Senate Banking Committee

Sen. Elizabeth Warren praised Federal Reserve Gov. Lael Brainard on Wednesday for her approach to financial regulation while criticizing Chairman Jerome Powell as too protective of big financial institutions.

Sen. Patrick Toomey, the top Republican on the Banking Committee, criticized acting Comptroller of the Currency Michael Hsu and others in the Biden administration for advancing “social goals that are unrelated to banking.”

Democratic proposals to offer free accounts, restrict overdraft fees and cap interest rates have zero chance of passage. But analysts say lawmakers’ push for products that help consumers is influencing some banks’ decisions to institute reforms on their own.

A Senate hearing highlighted the two parties' starkly different views of digital assets, with Democrats warning of price manipulation and Republicans saying the government should just get out of the way.

Congress had been close to passing legislation to help banks serve cannabis firms. Now Democratic leaders have all but abandoned the effort, prioritizing a riskier proposal to decriminalize the drug.

Sens. Sherrod Brown and Elizabeth Warren criticized Federal Reserve Chair Jerome Powell over reg relief policies instituted by the central bank, signaling that some progressive lawmakers may be reluctant to give him a second term.

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.

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.

Sen. Pat Toomey of Pennsylvania, the Banking Committee's top Republican, is talking up the prospects of a bipartisan deal to overhaul Fannie Mae and Freddie Mac. But Democratic leaders sound less motivated to change the status quo for the government-sponsored enterprises.

With Rohit Chopra’s nomination now in its fourth month, some of the consumer bureau's rulemaking efforts remain on hold. Experts say Democrats first want the Senate to confirm a new member of the Federal Trade Commission to replace Chopra so that Republicans don't gain control.

Banking Committee Chair Sherrod Brown told acting Comptroller of the Currency Michael Hsu that the cryptocurrency firms approved to operate national trusts under prior agency leadership “seek access to the benefits of a bank charter” without meeting certain regulatory standards.

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.

The heads of the biggest banks have a chance to tout the industry's community outreach during the pandemic. But they can also expect tough questions about the Paycheck Protection Program as well as what banks are doing to address climate change, racial inequities and other hot-button issues.

Critics say the regulation issued by the Office of the Comptroller Currency is a gift to predatory lenders. But the trade organizations warned lawmakers that invalidating it will make it difficult for the agency to create an improved framework in the future.

Democratic senators seek to block the "true lender" regulation, which they say lets national banks sell loans to lenders who then avoid state usury caps. Republicans say overturning the rule would restrict access to credit.

The 2020 elections buoyed hopes that Congress would finally make it easier for financial institutions to serve cannabis businesses. But Democrats’ push to decriminalize marijuana — a nonstarter for most Republicans — threatens the more targeted effort.

Federal standards “are apt to gum up the works,” says Sen. Cynthia Lummis.

Senate Banking Committee Chairman Sherrod Brown asked banks involved with Bill Hwang’s Archegos Capital Management to explain their role in the firm’s implosion.

The full Senate could deadlock on Rohit Chopra’s nomination as the Banking Committee did. If that happens, Vice President Kamala Harris is expected to cast the decisive vote in his favor.

Democrats have proposed a Congressional Review Act resolution to strike down the OCC rule, arguing it enables "rent-a-bank" schemes.