This Week: The House passed legislation reinstating a Federal Communications Commission "net neutrality" rule imposed and then rescinded over the last three years (see below). The Senateconfirmed a group of Trump administration nominees.
Next Week: Both the House and Senate will be out of session until April 29.
BSA/AML Reform. The House Financial Services Committee (HFSC) has been working on legislation to modernize the existing Bank Secrecy Act (BSA) regulatory regime for combatting money laundering. One bill would update existing requirements to, among other things, promote greater application of new technologies toward BSA/AML compliance and greater cooperation between banks and law enforcement. Another would try to fill a gap in the current system by requiring business entities to provide details on their beneficial ownership to a new federal registry. The beneficial ownership proposal, which is supported by the banking industry but has been criticized at times on privacy and other grounds, continues to be refined. The HFSC held a hearing on these bills last month (the topic also surfaced at this week’s hearing with the CEOs of large US banks) and will approve them as soon as the end of this month. The Senate is separately working on its version of BSA/AML reform. While it still has a long way to go and faces a more uncertain future in the Senate, BSA/AML reform has the potential to be a significant bipartisan achievement for this Congress in the financial services arena.
Big Bank Hearing. The long-awaited hearing featuring seven large bank CEOs before the House Financial Services Committee occurred this week. New HFSC Chairwoman Maxine Waters (D-CA) has for a long time been eager to have the CEOs appear before the committee so they can account for their business activities, operational risks and regulatory compliance. Some committee members were interested in probing more delicate areas, such as CEO compensation, the pay gap between junior and senior executives and business with politically-disfavored industries (weapons, tobacco, carbon-based energy, etc.). While informative in many ways, the hearing lacked the "gotcha" moment that many expected and was tamer than the one a month ago with the departed Wells Fargo CEO. A key takeaway is that Chairwoman Waters said she will ask the CEO panel to return next year, which suggests ongoing oversight of big banks for as long as she holds the gavel.