This Week in Policy (1/31)
For those thinking this would become only a crypto-policy newsletter, fear not - fintech, antitrust, and macro policy are still atop regulators’ minds. Payments seem a particular topic both in the US and UK, as regulators want to see fees come down for consumers and merchants.
The CFPB continued its torrent of activity. First the regulator opened public comments on Buy Now, Pay Later following its earlier request for information from major providers. Then Chair Rohit Chopra announced a major initiative targeting “junk fees” charged by banks and credit card providers. In its semiannual regulatory agenda, the CFPB listed priority initiatives underway including those on small business reporting and consumer access to financial data. It’s already been a busy year at the CFPB, and its only January.
New York State confirms Adrienne Harris as lead financial regulator. After a stint in academia following her service at the Treasury Department, Harris arrives at a regulator that’s shown keen interest in innovation. Some consumer advocates opposed her nomination, citing her proximity to fintech companies. Given new NYC Mayor Eric Adams’ warm embrace of crypto, critics framed her nomination as a sign the state may become too tech-friendly. Given Harris’ primary job will be to regulate the 3,000 financial institutions operating in New York, we’ll see how much time she has to devote to the innovation file.
Fed plays a part in the Diem shutdown. According to reports, the Federal Reserve did not approve Silvergate Bank to launch the stablecoin that would’ve backed Meta’s Diem project. Diem now plans to sell its tech to Silvergate, which could seek other partners. While Diem, formerly Libra, took a winding path to seeking regulatory approval, the saga shows the impact regulators can have on products even before they launch.
Senate hearings for Biden’s Fed nominees will signal their viability. Thursday’s Senate Banking Committee hearing will feature questions to Biden’s nominees Sarah Bloom Raskin, Lisa Cook, and Phillip Jefferson. Committee Chair Sherrod Brown will likely pose questions about economic growth and full employment, while Republicans will scrutinize Raskin’s positions on the Fed’s role in climate change.
Antitrust moves in the Senate. A bipartisan group in the Senate Judiciary Committee voted to advance the American Innovation and Choice Act to the full chamber where it’ll be further amended and examined. App companies wrote letters of support of the bill, while industry groups like the Chamber of Commerce voiced opposition. This could become an omnibus bill, absorbing the range of antitrust proposals brought forward over the past two years.
UK Payment Regulator wants more card issuance competition. The regulator wants new tools to help merchants identify the best pricing for card acceptance, and more transparency in contracting with card issuers.