Legislative Activity

Senate Banking Takes on Terrorism Financing

Taking the lead from the House Financial Services Committee, which held a hearing earlier this month to exam the terrorism financing implications of the “ransom payments” to Iran, the Senate Banking Committee will hold a hearing this Wednesday on the matter. Outside of the more recent focus on the “ransom payments” to Iran, the House Financial Services Task Force to Investigate Terrorism Financing appears on track to release its final report and recommendations this fall.

Not to be left out of the discussion, the Treasury Department, along with the Federal Reserve Board, Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), and National Credit Union Administration (NCUA) recently issued a “Joint Fact Sheet on Foreign Correspondent Banking,” which outlined their approach to the supervision and enforcement of U.S. economic sanctions, anti-money laundering, and counter terrorism financing laws.

Wells Fargo Summoned to the Hill for Hearings

On September 8, the Consumer Financial Protection Bureau (CFPB) assessed a $100 million fine – the largest fine in the agency’s history – against Wells Fargo for illegally opening unauthorized accounts in order to boost sales figures. The Senate Banking Committee will hold a hearing on the matter this Tuesday and intends to question Wells Fargo Chairman and CEO John Stumpf. Similarly, House Financial Services Committee Chairman Jeb Hensarling (R-TX) announced that the Committee has launched an investigation into Wells Fargo’s alleged fraud and the role of Washington regulators in monitoring and investigating the bank’s activities. The Committee will also be calling John Stumpf to testify at a hearing later this month. In addition, the Committee is requesting that Wells Fargo and regulators provide internal documents relating to the discovery and timing of the practices in question, and is asking company officials to appear for transcribed interviews.

Housing Policy a Point of Discussion in the House and Senate

Though housing finance reform remains an important item for discussion in 2017, both the House Financial Services and Senate Banking Committees will hold hearings this week on housing policy issues. Relatedly, earlier this year, Senate Finance Committee Chairman Orrin Hatch (R-Utah) and Senator Maria Cantwell (D-WA) introduced legislation to expand the low-income housing tax credit (LIHTC) program this past summer. Given the bipartisan focus on (and support of leadership for) affordable housing, it is possible that further legislation on the issue may be released later this year.

This Week’s Hearings:

• Tuesday, September 20: The Senate Banking, Housing, and Urban Affairs Committee will hold a hearing titled “An Examination of Wells Fargo’s Unauthorized Accounts and the Regulatory Response.”

• Wednesday, September 21: The Senate Banking, Housing, and Urban Affairs Subcommittee on National Security and International Trade and Finance will hold a hearing titled Terror Financing Risks of America’s $1.7 Billion Cash Payments to Iran.”

• Wednesday, September 21: The House Financial Services Subcommittee on Housing and Insurance will hold a hearing titled “The Future of Housing In America: A Better Way to Increase Efficiencies For Housing Vouchers and Create Upward Economic Mobility.”

• Wednesday, September 21: The House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises will hold a hearing titled “Corporate Governance: Fostering a System that Promotes Capital Formation and Maximizes Shareholder Value.”

• Thursday, September 22: The House Financial Services Committee will hold a hearing titled “The Annual Report of the Financial Stability Oversight Council.”

• Thursday, September 22: The House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises will hold a hearing titled “Examining the Agenda of Regulators, SROs, and Standards-Setters for Accounting, Auditing, and Municipal Securities.”

• Thursday, September 22: The Senate Banking, Housing, and Urban Affairs Subcommittee on Housing, Transportation, and Community Development will hold a hearing titled “Oversight of the HUD Inspection Process.”

Regulatory Activity

OCC May Charter New Path for FinTech Companies

Last week, Comptroller of the Currency Thomas Curry indicated that the agency is open to a full-service charter for financial technology (“FinTech”) companies and that a framework for regulating the industry would be released in the near-term. Building upon the OCC’s white paper released in March, Comptroller Curry repeated the agency’s guiding principles for FinTech regulation: supporting responsible ideas; developing a receptive agency culture; building on the OCC’s experience and expertise; encouraging innovation that provides fair access to financial services while protecting consumers; promoting safe and sound operations through risk management; urging banks to take innovation into account in their strategic planning; improving discussion of innovation through formal outreach programs; and collaborating with other regulators. Comptroller Curry also suggested that his agency may be open to charters to accommodate different business models of financial services providers.

FDIC to Hold Open Meeting on Tuesday

The FDIC Board of Directors will meet on Tuesday to consider various matters. After dispensing with its summary agenda, the agency plans to discuss Projected Deposit Insurance Fund Losses, Income, and Reserve Ratios for the Restoration Plan.

FSOC to Meet on Asset Management as House to Hold Hearing on the Agency

This Thursday, Treasury Secretary Lew will preside over an executive session of the Financial Stability Oversight Council (FSOC). During its meeting, the FSOC will discuss its review of asset management products and activities. Also on the agenda: FSOC’s budget for the next fiscal year, a potential proposal by the Office of Financial Research (OFR) to put in place permanent data collections for repurchase agreements, the Shared National Credit Program, and an update on developments regarding the resilience, recovery, and resolution of central counterparties. Relatedly, the House Financial Services Committee will hold a hearing on Thursday titled “The Annual Report of the Financial Stability Oversight Council,” with Secretary Lew slated to appear to testify about the agency’s activities.