Cabinet News & Views

In This Issue ...

As the banking industry continues its efforts to return to business as usual following a hectic and complicated three weeks, we are now seeing the early stages of the process to determine what went wrong, who was responsible and what can be done in the future to prevent a recurrence.

That closer look began earlier this week with Congressional hearings involving some of the nation's top banking regulators, and it is pretty obvious that this is only the beginning of an industry-wide introspection period. This should be very enlightening, and it is something that we will follow carefully in the weeks and months to come.

We also continue to follow the ongoing judicial matters around CFPB funding, with another important development last week addressed here by my colleague, Rachel Rodman.

Lots more to read and discuss this week, so please reach out here if there’s anything on your mind.

Daniel Meade
Partner and Editor, Cabinet News and Views

Congressional Hearings Calling Federal Regulators to Task for Recent Bank Failures

By Daniel Meade

Partner | Financial Regulation

Both the Senate Banking Committee and House Financial Services Committee held hearings this week on the federal regulatory response to the failures of Silicon Valley Bank and Signature Bank. Witnesses at both hearings were Federal Reserve Board Vice Chair of Supervision Michael Barr, Federal Deposit Insurance Corporation Chairman Martin Gruenberg, and Treasury Department Under Secretary for Domestic Finance Nellie Liang.

By Rachel Rodman

Partner | Consumer Financial Services Enforcement and Litigation

On March 23, the U.S. Court of Appeals for the Second Circuit ruled that the CFPB’s funding mechanism is constitutional. The case, CFPB v. Law Offices of Crystal Moroney, is significant for two reasons. First, the Second Circuit expressly declined to follow the Fifth Circuit’s recent ruling in CFPB v. Community Financial Services Association of America that the CFPB’s funding mechanism violates the Appropriations Clause of Article I of the Constitution. Second, the Second Circuit issued its ruling after the Supreme Court granted certiorari in Community Financial − weighing in on a controversial issue that the Supreme Court has already agreed to address.

By Mercedes Kelley Tunstall

Partner | Financial Regulation

Earlier this month, the CFPB issued a press release and a Request for Information that is focused upon whether the CFPB should promulgate additional rules implementing the Fair Credit Reporting Act.

By Duncan Hubbard

Partner | Real Estate

On 30 September 2022, the Prudential Regulation Authority published Consultation Paper 16/22 proposing for the implementation of Basel 3.1 standards in the UK. The consultation closes on 31 March 2023, with the proposed implementation date beginning 1 January 2025 (with a transition period of five years from that date for most provisions). This article sets out a summary of the key changes of interest to those in the real estate finance market.

By Sukhvir Basran

Partner | Financial Services

By Rachel Rodman

Partner | Consumer Financial Services Enforcement and Litigation

On March 22, the European Commission unveiled a proposal, the Green Claims Directive, aimed at combating greenwashing and misleading environmental claims.