#2021-22, July 16, 2021

President Signs Sweeping Executive Order on Competition, Data Access and M&A Rules

Late last week, President Biden issued a sweeping executive order on competition issues throughout the economy.  Among provisions affecting the banking and financial services industries are a requirement that the Consumer Financial Protection Bureau (CFPB) complete its implementation of Section 1033 of the Dodd-Frank Act and to enforce the prohibition on unfair, deceptive or abusive acts and practices consistently with Section 1031 of Dodd-Frank.  

In addition, the executive order directs the Justice Department and federal banking regulators to review current policies on bank mergers and for the Treasury Department to report on the effects of large tech companies’ and other nonbanks’ entry into financial services.  Last year, the CFPB issued an advance notice of proposed rulemaking on Section 1033, which addresses consumers’ rights to access and control information about their accounts.  However, the rulemaking was never formalized with the change in administrations.  

To read more, click here.

Regulators Propose Third-Party Risk Management Guidance

The federal banking regulatory agencies this week issued a joint proposal to manage risks associated with third-party relationships, including relationships with nonbank fintech firms.  The proposal is designed to assist banks in identifying and addressing the risks associated with third-party relationships and responds to industry feedback requesting alignment among the agencies about third-party risk management guidance.

According to the regulators, the guidance addresses the level of risk, complexity and size of the banking organization, as well as the nature of the third-party relationship.  If finalized, the new guidance will replace each agency’s existing guidance on the topic and would be directed to all banking organizations supervised by the agencies.  Comments on the proposal are due 60 days after publication in the Federal Register.

To read more, click here.

MBA Comments on FDIC Digital Assets RFI; Digital and Cryptocurrency Webinar Scheduled for August 12

This week, the Association submitted a comment letter in response to the Federal Deposit Insurance Corporation’s (FDIC) Request for Information (RFI) on Digital Assets.  As we reported previously, the RFI noted the novel and unique considerations related to digital assets and asked for industry and public feedback to inform the agency’s understanding in this area from a banking perspective.  

MBA’s comment letter states that a consistent definition of digital assets is essential as they become more prevalent in the financial system.  We also noted that the consumer protection and risk management regulatory regimes must be standardized for banks and non-banks in this space.  To read the Association’s comment letter, please click here.  

To assist our members in understanding the digital asset landscape, MBA is hosting an industry primer  webinar on digital and cryptocurrencies on Thursday, August 12, 2021.

Powell ‘Undecided’ on Central Bank Digital Currency

In related news, Federal Reserve Chairman Jerome Powell said this week that he is “legitimately undecided about whether the benefits outweigh the costs” of creating a central bank digital currency (CBDC).  He emphasized that a CBDC should have broad support before any initiative moves forward.  His comments were included in his testimony to the Senate Banking Committee and the House Financial Services Committee this week.

Powell also noted that the Fed is at a “critical point” in its deliberations over whether and how to offer a CBDC and signaled that the agency would publish a report “around early September” on CBDCs and other digital payments.  He also discussed the potential for regulating stablecoins under a framework similar to those that apply to bank deposits or money market funds.

To view Powell’s testimony before the Senate Banking Committee, click here.  
To view his testimony before the House Financial Services Committee, click here.