The past eight days included two developments 1 that should be of immediate interest to banks: the Senate’s passage of the 21 st Century Road to Housing Act, which includes community bank provisions, and a facially anodyne bulletin from the OCC about deficient applications. The latter could have a significant impact and change the ways that potential applicants prepare their applications.

Over the past two weeks, there have been two particularly notable events.  The first and of immediate importance to banks has been discussion of recent changes and planned changes to the frameworks for bank supervision and failed bank resolutions.  Of potentially longer-term relevance to the industry is the Administration’s effort in the past three days to limit access to Anthropic’s Fable 5 and Mythos 5 models.

The week of Memorial Day is usually a quiet one, and so it proved to be this year.  Possibly the most far-reaching development for any bank involved in artificial intelligence occurred not through the traditional bank regulatory channels but through the Vatican with the release of a papal encyclical on AI.

Over the course of last week (the week of May 18), the most noteworthy events were a proposal from the federal banking agencies for significant changes to the CAMELS rating system, a proposal from the Federal Reserve for payment accounts at Reserve Banks for nonbank institutions, and the passage of a version of the ROAD to Housing Act in the House of Representatives.

This past week the Federal Reserve was once again in the spotlight with the confirmation of Kevin Warsh as chairman and Jerome Powell’s continued service as chair in a pro tem capacity.  However, the events with the longest-term impact were on Capitol Hill: the Senate Banking Committee marked up the CLARITY Act, and the chairman of the House Financial Services Committee introduced a new version of the 21^st Century Road to Housing Act.

Formal government action last week was limited to the Senate Banking Committee’s decision to mark up on May 14 the bill to enact the CLARITY Act, the OCC’s approval of a de novo national trust bank, and the SEC’s proposal of a rule on semiannual (rather than quarterly) reporting.  But several non-formal events, including speeches and papers, warrant attention as they may foreshadow formal action on such matters as private credit, stablecoins, and tokenization.

Through the middle of the week, the most noteworthy developments involved the Fed: the April meeting of the FOMC and the Senate Banking Committee’s approval of the nomination of Kevin Warsh as Chairman.  On Friday, two other notable events occurred.  A compromise appears to have been reached on the yield language in the Clarity Act.  The CFPB also released its final rule on the collection of small business loan data.

Developments over the past week on the nomination of Kevin Warsh as chairman of the Federal Reserve received the most public attention and may have the longest lasting impact of any events over the last several days. Elsewhere, in final agency action, the banking agencies finalized revisions to the community bank leverage ratio, and the CFPB finalized substantive changes to Regulation B.

This past week, banking agencies took a break from formal regulatory proceedings, but they provided interesting instruction otherwise.  The agencies issued new guidance on model risk management, and two members of the Federal Open Market Committee gave unusually detailed and specific speeches on monetary policy.  At least one new issue also emerged: by the end of the week, cybersecurity and AI had taken center stage.

Perhaps the most noteworthy events of the past week occurred through the most traditional regulatory channel: notice-and-comment rulemaking.  Regulators proposed three related AML/CFT regulations.  In addition, the FDIC proposed a rule to implement the GENIUS Act, and it finalized its rule on reputation risk.  In all, last week’s developments ranged across some 15 subject matter areas.

The past week saw several important developments and events, notably: a proposed rule from the Labor Department that would facilitate 401(k) plan investments in alternative assets; another proposed rule from the Treasury Department on state regulation of payment stablecoin issuers; and a Treasury announcement of a coming series of meetings with state and international insurance regulators on private credit matters.

The past week has seen several developments of interest, perhaps most notably FSOC’s proposal to change the systemic risk designation process.

To a banking lawyer, the most significant event of the week may not have occurred in monetary policy but rather in regulatory capital. Last Thursday, the banking agencies released three long-awaited proposals. One other development that may have considerable importance at a different stage in the business cycle was the FDIC’s decision to rescind the 2009 Policy Statement on Qualifications for Failed Bank Acquisitions.

Most of this week’s important developments took the form of speeches, notably in remarks by FDIC Chairman Travis Hill on March 11 and remarks by the Federal Reserve’s Vice Chair for Supervision, Michelle Bowman, on March 12. In addition, housing legislation made its way through the Senate, but the Senate and the House must iron out some differences before a bill goes to the President.

During the past week, the federal regulators and Congress have addressed several important matters, including regulatory relief for community banks and improvements in housing affordability. As of now, the housing legislation should reach the President by the end of this coming week.

The past week saw several notable events, including the OCC’s release of a proposal to implement portions of the GENIUS Act and a Senate Banking Committee hearing at which senior officials described coming regulatory developments.

The past week saw action on several regulatory fronts. Perhaps the most sweeping were potential changes to the risk weights for mortgages and mortgage servicing rights as forecasted by the Federal Reserve’s Vice Chair for Supervision, Governor Michelle Bowman, on February 16.

Earlier today, March 21, the FDIC approved a notice of proposed rulemaking for a Statement of Policy on Bank Merger Transactions. The proposed policy would introduce several new considerations in the FDIC's review of merger applications. The attached Regulatory Note reviews some of the high points of today's action.

      Last week, on February 12, 2024, the FFIEC released a Statement on Examination Principles Related to Valuation Discrimination and Bias in Residential Lending. The Statement is aimed at under-valuations of homes in minority and low- and moderate-income communities. The attached Regulatory Note summarizes practical lessons for bank management that are part of the Statement.

On May 24, 2023, the House Financial Services Committee completed its markup of reform legislation relating to the failures of Silicon Valley Bank and Signature Bank and approved H.R. 3556, the “Increasing Financial Regulatory Accountability and Transparency Act.” The bill would make several changes to the existing regulatory framework for addressing risks to financial stability in the banking industry. Among other things, the bill limits some agency decision making and provides for enhanced Congressional oversight.