On Tuesday, July 13, 2021, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation (collectively, the “Agencies”) invited public comment on proposed interagency guidance on managing risks associated with third-party relationships (the “Proposed Guidance”). By harmonizing for the first time the

On June 30, President Biden signed into law a joint resolution to repeal the Office of the Comptroller of the Currency’s (OCC) so-called true lender rule.  The rule was repealed under the Congressional Review Act (CRA), which allows Congress to repeal new federal regulations by passing a joint resolution of disapproval that must be later signed by the president.  Federal regulations repealed under the CRA are treated as if they had never gone into effect.

Continue Reading Congress Repeals the OCC’s True Lender Rule

On June 23, the Supreme Court issued a decision in Collins v. Yellen, a case which concerned the Federal Housing Finance Agency (“FHFA”) and the two government sponsored enterprises (“GSEs”) which the FHFA regulates and currently holds in conservatorship—the Federal National Mortgage Association (“Fannie Mae” or “Fannie”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac” or “Freddie”).  The case presented a challenge by a group of Fannie and Freddie shareholders to a provision of the conservatorship which has effectively precluded the GSEs from paying dividends to shareholders.  Among other things, the plaintiffs targeted the constitutionality of the protection from removal enjoyed by the FHFA’s Director, which allowed the President to remove the Director only “for cause.”  This provision mirrored the removal protection provided to the Director of the Consumer Financial Protection Bureau (“CFPB”) and which the Court invalidated in Seila Law.

The Supreme Court declined to strike down the challenged provision of the conservatorship, but it did invalidate the FHFA Director’s “for cause” removal protection.  Not only does this decision have clear ramifications for the FHFA and GSEs, but it also may preview issues relating to the legal status of decisions rendered by CFPB Directors during the period in which they were unconstitutionally protected from removal from office.


Continue Reading Supreme Court Finds FHFA For-Cause Removal Structure Unconstitutional; Decision May Have Implications for CFPB

On March 31, 2021, the Consumer Financial Protection Bureau (“CFPB”) rescinded a range of policy statements issued under the leadership of former Director Kathleen L. Kraninger.  These rescissions concerned one policy statement governing communications between institutions subject to CFPB supervision and their examiners, and seven policy statements issued during the COVID-19 pandemic to provide regulatory

On Monday, May 17, 2021, the Federal Deposit Insurance Corporation (“FDIC”) issued a request for information and comment (“RFI”) regarding the current and potential digital asset activities of insured depository institutions (“IDIs”).  The RFI is intended to inform the FDIC’s understanding of digital asset activities, including associated risk and compliance management issues.  Comments on the RFI are due by July 16, 2021.

The RFI categorizes digital asset activities into five use cases and solicits comments based on this framework.  The five use cases are (i) technology solutions, such as token-based systems and distributed ledgers; (ii) asset-based activities, such as investments and margin lending; (iii) liability-based activities, such as deposit services and reserves; (iv) custodial services; and (v) other activities, which could include market-making and decentralized financing.  The RFI requests comment on whether additional use cases should be included within this framework and which use cases have the greatest demand in the marketplace.  The RFI also requests that commenters provide more detailed information about the use cases that IDIs currently conduct or are considering conducting.


Continue Reading FDIC Issues Request for Information on Digital Assets

On Wednesday, May 5, 2021, the Board of Governors of the Federal Reserve System (“Federal Reserve”) issued a notice requesting public comment on proposed guidelines articulating a series of principles to be used by Federal Reserve Banks in evaluating requests for Reserve Bank master accounts and payment services (the “Proposed Guidelines”). The Federal Reserve intends

On May 3, 2021, media outlets reported that Treasury Secretary Janet Yellen will appoint Michael Hsu to serve as Acting Comptroller of the Currency.  Mr. Hsu currently serves as an Associate Director of the Division of Supervision and Regulation at the Board of Governors of the Federal Reserve System, where he heads the Large Institution Supervision Coordinating Committee (“LISCC”), which oversees the largest U.S. banking organizations.

Continue Reading Treasury Secretary Yellen to Appoint Acting Comptroller of the Currency

On April 22, the Supreme Court unanimously ruled in AMG Capital Management v. Federal Trade Commission that § 13(b) of the Federal Trade Commission (“FTC”) Act does not authorize the FTC to obtain equitable monetary relief, such as restitution for consumer harm.  This development will make it more complicated for the FTC to obtain consumer redress.  While the FTC will still be able to seek consumer redress through other legal avenues, especially § 19 of the FTC Act, these avenues generally impose additional legal requirements beyond what § 13(b) required.  This decision may prompt Congress to consider amending the FTC Act to increase the availability of consumer redress.  It may also encourage the CFPB to be more assertive in areas where the agencies share jurisdiction.

Continue Reading Supreme Court Ruling Complicates FTC’s Ability to Obtain Consumer Redress

On April 19, 2021, the CFPB issued an interim final rule (“rule”) aimed at preventing illegal evictions.  This measure is intended to support an eviction moratorium issued by the Centers for Disease Control and Prevention (“CDC”), which prevents landlords from evicting tenants for failing to pay rent when the tenant is unable to afford full payments and would likely be driven into homelessness or a shared living setting by the eviction.  The rule applies to debt collectors—as defined in the Fair Debt Collection Practices Act (“FDCPA”)—who are collecting debts for landlords.  Under the rule’s terms, such collectors must disclose the existence of the CDC moratorium and may not misrepresent tenants’ eligibility for protection under the moratorium.

Continue Reading CFPB Issues Rule Targeted at Preventing Illegal Evictions

The Market Risk Advisory Committee (“MRAC”) of the Commodity Futures Trading Commission (“CFTC”) met last week to discuss reports from its subcommittees on the following issues: Climate-Related Market Risk, CCP Risk and Governance, Market Structure, and Interest Rate Benchmark Reform.  The meeting also featured a panel discussion on diversity and inclusion in the derivatives and related financial markets.  The discussion on Climate-Related Market Risk featured discussion of the Climate-Related Market Risk Subcommittee’s report: Managing Climate Risk in the U.S. Financial System (“Report”), which it previously released on September 9, 2020.  Subcommittee Chair Robert Litterman addressed the MRAC to discuss the Report’s findings and issue a call to action on climate change.

Continue Reading CFTC MRAC Meeting Features Discussion of Climate Risk