks to maintain anti-money laundering programs to align with changes to AML program requirements separately proposed by other agencies.
The Fed said the proposal would:
- Require banks to focus their anti-money laundering resources based on risk, with more attention given to higher-risk customers and activities.
- Require banks to incorporate the Financial Crimes Enforcement Network's AML priorities into their risk-assessment processes.
- Stipulate that once a bank has established an anti-money laundering program, the Fed would focus supervision and enforcement activities on significant failures to implement the program.
The agency’s proposal notes that many community banks operate with more limited business activities, traditional lending and deposit services, a narrower geographic footprint and customer bases concentrated within defined communities. “For such banks, risk assessment processes may appropriately be more streamlined or qualitative in nature,” it says. The Fed’s proposal deviates from a proposed rule the Federal Deposit Insurance Corp., Office of the Comptroller of the Currency and National Credit Union Administration issued earlier this year by not giving FinCEN a coordinating role in the examination process.
FinCEN said its proposed rule would amend AML/CFT rules to reduce compliance burden on the premise that financial institutions are best positioned to identify and evaluate their illicit finance risks. The joint proposal from the FDIC, OCC and NCUA aligns with the changes proposed by FinCEN.
The Anti-Money Laundering Act of 2020 directed FinCEN and the agencies to modernize and strengthen the AML/CFT regulatory framework to encourage more effective outcomes for financial institutions, regulators, law enforcement and national security agencies.
Comments on the Fed proposal are due 60 days after publication in the Federal Register.