We have an opportunity to pass meaningful crypto commodity legislation. ~80% of all crypto trading is in bitcoin and ether, which the SEC agrees are commodities. Democrats should not leave customers unprotected in these markets. 1/
This bill is STRONGER than the Securities Exchange Act of 34 on its face, and allows the CFTC to write the same customer protection rules the SEC has developed. It would require that centralized brokers and exchanges follow the same types of rules as in the securities markets. 2/
Jul 24, 2024 • 4 tweets • 2 min read
Calling all bank nerds! I joined @AlexH_Johnson and @khaslett on the latest episode of Bank Nerd Corner, a monthly episode of the Fintech Takes podcast, to discuss two recent papers of mine on consumer shadow banks and bank supervision. 1/
podcasts.apple.com/us/podcast/fin…
We talk about how unregulated maturity transformation, which is the central risk of banks (and shadow banks), can be abusive to customers and how the CFPB should regulate money transmitters, stablecoin issuers, and crypto banks.
Lummis-Gillibrand stablecoin bill seems to ban tokenized deposits (the safest of all stablecoins) and lets tokenized money market mutual funds evade scrutiny.
punchbowl.news/lip24254/
Looks like stablecoin issuers would need to do KYC for incoming money, but doesn't do anything to address the problem of stablecoins being sent to non-KYC'd wallets.
Oct 10, 2023 • 5 tweets • 2 min read
Today, @beau_baumann and I filed an amicus brief in the @SECGov v. @coinbase case, with the great help of lawyers at @DemocracyFwd. We argue that the SEC's enforcement action does not trigger the major questions doctrine. 1/
We make three arguments:
First, the SEC is simply attempting to vindicate its best reading of the statute, as it has done countless times before. This doesn't implicate separation-of-powers concerns, as prior agency actions in MQD cases have. 2/
Apr 15, 2023 • 27 tweets • 8 min read
Alright, new stablecoin legislation just dropped. Follow along as I dive in!
docs.house.gov/meetings/BA/BA…
New term: Payment stablecoin. (A)(i) means that a SC could shift from being a payment stablecoin to a nonpayment stablecoin based on how it is used. (A)(i)(ii)(II) looks like it includes algo stablecoins.
It also explicitly excludes MMMFs, which can be issued as SCs.
Apr 14, 2023 • 4 tweets • 1 min read
This is an opinion that makes complete and total sense, which is why it was 9-0. Agencies expert in particular areas of law should not be opinion on their own constitutionality.
Requiring them to do so would go against the reasons we have expert agencies in the first place.
Think of it this way: The SEC gets to shape the securities laws. We want them doing that, because Congress can't legislate quickly enough & courts aren't experts here.
But if we say the SEC can opine on constitutional issues, we're asking them to go outside their ambit. 2/
Feb 8, 2023 • 5 tweets • 1 min read
Some thoughts on the Fed's § 9(13) statement in the FR today.
This is a nothingburger statement that people are blowing out of proportion.
federalregister.gov/documents/2023…
It applies to state member banks, and it effectively says that the Fed will allow them to engage in activities that the OCC lets NAs & the FDIC lets state nonmember banks engage in. The 3 agencies have been consistent on wanting uniform rules so there's no charter shopping. 2/
Oct 19, 2022 • 13 tweets • 3 min read
Today, the Fifth Circuit declared the CFPB's funding mechanism unconstitutional. The logic is formalistic to the Nth degree, saying that Congress cannot fund agencies outside of the trad. appropriations process. Could have consequences for the FBAs, too.
aboutblaw.com/5mY
Start on page 23. The CFPB succeeds at all other arguments, so no need to discuss.
The Constitution says "No money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law." Court says there are separation of powers reasons for this.
Dec 16, 2021 • 17 tweets • 10 min read
.@FDICgov Chairman McWilliams' op-ed consists of so many flawed arguments and intentional misdirections, it's hard to list them all. However, here's an attempt.
wsj.com/articles/hosti…@FDICgov The FDIC's "structure was designed to ensure independence from changing political administrations."
Yes, but (1) SCOTUS threw that out by allowing POTUS to fire two FDIC's directors at will (Seila Law v. CFPB) and (2) independence from POTUS doesn't mean Chair rules by fiat.
