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Daily Financial Regulation Update — Wednesday, November 22, 2023 | Paul Hastings LLP

Major Developments

U.S. Department of the Treasury
U.S. Department of Justice

Financial Crimes Enforcement Network

Office of Foreign Assets Control

U.S. Treasury Announces Largest Settlements in History with World’s Largest Virtual Currency Exchange Binance for Violations of U.S. Anti-Money Laundering and Sanctions Laws

November 21, 2023

The U.S. Department of the Treasury, through the Financial Crimes Enforcement Network (FinCEN), the Office of Foreign Assets Control (OFAC), and IRS Criminal Investigation (CI), has settled with Binance Holdings Ltd. and its affiliates (collectively, Binance) for violations of the U.S. anti-money laundering and sanctions laws. In addition, the Department of Justice entered into plea agreements with Finance and its CEO.

Commodity Futures Trading Commission

Binance and Its Agree to Pay $2.85 Billion for Willfully Evading U.S. Law, Illegally Operating a Digital Asset Derivatives Exchange, and Other Violations

November 21, 2023

The Commodity Futures Trading Commission (CFTC) today announced Changpeng Zhao, and his companies Binance Holdings Limited, Binance Holdings (IE) Limited, and Binance (Services) Holdings Limited (together, Binance) agreed to a proposed consent order for permanent injunction, civil monetary penalty, and equitable relief that, if entered by the U.S. District Court for the Northern District of Illinois, will resolve all charges the CFTC brought against Zhao and Binance for knowingly disregarding provisions of the Commodity Exchange Act (CEA) to profit from their operation of an illegal digital assets derivative exchange.

Binance Former Chief Compliance Officer, Agrees to Pay $1.5 Million for Willfully Evading U.S. Law, and Aiding and Abetting the Illegal Operation of a Digital Asset Derivatives Exchange, and Other Violations

November 21, 2023

The Commodity Futures Trading Commission announced former Binance Chief Compliance Officer,agreed to a proposed consent order for permanent injunction, civil monetary penalty, and equitable relief to resolve all charges the CFTC brought against Lim for violating the Commodity Exchange Act (CEA) and willfully aiding and abetting Binance’s numerous violations of the CEA.

Congress

Federal Agencies

Federal Reserve Board

Minutes of the Federal Open Market Committee, October 31-November 1, 2023

November 21, 2023

The Federal Reserve released the minutes of the Federal Open Market Committee meeting that was held on October 31–November 1, 2023.

Paper: Borrowing and Spending in the Money: Debt Substitution and the Cash-out Refinance Channel of Monetary Policy

November 21, 2023

The Federal Reserve Board published a working paper entitled, “Borrowing and Spending in the Money: Debt Substitution and the Cash-out Refinance Channel of Monetary Policy.”

Federal Reserve Bank of New York

New York Fed Community Development Team Releases Brief Finding Americans Had $232 billion in Unsecured Personal Loans in Q2 2023

November 21, 2023

The Federal Reserve Bank of New York’s Community Development team published a research brief entitled, “The Role of Fintech in Unsecured Consumer Lending to Low- and Moderate-Income Individuals, ” which finds 22.7 million American borrowers had an outstanding unsecured personal loan at the end of Q2 2023, with loans from fintech firms a significant driver of new unsecured loans.

Blog: A Bayesian VAR Model Perspective on the Lagged Effect of Monetary Policy

November 21, 2023

The Federal Reserve Bank of New York published a Liberty Street Economics blog post entitled, “A Bayesian VAR Model Perspective on the Lagged Effect of Monetary Policy.”

Blog: The New York Fed DSGE Model Perspective on the Lagged Effect of Monetary Policy

November 21, 2023

The Federal Reserve Bank of New York published a Liberty Street Economics blog post entitled, “The New York Fed DSGE Model Perspective on the Lagged Effect of Monetary Policy.”

Federal Reserve Bank of Boston

Boston Fed’s 67th Economic Research Conference analyzes barriers to ‘full employment’

November 21, 2023

The Federal Reserve Bank of Boston’s 67th Economic Conference, “Rethinking Full Employment,” was held November 17-18, 2023.

Federal Deposit Insurance Corporation

FDIC Board of Directors Establishes Special Committee to Oversee Independent Review of Agency Culture

November 21, 2023

The Federal Deposit Insurance Corporation Board of Directors announced the establishment of a special committee of the Board to oversee an independent third–party review of the agency’s workplace culture.

Commodity Futures Trading Commission

Blog: Piloting Disclosures for Construction Loans

November 21, 2023

The Commodity Futures Trading Commission published a blog post entitled, “Piloting Disclosures for Construction Loans.”

Financial Crimes Enforcement Network
Office of Foreign Assets Control

FinCEN Exchange Brings Together Public and Private Sectors to Discuss Attempts by Russia to Evade Export Controls

November 21, 2023

On November 16, the Department of the Treasury’s Financial Crimes Enforcement Network and Office of Foreign Assets Control, along with the Department of Commerce’s Bureau of Industry and Security (BIS), co-hosted a virtual FinCEN Exchange to discuss attempts by Russia to evade export controls. The exchange included representatives from small- to mid-size financial institutions, law enforcement, and government agencies.

Federal Housing Finance Agency

FHFA Announces Final Rule Modifying Certain Provisions of the Enterprise Regulatory Capital Framework

November 21, 2023

The Federal Housing Finance Agency published a final rule that amends several provisions of the Enterprise Regulatory Capital Framework for Fannie Mae and Freddie Mac.

Fannie Mae

Commentary: Economy Expected to Slow in 2024, Rebound in 2025

November 21, 2023

The Fannie Mae Economic Strategic Research Group released its November 2023 commentary.

Freddie Mac

Freddie Mac Issues Monthly Volume Summary for October 2023

November 21, 2023

Freddie Mac posted its Monthly Volume Summary for October 2023, which provides information on Freddie Mac’s mortgage-related portfolios, securities issuance, risk management, delinquencies, debt activities and other investments.

International

European Commission

Commission sets out key priorities in the European Semester for the year ahead to strengthen EU competitiveness

November 21, 2023

The European Commission has launched the 2024 European Semester cycle of economic policy coordination.

European Banking Authority

The EBA publishes final standards for Supervisors assessing new market risk internal models

November 21, 2023

The European Banking Authority published its final draft Regulatory Technical Standards on the assessment methodology under which competent authorities verify institutions’ compliance with the requirements applicable to their internal models under the Fundamental Review of the Trading Book rules.

Bank of England

Treasury Select Committee Hearing on the November Monetary Policy Report

November 21, 2023

The Bank of England Treasury Select Committee held a hearing on the November Monetary Policy Report. Witnesses included: Andrew Bailey, Dave Ramsden, Jonathan Haskel and Catherine L Mann.

UK Financial Conduct Authority

Consultation Paper: Regulatory fees and levies: policy proposals for 2024/25

November 21, 2023

The Financial Conduct Authority published a consultation paper entitled, “Regulatory fees and levies: policy proposals for 2024/25.”

Administration Changes

Vacancies

Office of the Comptroller of the Currency

  • Comptroller – Vacant (Michael Hsu serves as Acting Comptroller)

Appointments/Confirmation Hearings

U.S. Department of the Treasury – Janet Yellen (effective January 26, 2021)

Federal Reserve Board – Jerome H. Powell (effective May 23, 2022)

  • Vice Chair Phillip N Jefferson (sworn in September 13, 2023)
  • Vice Chair for Supervision Michael Barr (sworn in July 19, 2022)
  • Governor Michelle W. Bowman (sworn in November 26, 2018)
  • Governor Christopher J. Waller (sworn in December 18, 2020)
  • Governor Lisa D. Cook (sworn in September 13, 2022)
  • Governor Adriana D. Kugler (sworn in September 13, 2023)

Federal Reserve Bank of New York – John C. Williams (effective June 18, 2018)

Federal Reserve Bank of Boston – Susan M. Collins (effective July 1, 2022)

Federal Deposit Insurance Corporation – Martin Gruenberg (effective January 5, 2023)

  • Vice Chairman Travis Hill (sworn in January 5, 2023)
  • Director Jonathan McKernan (sworn in January 5, 2023)
  • Director Michael Hsu (Acting Comptroller of the Currency)
  • Director Rohit Chopra (Director of Consumer Financial Protection Bureau)

Office of the Comptroller of the Currency – Michael Hsu (acting Comptroller, effective May 10, 2021)

Securities and Exchange Commission – Gary Gensler (effective April 17, 2021)

Commodity Futures Trading Commission – Rostin Behnam (effective December 17, 2021)

Consumer Financial Protection Bureau – Rohit Chopra (effective October 12, 2021)

National Credit Union Administration – Todd M. Harper (effective January 20, 2021)

Small Business Administration – Isabella Casillas Guzman (effective March 16, 2021)

U.S. Department of Housing and Urban Development – Marcia Fudge (effective March 10, 2021)

Federal Housing Finance Agency – Sandra L. Thompson (effective June 22, 2022)

U.S. Department of Education – Dr. Miguel Cardona (effective March 2, 2021)

Financial Crimes Enforcement Network – Andrea Gacki (effective July 13, 2023)

PH Client Alerts

Click here to read more from our Coronavirus series.

Legislation/Legislative Updates

Click here to view the full text of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), Enacted March 27, 2020.

Click here to view the full text of the Paycheck Protection Program Increase Act of 2020, Enacted April 24, 2020.

Click here to view the full text of the Paycheck Protection Program Flexibility Act of 2020, Enacted June 5, 2020.

Click here to view the full text of the Consolidated Appropriations Act, 2021, Enacted December 27, 2020.

Click here to view the full text of the American Rescue Plan of 2021, Enacted March 11, 2021.

Click here to view the full text of the PPP Extension Act of 2021, Enacted March 30, 2021.

Click here to view a running list of proposed legislation from the Senate Committee on Banking, Housing, and Urban Affairs, Senate Committee on Small Business and Entrepreneurship, House Committee on Financial Services, and House Committee on Small Business.

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