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Daily Financial Regulation Update -- Thursday, February 27, 2021

February 27, 2021

By FedACTion Task Force

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Administration Changes

Appointments/Confirmation Hearings

Department of the Treasury – Janet Yellen (effective January 26, 2021)

Consumer Financial Protection Bureau – Rohit Chopra (Nominee)

Securities and Exchange Commission – Gary Gensler (Nominee)

Small Business Administration – Isabel Guzman (Nominee)

Commodity Futures Trade Commission

National Credit Union Administration – Todd M. Harper

Department of Housing and Urban Development – Marcia Fudge (Nominee)

Department of Education – Miguel Cardona (Nominee)

Congress

Click here to view the full text of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), Enacted March 27, 2020.

Click here to view the full text of the Paycheck Protection Program Increase Act of 2020, Enacted April 24, 2020.

Click here to view the full text of the Paycheck Protection Program Flexibility Act of 2020, Enacted June 5, 2020.

Click here to view the full text of the Consolidated Appropriations Act, 2021, Enacted December 27, 2020.  

Click here to view a running list of proposed legislation from the Senate Committee on Banking, Housing, and Urban Affairs, Senate Committee on Small Business and Entrepreneurship, House Committee on Financial Services, and House Committee on Small Business.

U.S. House of Representatives

Committee on Financial Services

Congresswoman Waters Announces March Hearing Schedule

February 26, 2021

Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, announced the Committee hearing schedule for March 2021.

Committee on Small Business

Committee Report Outlines COVID’s Devastating Impact on Black-Owned Small Businesses

February 26, 2021

House Small Business Committee Chairwoman Nydia M. Velázquez released a report detailing the devastating impact the coronavirus pandemic has had on Black-owned businesses in the United States. The report surveyed the current business landscape for black entrepreneurs and proposed policy solutions to spark a more equitable recovery.

Federal Agencies

U.S. Department of the Treasury

Preliminary Report on Foreign Holdings of U.S. Securities at End-June 2020

February 26, 2021

The U.S. Department of the Treasury (Treasury) issued a report titled “Preliminary Report on Foreign Holdings of U.S. Securities at End-June 2020.”

Federal Reserve Board

Release of Updated Sections of the Federal Financial Institutions Examination Council’s Bank Secrecy Act/Anti-Money Laundering Examination Manual

February 26, 2021

The Board of Directors of the Federal Reserve System released a letter titled “Release of Updated Sections of the Federal Financial Institutions Examination Council’s Bank Secrecy Act /Anti-Money Laundering Examination Manual.” According to the letter, members of the Federal Financial Institutions Examination Council released several updated sections and related examination procedures to the Bank Secrecy Act (BSA)/Anti-Money Laundering (AML) Examination Manual (Manual). The Manual provides instructions to examiners when assessing the adequacy of a bank’s BSA/AML compliance program, relative to its risk profile, and the bank’s compliance with BSA regulatory requirements. The new and revised sections provide further transparency into the BSA/AML examination process and do not establish new requirements.

Inactive or Revised SR Letters Related to the Federal Reserve’s Supervisory Expectations for a Firm’s Boards of Directors

February 26, 2021

The Board of Directors of the Federal Reserve System (Federal Reserve) released a letter titled “Inactive or Revised SR Letters Related to the Federal Reserve’s Supervisory Expectations for a Firm’s Boards of Directors.” The purpose of the letter is to present the results of the Federal Reserve’s review of supervisory expectations for boards of directors of bank and savings and loan holding companies that are presented in certain existing Supervision and Regulation and Consumer Affairs letters. The purpose of the initiative was to review and revise, as appropriate, supervisory views on boards of directors for all domestic bank holding companies and savings and loan holding companies contained in certain existing Supervision and Regulation and Consumer Affairs letters to better align with the Federal Reserve’s supervisory framework.

Supervisory Guidance on Board of Directors' Effectiveness

February 26, 2021

The Board of Directors of the Federal Reserve System released a letter titled “Supervisory Guidance on Board of Directors’ Effectiveness.” The guidance describes the key attributes of effective boards at large domestic bank holding companies and savings and loan holding companies to: (i) set clear, aligned and consistent direction regarding the firm's strategy and risk appetite; (ii) direct senior management regarding the board’s information needs; (iii) oversee and hold senior management accountable; (iv) support the independence and stature of independent risk management and internal audit; and (v) maintain a capable board composition and governance structure. The guidance also includes illustrative examples of effective board practices.

U.S. Securities and Exchange Commission

The Division of Examinations’ Continued Focus on Digital Asset Securities

February 26, 2021

The U.S. Securities and Exchange Commission Division of Examinations (Division) issued a Risk Alert to provide observations made by Division staff during examinations of investment advisers, broker-dealers and transfer agents regarding digital asset securities that may assist firms in developing and enhancing their compliance practices. 

Environmental, Social and Governance (ESG) Funds

February 26, 2021

The U.S. Securities and Exchange Commission issued an Investor Alert and Bulletin titled “Environmental, Social and Governance (ESG) Funds” in order to educate investors about ESG Funds, including important questions to ask if investors are considering whether to invest in them.

U.S. Department of Labor

Guidance on Continuation of Relief for Employee Benefit Plans and Plan Participants and Beneficiaries Due to the COVID-19 Outbreak

February 26, 2021

The U.S. Department of Labor (DOL) released a notice which provides guidance on the duration of the COVID-19-related relief provided by Employee Benefits Security Administration Disaster Relief Notice 2020-01 and the Notice of Extension of Certain Timeframes for Employee Benefit Plans, Participants, and Beneficiaries Affected by the COVID–19 Outbreak, issued by the DOL, the Department of the Treasury and the Internal Revenue Service.

International

Bank of England

Solvency Distress Contagion Risk: Network Structure, Bank Heterogeneity and Systemic Resilience

February 26, 2021

The Bank of England released a paper titled “Solvency Distress Contagion Risk: Network Structure, Bank Heterogeneity and Systemic Resilience.”

How Do Secured Funding Markets Behave under Stress? Evidence from the Gilt Repo Market

February 26, 2021

The Bank of England released a paper titled “How Do Secured Funding Markets Behave under Stress? Evidence from the Gilt Repo Market.”

Optimal Policy with Occasionally Binding Constraints: Piecewise Linear Solution Methods

February 26, 2021

The Bank of England released a paper titled “Optimal Policy with Occasionally Binding Constraints: Piecewise Linear Solution Methods.”

Speech: Inflation: A Tiger by the Tail?

February 26, 2021

Andy Haldane, Chief Economist and Member of the Monetary Policy Committee at the Bank of England, gave a speech titled “Inflation: A Tiger by the Tail?”

Speech: The UK’s Progress on Resolvability

February 26, 2021

Dave Ramsden, Deputy Governor, Markets and Banking at the Bank of England gave a speech titled “The UK’s Progress on Resolvability.”