Lawmakers To Receive Update On Monetary Policy; CFTC To Hold Meet

Lawmakers To Receive Update On Monetary Policy; CFTC To Hold Meeting Of Energy And Environmental Markets Advisory Committee

, Mara C. Giorgio of Squire Patton Boggs (US) LLP - Capital Thinking Blog

Monday, February 23, 2015

Print Mail Download

i

Legislative Activity

Lawmakers to Focus on Federal Reserve, Housing

This week, Janet Yellen, Chair of the Board of Governors of the Federal Reserve System, will testify before the Senate Banking and House Financial Services Committees on monetary policy and the state of the economy. Chair Yellen’s remarks come as lawmakers continue to call for reform and stricter oversight of the Federal Reserve’s operations. In particular, S. 264– Senator Rand Paul’s (R-KY) so-called “Audit the Fed” bill – would require the Government Accountability Office (GAO) to: (1) complete, within 12 months of enactment of the bill, the required audit of the Board of Governors of the Federal Reserve System and of the Federal Reserve Banks; and (2) submit to Congress, within 90 days of audit completion, a detailed report of audit findings and conclusions. It is possible that Senator Paul will attempt to attach his bill – which currently has 31 cosponsors – to upcoming “must past” legislation that would be necessary to raise the nation’s debt limit.

Additionally, the House Financial Services Committee will continue its focus on housing finance reform as its Subcommittee on Housing and Insurance prepares to hold an oversight hearing of the Federal Housing Administration (FHA). Lawmakers will likely continue to express concern that the FHA’s Mutual Mortgage Insurance Fund (MMIF) has not achieved its required 2 percent capital reserve ratio.

Relief for Community and Regional Banks Faces Uncertain Path

At the end of the 113th Congress, lawmakers passed two amendments to provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) – the so-called “swaps push-out rule” and the “Collins Amendment.” As a result, and leading up to the 114th Congress, there seemed to be growing momentum and an opening for regulatory relief for community institutions. However, after the Senate Banking Committee held its first two hearings on the issue this month, it has become clear that the path for regulatory relief for regional and community banks remains uncertain, especially in light of Senator Elizabeth Warren’s (D-MA) continued skepticism over the need for, and appropriateness of, such relief.

This Week’s Hearings:

Tuesday, February 24: The Senate Banking Committee will hold a hearing titled “The Semiannual Monetary Policy Report to the Congress.”
Wednesday, February 25: The House Financial Services Committee will hold a hearing titled “Monetary Policy and the State of the Economy.”
Thursday, February 26: The House Financial Services Subcommittee on Housing and Insurance will hold a hearing titled “The Future of Housing in America: Oversight of the Federal Housing Administration – Part II.”

Regulatory Activity

CFTC to Hold Meeting of its Energy and Environmental Markets Advisory Committee, Announces Members of MRAC

On Thursday, February 26, the Commodity Futures Trading Commission (CFTC) will hold a meeting of its Energy and Environmental Markets Advisory Committee. The Committee, chaired by Republican Commissioner J. Christopher Giancarlo, will focus on the CFTC’s proposed rules seeking to implement position limits and how these proposals will impact energy and environmental markets.

Additionally, CFTC staff will hold a public roundtable on March 5 to discuss issues related to recovery and orderly wind-down of Derivatives Clearing Organizations (DCOs). The goal of the roundtable is to gather views from a variety of stakeholders, including DCOs, their clearing members, and the customers of their clearing member, including money managers, end-users, and others.

Also, last week, the CFTC announced the members of its newly formed Market Risk Advisory Committee (MRAC). MRAC, which is chaired by Commissioner Sharon Y. Bowen, will support the CFTC’s efforts to detect and mitigate risks within the market to industry participants, consumers, and the broader financial community. This year, MRAC plans to study both long-standing and nascent risks to the market, as well as challenges posed by the evolving structure of the swaps and futures markets.