Fed's Powell says economy is strong but warns of headwinds | Report: Fiduciary rule cut sales of high-load mutual funds | Banks wary of Libor alternatives
November 16, 2018
Financial Services SmartBrief
News for financial services executives
Top Story
Fed's Powell says economy is strong but warns of headwinds
Federal Reserve Chairman Jerome Powell has delivered an upbeat assessment on the health of the US economy, saying it has room for further growth. However, he noted potential headwinds from factors including slowing demand from abroad, protectionism and the effects of the end of fiscal stimulus, which could influence the Fed's longer-term policy on interest rates.
Bloomberg (tiered subscription model) (11/15) 
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Industry Watch
Report: Fiduciary rule cut sales of high-load mutual funds
After the US Labor Department proposed its fiduciary rule in 2015, brokers' sales of funds paying "unusually high excess loads" declined, according to a report from Morningstar. "This reduction in the distortionary effect of conflicted payments suggests that firms put in place effective policies and procedures to mitigate conflicts of interest in response to" the rule, the report said.
InvestmentNews (tiered subscription model) (11/15) 
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Banks wary of Libor alternatives
Libor is likely to be discontinued, and other benchmarks are available, but Libor alternatives aren't being written into financial contracts. Banks say there is too much uncertainty to reference alternative benchmarks, despite regulators' frustration the process is moving slowly.
Practice Insight (11/15) 
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Whistleblower reports to SEC up 18% in fiscal 2018
The Securities and Exchange Commission's Office of the Whistleblower received 5,282 reports in fiscal 2018, an 18% increase compared with fiscal 2017, according to an SEC report to Congress. The agency paid $168 million to 13 whistleblowers in fiscal 2018, up from almost $50 million to 12 individuals in fiscal 2017.
ThinkAdvisor (free registration) (11/15) 
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Trade group: Banks' ability to invest in VC funds should be restored
The Volcker rule provision that keeps banks from investing in venture capital funds is regulatory overreach that does nothing to further the objectives of the law and should be changed, writes Charlotte Savercool of the National Venture Capital Association. NVCA has proposed two solutions that would allow banks to invest in VC funds while implementing the objectives of the Volcker rule, she writes.
NVCA Blog (11/15) 
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Regulators ease rules for banks in Calif. wildfire areas
Banks in areas hit by California's wildfires will not be penalized for missing reporting requirements, state and federal regulators say. Regulators also agreed that banks could ease some loan terms to help borrowers.
Reuters (11/15) 
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The Latest from Capitol Hill
Bowman will take seat on Fed board
Michelle Bowman has been confirmed by the Senate to the Federal Reserve Board's community banking seat. Bowman, who served as chief bank regulator in Kansas and was an executive at Farmers & Drovers Bank, is expected to advocate for changes to the Dodd-Frank Act.
The Hill (11/15) 
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Sen. McConnell files motion to clear path for CFPB nominee
Senate Majority Leader Mitch McConnell, R-Ky., has filed for cloture for consideration of Kathy Kraninger's nomination to lead the Consumer Financial Protection Bureau. If confirmed, Kraninger will take over for Mick Mulvaney, who has served as acting director since Richard Cordray resigned last year.
The Examiner (Washington, D.C.) (11/15) 
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Retirement Security
Using an HSA for retirement planning
Health savings accounts can be valuable retirement-savings vehicles if money is allowed to build up tax-free over time. However, a study by the Employee Benefit Research Institute suggests many people aren't investing funds for the long term or maximizing contributions.
The Arizona Republic (Phoenix) (tiered subscription model) (11/15) 
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Self-knowledge is no guarantee of happiness, but it is on the side of happiness and can supply the courage to fight for it.
Simone de Beauvoir,
writer and activist
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