Congress asked the Fed chief about marijuana banking: ‘It would be nice to have clarity’

From: CNBC

  • Asked about the Fed’s thoughts on the cannabis space, Chair Jerome Powell says further regulatory guidance would be helpful.
  • “I think it would be great to have clarity,” Powell says. “It puts financial institutions in a very difficult place and puts the supervisors in a difficult place, too.”
  • Marijuana remains illegal on a federal level in the United States, but 10 states and the District of Columbia have allowed its use for recreational purposes.

Federal Reserve Chairman Jerome Powell said before the U.S. Senate Tuesday that conflicting federal and state laws on the sale of marijuana and other cannabis products put bank supervisors in a “very difficult place.”

Consumer Bankers Association weighs in on small-dollar lending

From: Financial Regulation News

By Douglas Clark

The Consumer Bankers Association (CBA) maintains actions by federal regulators unfavorably impact small-dollar lending consumers by forcing them to payday lenders and other less regulated sources when in need.

CBA officials said the input stems from the Federal Deposit Insurance Corporation’s (FDIC) request for information on its 2013 small-dollar guidance.

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Financial Stability Oversight Council Flags Brexit, Federal Government Debt as Potential Financial Stability Risks

From: ABA Banking Journal

Risks to the U.S. financial system remain moderate, though factors outside the U.S. — including Brexit — could potentially threaten financial stability in the months ahead, the Financial Stability Oversight Council said today in its annual report. The council also noted that an increasing federal government debt burden could negatively affect financial stability in the long-term.

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Banking needs a regtech sandbox

Editor’s Note: Cross-posted from Regulatory Cybersecurity/FISMA Focus.

From: American Banker | BankThink

By Jo Ann Barefoot

One of the best-known inventions in banking oversight in recent years is the “regulatory sandbox.” Pioneered by the U.K.’s Financial Conduct Authority, these are running now in about two dozen countries and several U.S.states, allowing fintech innovators to conduct live, small-scale testing under the regulator’s supervision.

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Fed Prepares New Way to Tailor Rules for Big Banks

From: Wall Street Journal

Regulator is considering dividing banks into categories based on risk factors, including international activity and off-balance-sheet exposures

By Ryan Tracy

WASHINGTON—The Federal Reserve is set to propose a new way of deciding which large banks get hit with its toughest regulations, according to people familiar with the matter.

The expected plan may lower regulatory costs for regional U.S. lenders under the $700 billion asset line, from Discover Financial Services Inc. at around $100 billion in assets to U.S. Bancorp with its roughly $460 billion. The changes under consideration appear to be less beneficial to the very largest U.S. banks considered “systemically important” to the global financial system, such as Bank of America Corp. or Citigroup Inc.