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 finalized a major overhaul of regulations for large banks on Oct. 10, tweaking many firms' capital and liquidity rules along with "living wills" requirements.
While the final rules preserve the most stringent regulations for the biggest U.S. banks, they loosen requirements for domestic regional banks and some foreign banks with U.S. operations.
The rules establish a new regulatory framework for banks with more than $100 billion in assets, splitting banks into four categories with increasingly tougher rules depending on how large and complex the firms are.
In the top tier, the eight U.S.-based global systemically important banks would see few changes in how they are regulated. The second tier of banks, which only includes Northern Trust Corp. among domestic institutions, would also see few changes to regulations.
But the third category of banks, which includes Capital One Financial Corp., would see cuts to current liquidity standards. Those banks would now need to meet 85% of their current liquidity coverage ratios. The Fed had earlier proposed setting the liquidity coverage ratios for firms in that category in a range of 70% to 85%.
Some of the new rules require two other banking regulators to sign off. The Federal Deposit Insurance Corp. will consider those rules at an FDIC board meeting on Oct. 15.
The Fed's overhaul was prompted by Congress' approval of a bipartisan package tweaking several elements of the Dodd-Frank Act.
Sen. Mike Crapo, R-Idaho and chairman of the Senate Banking Committee, said in a statement that he applauded the Fed for "striking a more appropriate balance between preserving safety and soundness and tailoring regulations in a way that reflects a bank's risk profile."
In Congress
Congress returns from its two-day recess Oct. 15 to a full plate of hearings.
Consumer Financial Protection Bureau Director Kathleen Kraninger is scheduled to testify before the House Financial Services Committee and the Senate Banking Committee, where she will provide a semiannual progress report on the agency to Congress.
On Friday, Rep. Ayanna Pressley, D-Mass., introduced a bill that would prohibit the CFPB from issuing any rule that allows debt collectors to send an unlimited number of emails or text messages to debtors. Her bill would also require the agency to produce a quarterly report to Congress detailing debt-collection-related complaints and any enforcement actions taken against debt collectors in the previous 12 months.
In May, the agency proposed a rule that would cap how often collectors could solicit debt-owing consumers per week and what communication methods and tactics would be allowed.
The House Financial Services Committee is also scheduled to begin work reauthorizing the Terrorism Risk Insurance Act, a program that provides a federal backstop for insurance companies offering terrorism-risk coverage. The program expires in 2020, but lawmakers in the Senate have already started considering updates to the law.
The SEC has established a new advisory committee consisting of asset management executives, academics and others to collect industry input on how the regulators' rules are impacting money managers.
Led by Edward Bernard, a senior adviser at T. Rowe Price Group Inc., the 23-person committee will explore everything from the effects of globalization to the changing role of technology in the asset management business, according to the SEC. The committee will be formally established Nov. 1 for a renewable two-year term.
Among the other committee members are Mike Durbin, president at Fidelity Institutional; Paul Greff, chief investment officer of the Ohio Public Employees Retirement System; Neesha Hathi, executive vice president and chief digital officer at Charles Schwab Corp.; John Suydam, chief legal officer at Apollo Global Management Inc.; and Susan McGee, a director at Goldman Sachs BDC Inc.

