The Washington Wrap is a weekly recap of financial regulation, news and chatter from around the capital. Send tips and ideas to polo.rocha@spglobal.com, david.hood@spglobal.com and declan.harty@spglobal.com.
At the Fed
The Federal Reserve Board will meet Oct. 10 to finalize a proposed overhaul of regulations for large domestic banks and foreign-owned banks.
The package splits up banks into categories depending on how risky the Fed deems them, with smaller and less-complex banks facing less-stringent regulations. The Fed will also consider a final rule on a plan to reduce "living wills" requirements for large banks and eliminate those filings for some U.S. regional banks.
Fed officials have said the changes will make financial regulation more efficient while keeping the strictest standards in place for the largest firms. But Fed Governor Lael Brainard, an Obama administration appointee, has dissented on the proposals and warned they would make the financial system more vulnerable to shocks.
The Fed's meeting advisory also says officials will discuss a proposal to modify the fees it will charge large banks under the new regulatory framework.
At the regulators
The Federal Housing Finance Agency proposed a rule that would allow mortgage-buyers Fannie Mae and Freddie Mac to retain more capital than what is currently allowed.
The government-sponsored enterprises will be allowed to keep $25 billion and $20 billion of earnings in the new rule, respectively, up from $3 billion each. Under conservatorship, the companies are required to pass on any money earned above the $3 billion threshold to the Department of Treasury.
The proposed rule is the next step in the White House's plan to release the GSEs from government control and administratively reform the U.S. housing finance system.
At the Consumer Financial Protection Bureau, several new members were named to four advisory committees.
Filling the positions fulfills a promise by Director Kathleen Kraninger to restart engagement by the bureau with the committees.
The agency named 12 members to its Consumer Advisory Board, eight to its Community Bank Advisory Council, eight to the Credit Union Advisory Council and seven to the Academic Research Council.
At the SEC
The SEC issued a proposal Oct. 1 that outlined a new procedure around fee changes for national market system plans. Under these plans, U.S. exchanges are normally directed by the SEC to govern or manage a particular market-wide procedure. Among those plans are the securities information processors, or SIPs, which are consolidated data feeds that use information from both equity and option exchanges in the U.S. to provide users with a more comprehensive view of marketwide activity.
Today, if the exchanges wanted to increase or decrease the fees behind the SIPs, they could issue a filing that would make that change effective immediately. The SEC's proposal would require those entities to follow a more traditional fee-filing avenue that includes a public comment period and would require the SEC's sign-off before implementation.
In Congress
House Financial Services Committee Chair Maxine Waters, D-Calif., scheduled hearings for the month of October.
The upcoming hearing schedule includes two days dedicated to bill markups, testimony from CFPB Director Kraninger and discussions on terrorism risk insurance and stock buybacks.
Congress returns from its two-week recess Oct. 15.

