Politics

Higher capital requirements tend to drive certain lending activities away from banking and toward so-called shadow banks. How regulators shore up banks without driving their customers away is the source of a spirited philosophical debate in Washington.

The changes, which are being discussed as part of a sweeping review by the Federal Housing Finance Agency, would amount to the most dramatic reshaping of the $1.6 trillion system in decades.

Yellen said that she sees diminishing risk for the U.S. to fall into recession, and suggested that a slowdown in consumer spending may be the price to pay for finishing the campaign to contain inflation.

Sen. Elizabeth Warren, D-Mass., in a letter to the Consumer Financial Protection Bureau, challenged the idea that credit card late fees serve as a deterrent to delinquency, instead saying issuers told her office that some of them earn tens of millions of dollars collecting late fees.

Banks and credit unions are often at odds, but when it comes to fighting the Consumer Financial Protection Bureau's proposed $8 late fee cap and changes to interchange fees, they have put their differences aside.

The legislation would have allowed nonbank lenders to charge more for consumer installment loans. Gov. Ron DeSantis, a Republican presidential candidate, explained his veto by saying that the bill might result in additional consumer indebtedness.

The Federal Reserve's highly anticipated stress tests indicate that all banks are sufficiently capitalized to weather an economic downturn, but midsize banks were among those with the lowest minimum capital levels.

Sen. Elizabeth Warren, D-Mass., said bank regulators have been shortsighted in allowing banks to merge and should be tougher when issuing M&A guidelines.

Vantage Bank of Texas will be allowed to add a new branch in Houston, but Fed Gov. Michelle Bowman said the episode highlights the need for new policies around assessing public commentary.

The watchdog claims that during internal testing, the company illegally processed $2.3 billion in mortgage payments.

The bank hasn't managed debt sales in Texas since a measure took effect in 2021 that bars governmental entities from working with companies that "discriminate" against firearms businesses. BofA's "current risk-based framework and policies" can comply with that law, a lawyer for the bank has told the state.

A report from the Treasury Department's Federal Insurance Office urges state regulators to spruce up their toolkits for monitoring and mitigating the impact of climate change on homeowners insurance.

The Federal Reserve gave itself the power to raise capital requirements when risks are elevated to ensure banks can lend through the business cycle. But the rule hasn't been used, and it isn't clear it could ever work in practice.

The European Cental Bank recently urged banks it supervises "to speed up their downsizing and exit strategies by adopting clear road maps" and regularly reporting on progress, according to Andrea Enria, who leads the ECB's supervisory board.

The heads of the Federal Reserve and Federal Deposit Insurance Corp. say upcoming capital proposals won't be implemented for years, but banks tend to move fast to get ahead of upcoming changes.

The instant-payments rail, which was set to go live this month, has postponed its launch indefinitely. Experts say it's having trouble keeping the interest of the country's major banks.

After holding at its last meeting, the Federal Open Market Committee may decide to raise rates again in July.

The legislation has support among Republicans, who hold a slim majority in the chamber.

New legislation from Rep. Sean Casten, D-Ill., would impose various requirements and consequences on large banks that don't have a chief risk officer. It follows the failure of Silicon Valley Bank, which left the job unfilled for eight months last year.

Nineteen Democratic lawmakers proposed a ban on buy now/pay later loans to finance semiautomatic weapons that would include levying hefty fines on companies that enable the transactions and dealers that accept them.