Crypto, ARC, data sharing: the ambitious priorities of banking regulators for 2022

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Federal financial regulators are preparing to radically reshape several major banking rules and create new ones, filling the policy vacuum left by a bitterly divided Congress.

Absent congressional action, they are moving rapidly on a number of fronts, from providing guidance on digital currencies to tougher scrutiny of bank mergers to modernizing the Community Reinvestment Act. In some cases, regulators are seizing the opportunity to realize the Biden administration’s liberal agenda, even in the face of massive industry setbacks.

Major financial regulatory agencies have, or will soon have, new Democratic candidates eager to make their mark. Once Trump administration-appointed Federal Deposit Insurance Corp. president Jelena McWilliams steps down in February, Democrats will have full control of the agency’s board. The new director of the Consumer Financial Protection Bureau and the acting Comptroller of the Currency are also Democrats. Meanwhile, President Biden recently announced three nominations to fill the rest of the Federal Reserve Board.

One of the most high-profile efforts is the Fed’s exploration of the feasibility of a central bank digital currency. When it comes to mergers and acquisitions, some regulators want a deeper consideration of community impact and systemic risk when considering applications for larger deals — the very threat of which could have an effect. dissuasive on combinations involving large regional banks. Additionally, regulators are moving forward to update CRA rules in light of the rise of digital banking, establish rules around climate change risk, and give consumers greater control over their personal financial data.

Here’s a look at the issues regulators are looking to address this year.

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