The FinReg Pod

Justin Sherman is the founder and CEO of Global Cyber Strategies, a nonresident senior fellow at the Atlantic Council, and an adjunct professor and senior fellow at Duke University’s Sanford School of Public Policy, where he founded and leads its data brokerage research project. He joins Lee to discuss how data brokers obtain and use sensitive data, the role they play in financial services, and the current regulatory landscape attempting to address these practices.

Lee’s X: @leereiners

Justin’s X: @jshermcyber

Related Links:

CFPB Launches Inquiry Into the Business Practices of Data Brokers | Consumer Financial Protection Bureau (consumerfinance.gov)

Prepared Opening Remarks of CFPB Director Rohit Chopra at the Aspen Institute on Abuse and Misuse of Our Personal Data | Consumer Financial Protection Bureau (consumerfinance.gov)

CFPB Takes Action to Curb Unchecked Worker Surveillance | Consumer Financial Protection Bureau (consumerfinance.gov)

How to surveil a federal regulator - POLITICO

Fed, intel and military groups warn data broker practices may threaten national security - Nextgov/FCW

Microsoft Word - Duke Team Response to CFPB RFI on Data Brokers.docx

Data Brokers and the Sale of Data on U.S. Military Personnel - Tech Policy @ Sanford | Tech Policy @ Sanford (duke.edu)

The U.S. Needs Controls on Data Brokerage | TechPolicy.Press

Examining data broker Equifax’s relationships with millions of employers - Tech Policy @ Sanford | Tech Policy @ Sanford (duke.edu)

Dan Berkovitz and Laurian Cristea discuss the regulatory and ethical challenges surrounding political event contracts. They explore the history, recent legal developments, and the future implications of betting on political outcomes, especially as the CFTC tightens its stance on these controversial markets.

Lee’s X: @leereiners

Related Links:

CFTC proposed amendments to its rules concerning event contracts in certain excluded commodities: https://www.federalregister.gov/documents/2024/07/05/2024-14610/event-contracts

Elections Bets Go Live on Kalshi After CFTC's Court Loss: https://news.bloomberglaw.com/securities-law/betting-on-us-congress-elections-outcome-green-lit-by-judge

US appeals court clears Kalshi to restart elections betting: https://www.reuters.com/legal/us-federal-court-upholds-ruling-letting-kalshiex-list-election-betting-contracts-2024-10-02/

Statement of Chairman Rostin Behnam Regarding CFTC Order to Prohibit Kalshi Political Control Derivatives Contracts: https://www.cftc.gov/PressRoom/SpeechesTestimony/behnamstatement092223

A Mystery $30 Million Wave of Pro-Trump Bets Has Moved a Popular Prediction Market: https://www.wsj.com/finance/betting-election-pro-trump-ad74aa71

Ed DeMarco is president of the Housing Policy Council and former acting director of the Federal Housing Finance Agency. He discusses the rise of nonbank mortgage companies and what the Financial Stability Oversight Council’s recent report on nonbank mortgage servicing gets right and what it gets wrong. Ed also offers his thoughts on the FHFA’s Title Insurance Waiver Pilot Program, Freddie Mac's proposal to purchase second mortgages, and the CFPB’s inquiry into junk fees in mortgage closing costs. Finally, DeMarco shares his views on Kamala Harris’ housing policy proposals and their potential impact on the housing market.

Lee’s X: @leereiners

Related Links:

FSOC Report on Nonbank Mortgage Servicing: https://home.treasury.gov/news/press-releases/jy2331

Director Sandra Thompson's Statement on Title Acceptance Pilot: https://www.fhfa.gov/news/statement/director-sandra-thompsons-statement-on-title-acceptance-pilot

FHFA Announces Conditional Approval of Freddie Mac Pilot to Purchase Second Mortgages: https://www.fhfa.gov/news/news-release/fhfa-announces-conditional-approval-of-freddie-mac-pilot-to-purchase-second-mortgages

CFPB Launches Inquiry into Junk Fees in Mortgage Closing Costs: https://www.consumerfinance.gov/about-us/newsroom/cfpb-launches-inquiry-into-junk-fees-in-mortgage-closing-costs/

Housing Finance Quick Takes video series: https://www.housingpolicycouncil.org/hfqt

Graham Steele is the former Assistant Secretary for Financial Institutions at the U.S. Department of the Treasury. He discusses insights from his latest paper for the Roosevelt Institute, "The End of Banking History? Finishing the Unfinished Business of Financial Reform." From the impact of the 2018 deregulatory “tailoring” project, which weakened post-crisis reforms, to the cascading failures of regional banks like Silicon Valley Bank and Signature Bank in 2023, Graham laid out his view on why the current regulatory framework is falling short and what needs to change.

Graham’s X: @steelewheelz

Lee’s X: @leereiners

Related Links:

The End of Banking History? Finishing the Unfinished Business of Financial Reform: https://rooseveltinstitute.org/publications/the-end-of-banking-history/

Remarks by Assistant Secretary for Financial Institutions Graham Steele at the George Washington University Law School Business & Finance Law Program: https://home.treasury.gov/news/press-releases/jy2029

Kathryn Judge is a professor at Columbia Law School and Aaron Klein is a Senior Fellow at the Brookings Institution. They discuss the origins of the Federal Home Loan Banks, the role they played in propping up failing banks in the 2023 regional banking crisis, and their ideas for how the FHLBs can be reformed to better fulfill their public mission to promote housing and community development.

Kate Judge’s X: @ProfKateJudge

Aaron Klein’s X: @Aarondklein

Lee’s X: @leereiners

Related Links:

Comment Letter on FHLB Mission Statemen, Kathryn Judge and Aaron Klein: https://www.brookings.edu/wp-content/uploads/2024/07/Klein-Judge-FHLB-mission-statement-comment-FINALpdf.pdf

Forum on the future of the Federal Home Loan Bank system: Highlights from the Brookings and BU Law event, Aaron Klein, Cornelius Hurley, and Harrison Fregeau: https://www.brookings.edu/articles/forum-on-the-future-of-the-federal-home-loan-bank-system-highlights-from-the-brookings-and-bu-law-event/

How to fix the Federal Home Loan Banks, Kathryn Judge and Aaron Klein: https://www.brookings.edu/articles/how-to-fix-federal-home-loan-banks/

FHLBank System at 100: Focusing on the Future, Federal Housing Finance Agency: https://www.fhfa.gov/sites/default/files/2024-01/FHLBank-System-at-100-Report.pdf

John Coates is the John F. Cogan, Jr. Professor of Law and Economics at Harvard Law School and author of “The Problem of Twelve: When a Few Financial Institutions Control Everything.” According to John, a problem of twelve arises when a small number of institutions acquire the means to exert outsized influence over the politics and economy of a nation. In this episode, John discusses insights from his book and how the concentration of corporate power in the hands of a small group of institutional investors, specifically index funds and private equity funds, undermines our democracy.

Lee’s X: @leereiners

Lee’s Website: www.leereiners.com

Related Links:

The Problem of Twelve: When a Few Financial Institutions Control Everything: https://www.amazon.com/Problem-Twelve-Financial-Institutions-Everything/dp/B0BW67PX7B

Art Wilmarth, Professor Emeritus of Law at the George Washington University Law School, reflects on the regional banking crisis of spring 2023 and how decisions made by regulators to resolve Silicon Valley Bank, Signature Bank, First Republic Bank, and Credit Suisse reveal that we have still not solved the Too Big to Fail problem.

Lee’s X: @leereiners

Lee’s Website: www.leereiners.com

Related Links:

The FDIC’s resolution plan for failed megabanks is an empty promise: https://www.americanbanker.com/opinion/the-fdics-resolution-plan-for-failed-megabanks-is-an-empty-promise

Regulators should reject big-bank arguments against stronger capital requirements: https://thehill.com/opinion/4715182-regulators-should-reject-big-bank-arguments-against-stronger-capital-requirements/

We Need a New Glass-Steagall Act to End the Toxic Symbiosis Between Universal Banks and Shadow Banks, Which Professor Corrigan Has More Fully Revealed: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4794680

Statement by Martin J. Gruenberg, Chairman, Federal Deposit Insurance Corporation on Title 1 Resolution Plan Feedback Letters for 8 U.S. GSIBs: https://www.fdic.gov/news/speeches/statement-martin-j-gruenberg-chairman-federal-deposit-insurance-corporation-title-1

Martin J. Gruenberg, Chairman, FDIC Lessons Learned from the U.S. Regional Bank Failures of 2023 Florence School of Banking and Finance: https://www.fdic.gov/news/speeches/martin-j-gruenberg-chairman-fdic-lessons-learned-us-regional-bank-failures-2023

US regulator criticises Swiss handling of Credit Suisse as ‘unhelpful’: https://www.ft.com/content/9fb79310-b8e4-47d8-99cf-a7630eae59e7

FDIC Board of Directors Approves Final Revised Rule to Strengthen Resolution Planning for Large Banks: https://www.fdic.gov/news/press-releases/fdic-board-directors-approves-final-revised-rule-strengthen-resolution-planning

Overview of Resolution Under Title II of the Dodd-Frank Act: https://www.fdic.gov/sites/default/files/2024-04/spapr1024b_0.pdf

Eric Spitler, former Director of the Office of Legislative Affairs at the FDIC, discusses his paper on the history of bank runs and how he would reform deposit insurance to address the weaknesses revealed by last spring’s regional banking crisis.

Lee’s X: @leereiners

Related Links:

Yelling 'Fire' in the Financial Theater: Bank Runs in the Social Media Age and the Threat to Financial Stability: https://scholarship.law.unc.edu/ncbi/vol28/iss1/5/

The Deposit Insurance Funds as an Early Resolution Tool: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4897571

Danny Cullenward is a distinguished Senior Fellow with the Kleinman Center for Energy Policy at the University of Pennsylvania. He joined Lee to discuss the current state of voluntary carbon credit markets and efforts in the U.S. and abroad to regulate carbon credits.

Lee’s X: @leereiners

Related Links:

Danny’s website: https://www.ghgpolicy.org/

Webinar: What Role Will Carbon Removal Play Under Article 6 of the Paris Agreement? https://youtu.be/jovH809dhg0?si=e96ktXxTcRcKJvRd

Sean Vanatta is a lecturer in US Economic and Social History at the University of Glasgow and author of the new book "Plastic Capitalism: Banks, Credit Cards, and the End of Financial Control." Sean sits down with Lee to discuss the history of credit cards in the United States and how this history informs current policy debates, including Capital One’s proposed acquisition of Discover and the Credit Card Competition Act.

Lee’s X: @leereiners

Sean’s X: @SeanVanatta

Related Links

Plastic Capitalism: Banks, Credit Cards, and the End of Financial Control: https://yalebooks.yale.edu/book/9780300247343/plastic-capitalism/