#2022-03, January 21, 2022

Fed Releases Report on US Central Bank Digital Currency

This week, the Federal Reserve released a report that details the potential benefits and risks of creating a US central bank digital currency (CBDC).  The Fed’s report did not take a position on creating a CBDC; however, the Fed did indicate that it “will continue to explore a wide range of design options.”  As we have reported previously, the Federal Reserve Bank of Boston has played a leading role in the Fed’s CBDC and crypto currency research over the last several years.

The report notes that a CBDC “would best serve the needs of the United States by being privacy-protected, intermediated, widely transferable and identity-verified.”  An intermediated model through which the private sector would facilitate the management of CBDC holdings and payments through accounts or digital wallets is one of the potential structures the Fed has considered and the report states that such a model “would facilitate the use of the private sector’s existing privacy and identity-management frameworks; leverage the private sector’s ability to innovate; and reduce the prospects for destabilizing disruptions to the well-functioning US financial system.”

However, the agency did acknowledge that a CBDC could, depending on its design, “fundamentally change the structure of the US financial system, altering the roles and responsibilities of the private sector and the central bank.”   Ultimately, the Fed concluded that it “does not intend to proceed with the issuance of a CBDC without clear support from the executive branch and from Congress, ideally in the form of a specific authorizing law.”  The paper also requests public feedback on these topics and comments will be accepted until May 20.

To read the report, click here.

CFPB Report Finds Banks Providing Most Public D&I Information of Financial Services Firms

In a report issued earlier this week by the Consumer Financial Protection Bureau’s (CFPB) Office of Minority and Women Inclusion, the agency found that banks and other depository institutions have the highest amount of publicly available information about diversity and inclusion in the financial services sector.  The report also found that few organizations in financial services besides banks had either a dedicated diversity and inclusion executive or any formal body directing DEI initiatives.

In addition, the CFPB noted that banks had the most supplier diversity in the financial services sector with nearly 60 percent of institutions surveyed having minority and women-owned business programs.  The Bureau also found that almost half of sampled banks published information on their diversity and inclusion strategic plans.

The CFPB plans to use the data collected as part of the report to provide examples of diversity and inclusion best practices, resources, and peer success stories to financial institutions.

To read more, click here.

Registration for ABA Washington Summit Now Open

The American Bankers Association (ABA) is hosting its annual Washington Summit in Washington, DC on March 7-9, 2022.  The meeting will feature opportunities to hear from key federal policymakers and regulators throughout the conference.  In conjunction with the Washington Summit, ABA is also hosting the Mutual Community Bank Forum, Emerging Leaders Forum, and the Women’s Leadership Forum.  In addition to the in-person meeting, portions of the program will be available in a virtual, livestream format this year, so staff at your bank can participate.  

All member bankers are encouraged to attend the Washington Summit.  More information on this year’s program and a link to register are available here.