This Week in Policy (1/3)
Even with the holidays, a lot has happened since our last policy issue on December 20th!
FDIC Chair Jelena McWilliams resigned after a fallout with her FDIC Board co-chairs in which they overruled her in moving forward with a request for information on bank merger rules. Former FDIC Chair Martin Gruenberg will take over, strengthening Democratic alignment across federal financial regulators but leaving CFPB Chair Rohit Chopra as the only Senate-confirmed federal banking chair. It was Gruenberg, after all, who worked with Chopra and OCC Acting Chair Michael Hsu to press forward with examining the effectiveness of current bank merger rules in promoting competition. The Department of Justice also jumped into the bank mergers competitiveness review.
The CFPB’s request for information on payments technology received over 90 comments from the public, including bank industry groups, consumer advocates, and everyday consumers. Despite tech companies being the target, banks have found themselves in public crosshairs, with many comments also criticizing Zelle. A group of 65 consumer advocates pressed for greater protections, for P2P players to abide by EFTA unauthorized transfers rules (which the CFPB already clarified in December), and to consider data sharing issues including alignment with financial data privacy rules like GLBA. Internal review is surely underway at the CFPB, who also pushed a similar request on BNPL later in December.
SEC Chair Gary Gensler hired a new senior advisor to focus on crypto rulemaking. Corey Frayer formerly worked at Sherrod Brown’s Senate Banking Committee and for Maxine Waters at the House Financial Services Committee, and will be tasked with managing interagency work on crypto. Thus far the SEC has largely focused on crypto as a sole regulator, blocking two more bitcoin ETFs last week. But this move signals further collaborative work across agencies as each considers its crypto regulatory approach. Meanwhile, Robinhood hired a former colleague of Genslers, Dan Gallagher, as their new General Counsel.
The CFPB shuttered fintech lender LendUp for violating an agency order stemming from 2019. CFPB Chair Rohit Chopra pointed explicitly to LendUp’s venture capital backing as a signal of his skeptical eye towards tech innovation and VC-backed markets.
NFTs come to Congress via a fundraising effort by Arizona Senate Candidate Blake Masters, who sold digital versions of “Zero to One,” the book he co-authored with Peter Thiel, and raised $575,000 to fund his campaign.