U.S. Financial Regulatory Week Ahead

Washington Gets Ready for IMF/World Bank Week, The FDIC’s Look at the Resolution of Systemically Important Banks, and HUD Looks at the Mortgage Market and Access to Capital

October 14 - 18, 2024

It is going to be another relatively quiet week in Washington across the board – Congress remains out of session until after the elections, and regulators are quietly preparing for the annual International Monetary Fund/World Bank weeklong meetings that begin on October 21st.  With finance ministers, central bankers, and other major regulatory officials converging on Washington for back-to-back meetings, speeches, and events, there will likely be a lot to watch and report (which we will detail in next week’s report).

We would note that that  The Federal Deposit Insurance Corporation holds a meeting of the FDIC Systemic Resolution Advisory Committee to discuss the resolution of systemically important financial companies.  This continues to be a moving target for bank regulators as banks and Congressional Republicans push back on expanding the definitions for “systemically important.” 

Also, this coming week, the Department of Housing and Urban Development is partnering with Ginnie Mae to host a conference looking at the mortgage market and access to capital.  With the housing market nationally struggling with still too-high interest rates and a shortage of housing inventory – an issue that has become a hot-button issue on the presidential and congressional campaign trails – this will be a particularly interesting event.  In addition to this, House Financial Services Committee Ranking Democrat Representative Maxine Waters (D-CA) said in an interview last week that if Democrats win control of the House in November and she becomes Committee chair again, her number one priority issue will be housing.

Last week, regulators, lobbyists, and everyone else who follows the banking sector were jarred to see TD Bank hit with a $3 billion fine and agreed to asset caps after submitting a guilty plea for money laundering by drug traffickers. As the 10th largest bank in the U.S., the size and impact of the penalties are pretty significant.

Also last week, the digital asset exchange Crypto.com sued the Securities and Exchange Commission after learning they are the target of potential charges by the agency. Crypto argued in their lawsuit that the SEC has no authority over their business or the crypto business overall, saying the agency is acting under “an unlawful de factor rule.”  This will be a very interesting case, especially in light of the Supreme Court’s Chevron decision earlier this year clipping the wings of aggressive regulatory actions.

Finally, and perhaps most impactful to markets, the Federal Trade Commission and the Department of Justice’s Antitrust Division jointly released their final version of Hart-Scott-Rodino rules (e.g., new rules dealing with mergers and acquisitions).  One aspect of the rules that private equity and other acquisition firms took note of is how the regulators want to look at how Big Tech firms and private equity are acquiring large amounts of smaller companies in a bid to snuff out oncoming competition potentially. 

Below is a listing of all the other significant regulatory-related events this coming week:

U.S. Congressional Hearings 

U.S. Senate

·       The Senate is in Pro Forma session and not returning to work until after the election. No work and no hearings are scheduled.  They will return to work on November 12.

House of Representatives

·       The House is out of session until after the November elections.  No business or hearings are scheduled.  They will return to work on November 12.

US Regulatory Meetings & Events

Federal Reserve Board and Federal Reserve Banks

·       Tuesday, October 15, 1:00 p.m. – Federal Reserve Board Governor Adriana Kugler gives remarks virtually entitled “Career Opportunities and Diversity in Economics” at the Exploring Careers in Economics event hosted by the Federal Reserve.

·       Friday, October 18, 12:10 p.m. (Vienna, Austria) – Federal Reserve Board Governor Christopher J. Waller gives remarks entitled “Decentralized Finance” at the Nineteenth Annual Vienna Macroeconomics Workshop in Vienna, Austria.

U.S. Treasury Department

·       There are no significant events scheduled at this time.

Department of Commerce

·       There are no significant events scheduled at this time.

Department of Housing and Urban Development

·       Tuesday, October 15, 8:30 a.m. – HUD and Ginnie Mae will host a strategic summit on "Mortgage Market Resilience and Access to Credit."  Participants include am Valverde, acting president of Ginnie Mae; Daniel Hornung, special assistant to the president for economic policy at the National Economic Council; Julia Gordon, assistant HUD secretary for housing and Federal Housing Administration commissioner; Bob Broeksmit, president/CEO of the Mortgage Bankers Association; David Dworkin, president/CEO of the National Housing Conference; Ted Tozer, fellow in the Housing Finance Policy Center at the Urban Institute and former Ginnie Mae President.

Securities and Exchange Commission

·       Tuesday, October 15, 2:00 p.m. – 6:00 p.m. – SIFMA will hold its annual Private Credit Forum.  SEC Commissioner Hester Pierce will deliver remarks.

·       Thursday, October 17, 2:00 p.m. – The SEC will hold a Closed Meeting.

Commodities Futures Trading Commission

·       Tuesday, October 15, 6:00 p.m. – CFTC Commissioner Christy Goldsmith Romero will receive the Pioneer Award from the Asian Pacific American Bar Association (APABA) of Washington, D.C. at the Annual Gala.

·       Wednesday, October 16, 9:00 a.m. – 1:00 p.m. – The CFTC’s The Commodity Futures Trading Commission’s Division of Clearing and Risk will hold a public roundtable Oct. 16 from 9:00 a.m. to 1:00 p.m., to discuss existing, new, and emerging issues in clearing. The roundtable will be held in the Conference Center at CFTC's headquarters at Three Lafayette Centre, 1155 21st Street N.W., Washington, D.C.

·       Wednesday, October 16, 11:00 a.m. – CFTC Commissioner Caroline D. Pham will speak on a keynote fireside chat at FIX Trading Community’s Americas Trading Conference 2024 in New York.

Federal Deposit Insurance Corporation

·       Tuesday, October 15, 9:00 a.m. – The Federal Deposit Insurance Corporation holds a meeting of the FDIC Systemic Resolution Advisory Committee to discuss the resolution of systemically important financial companies.

Office of the Comptroller of the Currency

·       There are no significant events scheduled at this time.

The Consumer Financial Protection Bureau

·       There are no significant events scheduled at this time.

FINRA

·       There are no significant events scheduled at this time.

National Credit Union Administration

·       There are no significant events scheduled at this time.

Federal Trade Commission & Department of Justice Antitrust Division

·       Friday, October 18, 8:00 a.m. – 6:00 p.m. – The FTC hosts the Second Federal Trade Commission Conference on Marketing and Public Policy in Washington, D.C.

Farm Credit Administration

·       Thursday, October 10, 10:00 a.m. – The Farm Credit Administration holds a board meeting.  They are scheduled to vote on a proposed rule dealing with  Annual Independent Audits and Internal Controls over Financial Reporting Requirements

Farm Credit Insurance Corporation

·       There are no significant events scheduled at this time.

International Monetary Fund & World Bank

·       There are no significant events scheduled at this time.

North American Securities Administrators Association

·       There are no significant events scheduled at this time.

Trade Associations & Think Tank Events

Trade Associations

·       Tuesday, October 15, 9:00 a.m. – The Institute for International Finance holds a hybrid forum on the IMF’s Global Financial Stability Report.

·       Tuesday, October 15, 2:00 p.m. – 6:00 p.m. – SIFMA will hold its annual Private Credit Forum.  SEC Commissioner Hester Pierce will deliver remarks.

·       Thursday, October 17, 8:00 a.m. – The Brookings Institution holds an event entitled “Meeting the global climate finance challenge: A conversation with UN Climate Change Executive Secretary Simon Stiell” in Washington, D.C.

Think Tanks and Other Events

·       Sunday and Monday, October 13 – 14 - Stanford University's Hoover Institution holds a conference, beginning at 11:05 a.m., on "A 50-Year Retrospective on The Shadow Open Market Committee and Its Role in Monetary Policy” in Stanford, California.  Federal Reserve Board Governor Christopher Waller will deliver remarks.

·       Friday, October 17, 12:00 p.m. – The Urban Institute holds a discussion on "Sustainable Homeownership and Wealth Preservation for Communities of Color."

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U.S. Financial Regulatory Week Ahead

The Fed Backs Down on Bigger Bank Capital Standards Setting Up A Possible FDIC Vote This Week; Election Betting Gets Held Up Again, and FDIC Chair Gruenberg Refuses to Testify Before Congress

September 16 - 20, 2024

The coming week will be filled with lots of regulatory speeches, congressional hearings, and a good number of trade association conferences. However, the biggest event is likely to be the FDIC's Open Meeting, where they may vote on the much-criticized and now scaled-back bank capital requirements. In a major concession to lobbying by big banks and many members of Congress, Federal Reserve Vice Chair Michael Barr announced last week that the Fed, OCC, and FDIC had negotiated a re-write, but it is unclear if all the details have been finalized among the three regulators.

The FDIC action comes as embattled FDIC Chair Marty Gruenberg shockingly refused a request to testify before the House Financial Services Committee. Gruenberg, who has announced he will at some point step down from his role, allowing a toxic work environment and widespread sexual harassment as well as his own personal unprofessional behavior, was supposed to testify on September 19, but his staff informed the Committee he would not show up. As we have noted in previous updates, Gruenberg refuses to step down until a replacement is confirmed by the US Senate, which most seasoned observers believe will not happen until next year due to the elections and the Senate schedule – something Gruenberg clearly understands as he desperately clings to power.

Regarding Gruenberg's replacement, Senate Banking Committee Chair Sherrod Brown (D-OH) is apparently looking to hold a committee confirmation vote for current CFTC Commissioner Christy Goldsmith Romero this week. But we know two senators are out of action this week for health reasons and believe the committee vote probably will not happen.

Also, election betting on financial exchanges was expected to begin this coming week. However, a federal appellate court halted the financial exchange Kalshi on Friday to review the situation more closely. The CFTCC had ruled against allowing such betting through derivative markets. However, a federal judge overturned the CFTC block Thursday, and  Kalshi began to trade election betting contracts quickly, but they are now in limbo as the appellate court looks deeper into the matter. How long until they rule is anyone's guess. But it could come as early as this week.

Below is a listing of all the other significant regulatory-related events this coming week:

U.S. Congressional Hearings 

U.S. Senate

·       Tuesday, September 17, 2:30 p.m. – The Senate Banking Committee’s Subcommittee on Financial Institutions and Consumer Protection holds a hearing entitled “Back to School: Shedding Light on Risks and Harm in the Private Student Lending and Servicing Market”

·       Wednesday, September 18, 2:00 p.m. – The Senate Banking Committee’s Economic Policy Subcommittee will hold a hearing on the macroeconomic impacts of potential tax reform in 2025.

·       Sometime During the Week of September 16 – TBD – Senate Banking Committee Chair Sherrod Brown (D-OH) may attempt to bring up for a committee vote the nomination of FDIC Chair-designate Christy Goldsmith Romero – along with several other nominations (an SEC Commissioner nomination, an insurance expert for the Financial Stability Oversight Council, and a nominee for Assistant Secretary of Treasury). 

House of Representatives

·       Wednesday, September 18, 10:00 a.m. – The House Financial Services Committee’s Subcommittee on Digital Assets, Financial Technology, and Inclusion will hold a hearing entitled “Dazed and Confused: Breaking Down the SEC’s Politicized Approach to Digital Assets.”  

·       Wednesday, September 18, 10:00 a.m. – The House Appropriations Transportation, Housing and Urban Development, and Related Agencies Subcommittee holds a hearing on "Oversight Hearing: Inspectors General of the Department of Housing and Urban Development, Department of Transportation, and the National Railroad Passenger Corporation."

·       Wednesday, September 18, 2:00 p.m. – The House Financial Services Committee’s Subcommittee on National Security, Illicit Finance, and International Financial Institutions will hold a hearing entitled “Protecting Americans Savings: Examining the Economics of the Multi-Billion Dollar Romance Confidence Scam Industry.”

US Regulatory Meetings & Events

Federal Reserve Board and Federal Reserve Banks

·       Tuesday and Wednesday, September 17 & 18 – The Federal Reserve Board’s Open Market Committee meets to discuss the economy and interest rates.  Federal Reserve Board Chair Jay Powell will give a press release on the 18th at 2:00 p.m.

U.S. Treasury Department

·       Monday, September 16, 1:30 p.m. – The Treasury Department holds a meeting of the Federal Advisory Committee on Insurance to discuss topics related to climate-related financial risk and the insurance sector, cyber insurance developments, and international insurance issues and to receive status updates from each of its subcommittees and from FIO on its activities and consider any new business.

·       Tuesday, September 17, 3:45 p.m. – Treasury Undersecretary for Domestic Finance Nellie Liang will speak at the Georgetown Univeristy Psaros Center for Financial Markets and Policy in Washington, D.C..

·       Thursday, September 19, 9:30 a.m. – The Treasury Department’s Community Development Financial Institutions Fund holds a meeting of the Community Development Advisory Board for a report from the CDFI Fund Director on the activities of the CDFI Fund and panel discussions related to the advisory board's subcommittees.

Department of Commerce

·       There are no significant events scheduled at this time.

Securities and Exchange Commission

·       Wednesday, September 18, 10:00 a.m. – The SEC will hold an Open Meeting. The agenda is whether to amend Regulation NMS to “allow the minimum pricing increments for quoting of certain NMS stocks, reduce the access fee caps, and enhance the transparency of better priced order.”

·       Thursday, September 19, 10:00 a.m. – the SEC’s Investor Advisory Committee meets at the SEC Headquarters. The committee will host two panels.  The first is entitled “Investment Advice: A History and Update on Who is Required to Serve in Your Best Interest” and the second “Key Topics from Securities Litigation: Shareholder Proposals and “Tracing” in Section 11 Litigation.”  The full agenda can be found HERE.  And a full listing of the Advisory Committee members can be found HERE.

Commodities Futures Trading Commission

·       Tuesday, September 17, 10:30 a.m. – CFTC Chair Rostin Behnam to speak at Georgetown University’s Psaros Center for Financial Markets and Policy Financial Markets Quality 2024.

·       Wednesday, September 18, 11:00 a.m. (CDT) – CFTC Commissioner Summer K. Mersinger will participate in the 2025 Outlook Panel at the Futures Industry Association’s Forum: Commodities 2024 in Houston, Texas.

·       Friday, September 20, 10:00 a.m. – The CFTC will hold an Open Meeting to consider Final Guidance regarding the Listing of Voluntary Carbon Credit Derivative Contracts.

FINRA

·       There are no significant events scheduled at this time.

Federal Deposit Insurance Corporation

·       Tuesday, September 17, 10:00 a.m. – The FDIC Board will hold an Open Meeting.  The agenda includes a proposed rulemaking on Custodial Deposit Accounts as well as the FDIC’s final statement of Policy on Bank Merger Transactions.

Office of the Comptroller of the Currency

·       There are no significant events scheduled at this time.

The Consumer Financial Protection Bureau

·       There are no significant events scheduled at this time.

National Credit Union Administration

·       Thursday, September 19, 10:00 a.m. – The NCUA holds a board meeting. 

Federal Trade Commission & Department of Justice Antitrust Division

·        Thursday, September 19, 11:00 a.m. – The FTC will hold an Open Commission Meeting. The Commission will hear a staff presentation on the Social Media and Video Streaming Services 6(b) Orders and a staff presentation on the Rule on the Use of Consumer Reviews and Testimonials.

·       Thursday, September 19, 1:00 p.m. – The FTC will hold an informal hearing on the Proposed Amendments to the Energy Labeling Rule.

Farm Credit Administration

·       There are no significant events scheduled at this time.

International Monetary Fund & World Bank

·       There are no significant events scheduled at this time.

North American Securities Administrators Association

·       There are no significant events scheduled at this time.

Trade Associations & Think Tank Events

Trade Associations

·       September 15 – 18, 2024 – SIFMA is holding its Ops2024 Conference in San Diego, California.

·       September 18, 10:00 a.m. – The International Institute for Finance holds an online conference entitled “Energy Supply Ratio: Examining a New Climate Disclosure Metric.”

Think Tanks and Other Events

·       Monday, September 16, 11:00 a.m. – The Wilson Center's Global Europe Program holds a discussion on "Cyprus Banks on the Frontline of Sanctions Compliance."

·       September 17, 1:00 p.m. – The Peterson Institute for International Economics holds a virtual discussion entitled “The Economic Danger of Revoking China’s Permanent Normal Trade Status.”

·       Wednesday, September 18, 2:00 p.m. – The Brookings Institution is holding an event entitled “Mobilizing the Market: The Barriers to Financing a More Scalable Climate Response”  Ethan Zindler, the Climate Counselor at the US Treasury Department, will give the keynote remarks.

·       Thursday, September 19, 5:00 p.m. – The American Enterprise Institute will hold an event entitled “The Forgotten Solution to the Housing Crunch: A Premier of the AEI Housing Center’s Documentary on Light-Touch Density.”

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