Regulatory reform

Senior congressional Democrats are concerned that the Financial Crimes Enforcement Network — an arm of the Treasury Department — is dragging its feet on a rulemaking to require corporations to report their beneficial owners.

Cornell University law professor Saule Omarova could be nominated as early as this week to lead the Office of the Comptroller of the Currency, according to sources. Her appointment would be a shot across the bow for Wall Street as she’s expected to pursue tougher oversight and stricter rules.

The agency organized a vehicle seeded with $120 million from anchor investors — including Truist and Microsoft — enabling minority-owned banks and community development financial institutions to seek capital for development projects in underserved areas.

Changes made in the waning days of the previous administration limited the government-sponsored enterprises’ purchases of certain loan types, which drew criticism from lenders and community groups alike.

Some progressive lawmakers argue the Federal Reserve’s deregulatory moves under Jerome Powell should disqualify him for a second term as chair. But the Biden administration could let him keep his job because of monetary policies that helped low-income workers.

The Federal Deposit Insurance Corp. is soliciting feedback on banks' experiences with remote exams during the pandemic. Some welcome the review as a step toward a more modern examination system, while others contend the last year and a half exposed the drawbacks of long-distance oversight.

This year's assessment for Fannie Mae and Freddie Mac is the first to take into account a January agreement between the Federal Housing Finance Agency and the Treasury Department that allowed the companies to retain more earnings.

Banks are traditionally the target of anti-money-laundering regulations and law enforcement’s efforts to crack down on illicit finance. As the cryptocurrency sector grows, policymakers may subject it to customer identification requirements and other measures, analysts say.

The Office of the Comptroller of the Currency’s pledge to rescind Trump-era Community Reinvestment Act reforms and work with other regulators suggests that an interagency agreement is within reach. But outstanding issues remain, particularly around the treatment of online banking activities.

The guarantor has for the first time proposed a risk-based capital requirement for companies not subject to other federal regulation. The industry says the plan, which would impose a heavy charge for servicing portfolios, could drive lenders away from government-backed programs.

The Office of the Comptroller of the Currency confirmed it will rescind an unpopular rule overhauling the Community Reinvestment Act and joined other agencies in calling for a renewed interagency effort.

The White House's firing of Federal Housing Finance Agency Director Mark Calabria sparked immediate speculation about who will run the agency and help chart the future of the two mortgage giants. Potential nominees include ex-Obama administration officials, congressional staffers and members of the Biden transition team.

The chief operating officer now oversees numerous divisions at the Office of the Comptroller of the Currency. But as part of a reorganization, the COO’s position is being eliminated and several units will come under the direct authority of the comptroller.

The Community Home Lenders Association has called for suspension of federal limits on the loan volumes that Fannie Mae and Freddie Mac can purchase from individual lenders. The demand came on the same day that the Biden administration fired FHFA Director Mark Calabria and started the process of nominating his successor.

The appointments of former senior leaders from a rival regulator could force the Office of the Comptroller of the Currency to embrace interagency cooperation after taking a go-it-alone approach during the Trump administration, some observers say. Others worry about another extreme: the Federal Reserve having outsize influence over financial policy.

For two decades, Alfred Pollard served as the general counsel for Fannie Mae and Freddie Mac’s regulator. He had a front-row seat for the establishment of the Federal Housing Finance Agency, the government’s subsequent seizure of the mortgage giants amid mounting losses in 2008 and the more recent legal dispute over the FHFA’s authority.

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.

The agency said it will reconsider the controversial regulation to reform the Community Reinvestment Act, and allow banks to halt efforts to comply with key provisions of the framework.

Financial institutions said they needed more time to weigh in on issues such as how they use artificial intelligence for fraud prevention and underwriting.

Acting Comptroller of the Currency Michael Hsu said he plans to prioritize "solving urgent problems and addressing pressing issues" until the Biden administration selects a permanent head of the agency.