Politics

The letter, which was sent to bank regulators, represents a further escalation of lawmaker criticism of the Basel III endgame proposal, and comes just as Federal Reserve Chairman Jerome Powell is set to testify in the House Financial Services Committee.

Rep. Maxine Waters, ranking member of the House Financial Services Committee, led the letter, spurred by the recent merger announcement between Capital One and Discover, which the letter said would enable the merged company "to influence multiple points of the marketplace."

Federal Reserve Vice Chair for Supervision Michael Barr said in a speech Tuesday that banks might need to establish margin to counteract counterparty risks presented by private funds.

The lawmakers, led by Sen. Elizabeth Warren, D-Mass., said the deal would further anti-consumer bank consolidation, but also criticized the OCC's proposed changes to the merger process, asking that they be strengthened.

The blockbuster merger proposal will be reviewed at a time when the Biden administration is expressing skepticism about consolidation. Its analysis will have to account for markets dominated by both big banks and the likes of Visa and Mastercard.

A clash over pay playing out in contract negotiations between the Consumer Financial Protection Bureau and its employee union occur as the Supreme Court is considering whether the agency must get its funding from Congress.

Federal Reserve Chairman Jerome Powell suggested that a rate cut is coming, but cast doubt about whether the central bank would see enough data suggesting inflation is sufficiently tamed for interest rates to come down at their next meeting.

Bank regulators Friday said the existing laws governing safety and soundness and fair lending are adequate to address risks posed by artificial intelligence, noting that while AI may be used to inform lending decisions, banks are ultimately responsible for compliance.

A group of Democratic lawmakers have written to federal regulators asking them to reconsider potential chilling effects on clean energy financing in the Basel III endgame proposal.

Federal Reserve Vice Chair for Supervision Michael Barr said feedback received will be incorporated into the final version of the capital reform rule.