Legislative Activity

Financial Services Committee Continues to Focus on Housing

As mentioned previously, House Financial Services Committee Chairman Jeb Hensarling (R-TX) plans to make reforming the housing finance market a “huge priority” this Congress. After having already held a hearing with Federal Housing Finance Agency (FHFA) Director Mel Watt, this week the Committee will question Department of Housing and Urban Development Secretary Julián Castro about the health of the Federal Housing Administration’s (FHA) Mutual Mortgage Insurance Fund (MMIF). Republicans are particularly concerned that FHA’s MMIF – which is required to maintain a capital reserve ratio of at least 2 percent – has recently been reported to have a capital reserve ratio of 0.41 percent.

This Week’s Hearings:

  • Tuesday, February 10: The Senate Banking Committee will hold the first in a series of hearings titled “Regulatory Relief for Community Banks and Credit Unions.”
  • Wednesday, February 11: The House Financial Services Committee will hold a hearing titled “The Future of Housing in America: Oversight of the Federal Housing Administration.”
  • Thursday, February 12: The Senate Banking Committee will hold the second in a series of hearings titled “Regulatory Relief for Community Banks and Credit Unions.”

Regulatory Activity

FSOC Adopts Changes to SIFI Designation Process

The Financial Stability Oversight Council (FSOC) last week adopted certain changes relating to its process for reviewing nonbank financial companies for potential designation as systemically important financial institutions (SIFIs). According to Treasury Secretary Jack Lew, the changes “represent an important step…that will increase the transparency of our designations process and strengthen the Council overall.”  Specifically, the changes include: (1) engaging earlier with companies under review and providing them with an opportunity to engage with FSOC; (2) making more information available to the public regarding FSOC’s designation process; and (3) providing more opportunities for designated firms to engage with FSOC during its annual reevaluation process.

SEC to Hold Meeting of Investor Advisory Committee

On Thursday, February 12, the Securities and Exchange Commission (SEC) will hold a meeting of its Investor Advisory Committee. Among other agenda items, the Investor Advisory Committee will: (1) receive a recommendation from the Market Structure Subcommittee on shortening the trade settlement cycle; (2) discuss proxy access; and (3) provide an update on the Financial Industry Regulatory Authority (FINRA) rule proposal regarding implementation of the Comprehensive Automated Risk Data System (CARDS) and on the Municipal Securities Rulemaking Board (MSRB) and FINRA proposals for improved disclosures for same-day, retail-size principal transactions in fixed income securities.