News
"I've mentioned this in the past, but before I got into banking I used to be an environmental policy reporter, specifically covering hazardous waste and water quality policy issues. In environmental policy, a big part of the game is covering the courts because virtually every single rule the Environmental Protection Agency finalizes is challenged in court. A Supreme Court hearing is informally understood to be the final stage of the rulemaking process.
When I found my way into banking policy, one of the most noticeable differences was how infrequently banks sued their regulators — as in, it virtually never happened. And that wasn't because agencies weren't making new rules — this was during the long implementation phase of Dodd-Frank and Basel III, so agencies were making rules all the time. And banks didn't necessarily like those rules, either — they just didn't sue."
"U.S. Senator Cindy Hyde-Smith (R-Miss.) today introduced a bill to encourage the formation of new banks in underserved and rural areas by easing federal regulatory restrictions that have stifled bank and capital availability in Mississippi and other states.
The Promoting Access to Capital in Underbanked Communities Act (S.3937) would encourage the formation of new de novo banks by instituting a three-year phase-in period during which newly-chartered banks would be given time to meet less stringent capital requirements as they adapt to a business model that aligns with the needs and circumstances of the communities they serve.
'We need more community banks in our towns that understand the needs of everyday Mississippians,' Hyde-Smith said. 'We need to find a path to overcome stifling banking regulators and other factors that limit banking options in rural and underserved communities. This legislation marks a step toward expanding credit accessibility for Mississippians, including small business owners, entrepreneurs, farmers, and the list goes on.'"
"House Majority Whip Tom Emmer talks about his fears for the future of small banks—and how to reverse course—and why his movement to ban the Fed from creating a CBDC has gained steam. He also tackles his predictions for the House elections this year, the CFPB's push against so-called "junk" fees and how he became one of the leading advocates for cryptocurrency in Congress."
"In remarks made Thursday to the Senate Banking Committee, Federal Reserve Chair Jerome Powell said, 'he expects some U.S. banks to fail in the coming months because of declining values and defaults in their commercial real estate loan portfolios.'
According to reporting by multiple outlets, including The Hill, Powell indicated that 'the risk is tied to small and midsized banks, and there is no systemic risk to the banking sector posed by the potential collapse of major institutions.'"
"The banking industry has shown resilience after a period of liquidity stress in early 2023. Full-year net income remained high, overall asset quality metrics were favorable, and the industry's liquidity was stable.
While the banking industry reported a modest decline of 2.3 percent in full-year net income, 2023 earnings of $257 billion remained well above the levels reported before the pandemic. The industry's net operating revenue crossed the $1 trillion mark for the first time in QBP history, and the full-year net interest margin was 3.30 percent, the highest reported margin since 2019. Nevertheless, these positive top-line results were offset by higher noninterest expense, provision expense, and realized losses on securities."
"A federal judge in Texas has ruled that the U.S. Minority Business Development Agency, founded during the Nixon administration, must avail itself to disadvantaged entrepreneurs of all races and ethnicities, including whites.
The summary judgment rendered on Tuesday by U.S. District Judge Mark Pittman, appointed in 2019 by then-President Donald Trump, was the latest in a recent series of federal court decisions rolling back decades of affirmative action programs aimed at remedying racial discrimination."
"Jana Dalton used the same bank for 40 years, depositing checks and withdrawing cash from the account she first opened at age 16. Now, she's switching banks.
PNC Financial Services Group, the sixth largest U.S. lender, bought her hometown bank. Two years ago, it closed Dalton's original branch and has since shut down three nearby locations. Her newest local branch, 9 miles away, sometimes turns her away when she doesn't sign up for an appointment online.
'There's too many bells and whistles and we just need to back up and go back to customer service,' said the golf-course operator in Miamisburg, Ohio. Her new local bank, Farmers & Merchants Bank, has $291 million in assets compared with PNC's $562 billion."
"In early March 2023, three banks failed in just a few days. These banks—Silicon Valley Bank, Signature Bank, and First Republic—were among the biggest banks to fail in U.S. history. The SVB demise triggered the largest single-day bank run in U.S. history and led to aggressive action by the Federal Reserve, FDIC, Treasury Department, and others to prevent spillovers to the rest of the U.S. banking system. One year later, what lessons can be drawn? What changes should regulators and bankers make to reduce the chances of a repeat? And what did the March 2023 incident demonstrate about the adequacy of current approaches to resolving failing banks?
On March 5, the Brookings Institution's Hutchins Center on Fiscal & Monetary Policy and Center on Regulation and Markets (CRM) reflected on these questions, beginning with a panel on shortcomings of bank supervision, the lender of last resort function, and bank risk management practices that exacerbated the March 2023 crisis and how best to address them. A conversation followed with Rep. Patrick McHenry (R-NC), chair of the House Financial Services Committee. The final panel focused on the weaknesses of the current approach to resolving bank failures that were exposed in March 2023 and how to remedy them. This event is a part of CRM's Series on Financial Markets and Regulation."
"In recent years, special purpose credit programs (SPCPs) have grown in popularity as a way for policymakers to allow lenders to offer credit to borrowers of protected classes. These programs can be people based or place based, offering special purpose credit to individual borrowers or to areas where many of them live, respectively. When implemented effectively, SPCPs can build wealth, reduce housing segregation, and help close the racial homeownership gap.
But how can lenders ensure that SPCPs help the households who need it most? In partnership with the National Fair Housing Alliance, the Urban Institute created this resource to help lenders document the need for SPCPs. This tool will help lenders with the first steps of the process outlined by guidance from the Consumer Financial Protection Bureau (CFPB), particularly assessing the need for an SPCP through a broad market analysis.
This tool offers current and historical market-specific data to make the case for SPCPs serving households of color; an interactive Excel file based on market-specific data to assess place-based versus people-based options that can be useful to program design, targeting, and goal setting; and documentation supporting the written plan."
"The Consumer Financial Protection Bureau has finalized its proposal to cut credit card late fees to $8 from $32, part of a wide-ranging effort by the administration to crack down on unfair fees ahead of President Biden's State of the Union address later this week.
On Tuesday, the CFPB will release a final rule that is expected to save consumers $10 billion a year in credit card late fees.
'Late fees have gotten out of control,' said CFPB Director Rohit Chopra on the White House call Monday with reporters to announce the final rule to reduce credit card late fees."