Hannah Lang

The Basel Committee on Banking Supervision issued a proposal this month laying out how banks should treat cryptocurrencies held on their balance sheets. It could give stablecoins, which are tied to traditional assets, an edge over more volatile digital assets like Bitcoin.

A congressional hearing on reforming the National Flood Insurance Program focused on whether mortgage companies need to disclose incremental risks even if a homeowner lives outside a federally designated floodplain.

Federal Reserve Chairman Jerome Powell said the market dislocations of the past year resulting from the pandemic had changed the impact that the supplementary leverage ratio was having on the largest banks. After temporarily easing the requirement, the central bank is considering longer-term reforms.

By 2023, the Federal Reserve expects to launch a service that would allow businesses and consumers to complete payments in real time. But a digital currency it's now studying could have similar benefits — while potentially removing the need for bank intermediaries.

The Department of Housing and Urban Development reinstituted the “affirmatively furthering fair housing" measure, which the Trump administration had argued was overly prescriptive, and promised a later rulemaking to bolster the policy.

The Federal Housing Finance Agency said it is reviewing compensation policies for Fannie Mae and Freddie Mac and requesting feedback from the public. Some have said the $600,000 limit for executives imposed by Congress makes it hard to find talent.

The Federal Reserve has signaled the need for congressional authorization if the central bank moves ahead with creating a digital currency. But senators raised questions at a hearing about whether it would help consumers, how it would complement private-sector banking and other issues.

Financial institutions spent nearly $214 billion last year — an 18% jump from 2019 — to meet regulatory requirements for fighting financial crimes, a new study says. The spending included more staffing to manage risks posed by customer growth.

Nineteen of the nation's largest banks plus four smaller firms will be tested against baseline and severely adverse economic scenarios. The central bank will release details on their performance on June 24.

Scams in which a real person’s information is used to create fictitious businesses or individuals have led to $6 billion in credit losses. The Federal Reserve has developed a standard definition for synthetic identity fraud so lenders can distinguish it from traditional identity theft.

Federal Reserve Vice Chair of Supervision Randal Quarles suggested that the massive influx of reserves stemming from the central bank's COVID-19 response may lead to a recalibration of the supplementary leverage ratio.

The funding requests break sharply with the Trump administration's calls to eliminate key housing funds and backing for community development financial institutions. The White House also wants to substantially increase the budgets of the Treasury Department and the Small Business Administration.

The Treasury secretary previewed President Biden's budget by urging lawmakers to fund the Financial Crimes Enforcement Network's establishment of a beneficial ownership regime.

The Federal Reserve's Randal Quarles, in testimony before the Senate Banking Committee, sought to fend off criticism from Sen. Elizabeth Warren that the central bank treated with kid gloves some foreign banks under its jurisdiction that later took heavy losses. The hearing also featured a discussion about a new framework for digital assets.

Sen. Pat Toomey of Pennsylvania, the top Republican on the Banking Committee, told three Federal Reserve regional presidents that a series of events tied to the impact of racism on the job market and housing systems is not within the scope of the central bank.

The White House directive may lead regulators to develop new mortgage underwriting standards, stress-test requirements and flood insurance policy, observers said.

While cryptocurrencies could have benefits, they have “not served as a convenient way to make payments, given, among other factors, their swings in value,” said the head of the Federal Reserve. He also detailed imminent Fed research on a central bank digital currency.

Mortgage lenders have much riding on a yearslong effort to overhaul a program that requires homeowners to hold policies in flood-prone areas. A congressional panel meeting to discuss the issue was once again split between lawmakers from storm-threatened states and those concerned about government costs.

After much anticipation, the Federal Reserve last year finally joined the Network for Greening the Financial System, which develops regulatory best practices for combating climate risks. But all U.S. banking regulators must participate for the effort to succeed, some observers argue.

Regulators around the world are exploring how to assess banks' exposures to climate change risks. But they'll have to tackle legal, economic and modeling problems that don’t have obvious solutions.