#2023-2, January 20, 2023

Virtual Washington Visit for Connecticut, Massachusetts, and Rhode Island

This week, MBA leadership announced a Virtual Washington Visit in conjunction with the Connecticut and Rhode Island Bankers Associations.  These meetings will be held virtually on February 8^th and 9^th, 2023.  Later this year, we will visit Capitol Hill in person, so the focus of the February virtual meetings will be with our regulatory agency peers.  Meetings with the prudential regulators present an excellent opportunity to advocate for industry priorities and we strongly encourage member attendance at these events.  We expect to meet with the CFPB, FDIC, Federal Reserve Board, and the OCC.

A full schedule and agenda will be released upon confirmation.  If you have any questions or concerns, please do not hesitate to contact Brad Papalardo or Kathleen Murphy.

The Office of Financial Research (OFR) Issues Annual Report to Congress

Last week, the OFR issued its annual report to Congress on financial stability within the United States’ (U.S.) economy, with research data current through September 2022.  The report notes that multiple factors have increased the overall risk to markets in the U.S. with six primary stressors noted:  climate-related financial risks; cryptoasset volatility; elevated volatility in Treasury markets; increases in state-sponsored cyberattacks; surges in commodity pricing; and weaker economic growth overall

The banking sector remains well capitalized with maintained risk-based capital ratios well above regulatory minimums.  Additionally, the agency reports that no FDIC-insured institution has failed since October 2020.

To read this annual report to Congress, please click here.

McCarthy Elected Speaker, Brinksmanship on Capitol Hill Approaching

Kevin McCarthy (R-CA) was elected Speaker of the House shortly after midnight on January 7^th.  As we noted in our previous Washington Update, Speaker McCarthy had to make several concessions to Republican party members to be elected Speaker, with news reports recently indicating that several concessions relate to government spending, the U.S. debt ceiling, and our commitment to repay our debts.  The Speaker has used his pulpit in recent weeks to reinforce the GOP-controlled House’s priority of reviewing spending and addressing future expenditures with haste.

Treasury Secretary Yellen has provided regular updates to Congress, the White House and national media outlets about the debt ceiling, as well.  This Thursday, Secretary Yellen sent a letter to all members of Congressional leadership about the measures now being enacted by the Treasury department to manage our financial obligations.  These measures have been utilized by Treasury Secretaries for both parties in recent decades as spending cliffs have approached.  Ms. Yellen has indicated that Treasury’s extraordinary options may erode by early June.

To read Secretary Yellen’s letter to Congressional leadership, please click here.
To read additional news about the debt ceiling standoff from CBS News, please click here.