The CFTC withdrew 2024 guidance on the listing for trading of voluntary carbon credit derivative contracts. A framework that enhances trust and oversight in carbon credit trading markets is essential for ensuring that voluntary carbon credits play a meaningful role in combating climate change.

The FSOC said it would not be using its authority to designate shadow banks for Federal Reserve supervision, said it would eliminate work related to climate-related financial risk, and cut its budget which will hamper all its workstreams going forward.

In a historic dereliction of duty, the FSOC voted on several changes that will abandon its statutory mandate to protect the economy, banking system, and American people from financial risk. First, it said that it would not be using its designation authority to oversee shadow banks’ activities. Second, it eliminated work and committees to oversee climate-related financial risk, a known threat to banks, the economy, and all Americans. Third, it cut its operating budget, which will further prevent it from fulfilling its legislatively mandated mission.

The FDIC eased standards for terminating cease-and-desist orders, which are issued to remedy banking violations. Under the updated policy, an order may now be lifted when a bank has achieved substantial compliance, rather than demonstrating full compliance with the order.

Cease-and-desist orders are a key enforcement tool in the banking sector, used to halt unsafe, unsound, or illegal activities and require the institution or individuals involved to take corrective action.

By lowering the standard for terminating these orders, culpable institutions or individuals will not have to meet all corrective actions outlined in the order. Weaker enforcement and oversight increases the risk that unresolved problems will persist, potentially leading to greater instability in the banking system.

The OCC clarifies that it will consider debanking factors in its assessments of licensing filings (such as new bank applications, mergers, or other such changes). It will also consider such factors in Community Reinvestment Act (“CRA”) evaluations.

While the OCC, and all regulators, should absolutely protect against unlawful and discriminatory actions by banks, this action by the OCC is particularly egregious and disingenuous because it is not focused at all on discrimination of low-income borrowers or other underserved communities, which the CRA is supposed to protect.

Eliminating supervisors will leave the SEC with an inexperienced staff unable to best protect investors.

The SEC and CFTC issued a joint statement saying that SEC and CFTC-registered exchanges are not prohibited from facilitating the trading of certain spot crypto asset products.

The guidance paves the way for the trading of crypto asset products without sufficient investor protections.