This Week in Policy (1/17)
Those 2022 predictions calling for a pivotal year in fintech regulation look good so far. Just two weeks in, we already have plenty to track. We’re here to digest and share just the biggest news you need to know.
Biden nominates three Board Governors; confirmation won’t be easy: After nominating Jerome Powell for Chair and Lael Brainard for Vice Chair, President Biden announced three more nominees to fill vacant seats at the Federal Reserve Board of Governors. Sarah Bloom Raskin brings Board experience and is as a leading thinker on the Fed’s role in addressing climate risk. Lisa Cook, an Michigan State professor who could become the Board’s first black female governor, would bring a lens of social equity to maximizing employment. If confirmed alongside Cook, Philip Jefferson, a Davidson College academic, would make this the most diverse board yet. They’ll face tough confirmation in the Senate, as Republicans will frame these as partisan nominations for an independent regulator.
UK Regulators make moves on crypto, trading data, cloud services: The same week the UK’s parliament launched a crypto task force, a Committee in the House of Lords decided against pursuing a Central Bank Digital Currency. Meanwhile, the Financial Conduct Authority continued granting cryptoasset licenses to registered firms like Bottlepay, which called itself the first Lightning network to receive such approval. FCA also published a consultation on the availability of credit rating data and its impact on companies’ ability to go public. At the systemic level, the Prudential Regulation Authority is looking at cloud services providers as a potential source of risk to the banking system, due to banks’ reliance on their services.
U.S. banks, fintech companies, and regulators all call for… more regulation: Bloomberg reported banks call for increased fintech scrutiny, the same week fintech CEO Jason Gross published an op-ed saying this is the year open banking regulation could bring even more fintech to consumers. OCC Acting Comptroller Michael Hsu gave a speech on the future of crypto regulation, warning against the potential risks of a run on stablecoins. Former Uber lobbyist Bradley Tusk launched a Crypto + Fintech Practice to join in on the fun.
OCC fintech charter clears a legal hurdle: When the OCC announced a special purpose fintech charter, Figure was among the first nonbanks to apply. They immediately faced a hurdle when the Conference of State Bank Supervisors (CSBS) filed suit against the OCC, claiming it had exceeded its legal authority. In December, Figure turned the tables when they announced they’d seek FDIC insurance, and the CSBS has since dropped their suit. With Acting Chair Michael Hsu saying in November the OCC would soon release guidance on fintech charters, this move can only add clarity to the space.
Estonia’s AML law targets DeFi, crypto: A country known as a global leader in digital identity, amended its recently updated AML law to magnify fees charged to companies dealing in digital assets. Law firms responded by taking it “off the list of crypto-friendly jurisdictions.”
Stay tuned for more every week!