The Washington Wrap is a weekly recap of financial regulation, news and chatter from around the capital. Send tips and ideas to alison.bennett@spglobal.com and tim.weatherhead@spglobal.com.
On Capitol Hill
The Senate confirmed Federal Reserve Chairman Jerome Powell to a second four-year term and also confirmed the nominations of Lisa Cook and Philip Jefferson to seats on the Fed Board of Governors, The Wall Street Journal reported.
Powell's nomination was approved in an 80-19 vote on May 12, while those of Cook and Jefferson were approved with votes of 51-50 and 91-7, respectively, earlier this week.
Cook needed Vice President Kamala Harris' tie-breaking vote in order to get confirmed. Cook is currently a professor of economics and international relations at Michigan State University and a former economist on the staff of the Council of Economic Advisers during the Obama administration. She will be the first Black woman to sit on the Fed Board of Governors.
Jefferson became vice president for academic affairs and dean of faculty at Davidson College in 2019 and previously worked at the Fed.
President Joe Biden's second nominee for the role of Fed vice chair for supervision, Michael Barr, will have a nomination hearing before the Senate Banking Committee on May 19. Biden's first nominee for the post, Sarah Bloom Raskin, ultimately withdrew her name from consideration following the announcement by Sen. Joe Manchin, D-W.Va., that he would not support her nomination.
At the Treasury
Treasury Secretary Janet Yellen reiterated her call for Congress to regulate stablecoins following a significant decline this week in TerraUSD, The Wall Street Journal reported.
The fourth-largest stablecoin and 10th-largest cryptocurrency by market value, according to CoinMarketCap, saw its price hit 69 cents on Monday despite it being designed to remain fixed at $1.
"I think that simply illustrates that this is a rapidly growing product and that there are risks to financial stability," Yellen said May 10 at Senate Banking Committee hearing. "We really need a consistent federal framework."
At the Fed
The Dallas Fed appointed Lorie Logan president and CEO, effective Aug. 22.
Logan will replace Robert Kaplan, who retired from the Dallas Fed on Oct. 8, 2021. Meredith Black has been serving as the interim president and will retire Sept. 1.
Logan currently serves as manager of the System Open Market Account for the Federal Open Market Committee and as executive vice president of the New York Fed.
At the OCC
Acting Comptroller of the Currency Michael Hsu said in a speech May 9 at the Brookings Institution that the regulator may require large banks seeking merger approvals to make commitments to resolve potential bank failures.
Hsu said the objective of such a requirement would be to lessen the merger risks associated with too-big-to-fail institutions.
Several of the resolvability requirements for U.S. global systemically important banks could be tailored so that they apply to large regional banks, Hsu said. Some of those requirements would include those related to single-point-of-entry, total loss absorbing capital and separability, the acting comptroller said.
At the Consumer Financial Protection Bureau
In an advisory opinion, the Consumer Financial Protection Bureau said the Equal Credit Opportunity Act, or ECOA, prohibits lenders from discriminating against borrowers not just during the loan application process but after they have received the loan as well.
Specifically, the advisory opinion states that the ECOA prohibits lenders from lowering the credit limit of certain borrowers' accounts or subjecting certain borrowers to more aggressive collection practices on a prohibited basis, like race. The opinion also states that the ECOA requires lenders to provide adverse action notices to borrowers with existing credit that explain why an unfavorable decision was made against them.
