Financial Services Weekly Update

Regulatory Developments

Financial Crimes Enforcement Network.

On Tuesday, FinCEN issued a Final Rule defining certain housing government sponsored enterprises as financial institutions for the purpose of requiring them to establish anti-money laundering programs and report suspicious activities pursuant to the Bank Secrecy Act. The requirements to establish anti-money laundering programs and report suspicious activities are intended to help prevent fraud and other financial crimes. This rule is effective April 28, 2014. The compliance date is August 25, 2014.

Comptroller of the Currency.

On Friday, the Office of the Comptroller of the Currency (OCC) made technical amendments to its regulations governing national banks and Federal savings associations to make those regulations consistent with the recently adopted Basel III Capital Framework. As part of these technical amendments, the OCC revised and clarified its regulations governing subordinated debt applicable to national banks and Federal savings associations. This interim final rule is effective March 31, 2014.

In the News

House Passes Bill Limiting Consumer Regulator:

House lawmakers took aim at the Consumer Financial Protection Bureau on Thursday, passing Republican-backed legislation that would curtail the power of the federal regulator.

Pressure in London Metal Exchange Warehousing Policy Shifts to Regulators:

There is a growing recognition that the LME may have reached the limit of what it can do. Some are now renewing a push for U.S. regulators and politicians to take up the fight for even tougher oversight of the world's oldest and biggest metals market and its warehousing network.

 

Bitcoin Derivatives Sprout as Regulators Play Catch-Up:

 

The regulation of Bitcoin, let alone derivatives of it, is an unresolved question in many parts of the world. Even as regulators and investors struggle to grasp Bitcoin’s many uses - - including investment vehicle, payment-processing system and money-laundering tool -- they are now confronted with the additional complexities of an emerging derivatives market where entrepreneurs say current rules don’t apply.

 

Yellen: Fed Doesn’t Have Authority to Regulate Bitcoin:

Federal Reserve Board Chair Janet Yellen said Thursday that the central bank does not have the power to supervise Bitcoin, the most widely recognized digital currency.

 

Hope on Horizon for Home-Supply Crunch - Builder Borrowing Picks Up:

 

Bank lending for land development and construction is turning up after hitting a 14-year low early last year, a sign that the supply crunch for new homes could ease in coming months.

 

Private Insurers Start to Offer Flood Coverage:

Private insurers are dipping a toe into the U.S. market for flood coverage, with a handful of companies now competing with the U.S. government to sell policies to homeowners.

 

Supreme Court Rules Allen Stanford Ponzi Victims Can Sue Third Parties:

Victims of R. Allen Stanford's $7 billion Ponzi scheme can sue law firms and other third parties on allegations they aided the fraud, the U.S. Supreme Court ruled Wednesday.

 

Fed’s Fisher – U.S. Should Halt Major Asset Purchases When Feasible:

The U.S. central bank should completely stop with its large scale asset purchases as soon as feasible, Dallas Federal Reserve Bank President Richard Fisher said on Friday.

 

Fed Board Should Vote on Bank Enforcement Actions:

The Federal Reserve Board is likely to begin voting on significant enforcement actions against financial institutions, Chair Janet Yellen said Thursday.

 

Economy in U.S. Expanded at Slower Pace Than First Estimated:

The economy in the U.S. expanded at a slower pace in the fourth quarter than previously estimated, giving the expansion less momentum heading into 2014.

Upcoming Meetings and Hearings

Senate Banking, Housing and Urban Affairs Committee

• Full Committee
  Nomination Hearing: Dr. Stanley Fischer, of New York, to be a Member and Vice Chairman of the Board of Governors of the Federal Reserve System; The Honorable Jerome H. Powell, of Maryland, to be a Member of the Board of Governors of the Federal Reserve System; The Honorable Lael Brainard, of the District of Columbia, to be a Member of the Board of Governors of the Federal Reserve System; Mr. Gustavo Velasquez Aguilar, of the District of Columbia, to be an Assistant Secretary of the U.S. Department of Housing and Urban Development; and Mr. J. Mark McWatters, of Texas, to be a Member of the National Credit Union Administration Board
  Tuesday, March 4, 2014
  10:00am
  538 Dirksen Senate Office Building

• Full Committee
  MAP-21 Reauthorization: The Federal Role and Current Challenges to Public Transportation
  Thursday, March 6, 2014
  10:00am
  538 Dirksen Senate Office Building

House Financial Services

• Oversight & Investigations Subcommittee
  The Growth of Financial Regulation and its Impact on International Competitiveness
  Tuesday, March 4, 2014 
  10:00am
  2128 Rayburn House Office Building

• Financial Institutions & Consumer Credit Hearing
  Data Security: Examining Efforts to Protect Americans' Financial Information
  Wednesday, March 5, 2014
  10:00am
  2128 Rayburn House Office Building