A group of Republicans in the House are seeking answers from the Federal Deposit Insurance Corporation (FDIC) on its plans related to the digital asset activities of regulated financial institutions.
In a letter to Acting FDIC Chairman Travis Hill, the lawmakers also outlined five recommendations that would help clarify regulations surrounding digital assets. The recommendations include:
- Written, Public Guidance: Require all banking supervisory guidance to be written and publicly disclosed (with limited redactions), ending informal “verbal-only” directives.
- Concrete Rationale for Account Closures: Respecting Bank Secrecy Act requirements, explore ways for financial institutions to provide a clear explanation to customers when closing their account to ensure accountability.
- Eliminate “Reputational Risk”: Prohibit use of reputational risk as a supervisory factor and clarify and reform the use (including consideration of removing as a factor) of “management” from CAMELS assessment to prevent abuse or discrimination.
- Balancing Test for Regulations: Subject all supervisory guidance to an external, periodic review that weighs regulatory benefits against impacts on law-abiding Americans’ banking access.
- Uniform Application: Ensure all supervisory guidance and rules apply equally to all institutions, barring preferential or punitive case-by-case treatment.
“We are writing to better understand the plan for the Federal Deposit Insurance Corporation’s (FDIC) regulatory and supervisory work related to the digital asset activities of regulated financial institutions. We want to thank you for releasing documents related to the FDIC “pause letters.” This action shows your commitment to transparency and accountability at the Corporation, and we hope that we can work together to provide clarity regarding this issue,” the lawmakers wrote.
The letter was signed by Reps. French Hill (R-AR), chairman of the House Financial Services Committee, Dan Meuser (R-PA, chairman of the Subcommittee on Oversight and Investigations, Andy Barr (R-KY), chairman of the Subcommittee on Financial Institutions, and Bryan Steil (R-WI), chairman of the Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence.
“Please provide information regarding the FDIC’s next steps and which actions the FDIC can take now without action by Congress,” they continued. “While we understand that there is still a need for Congressional action to help clarify regulations surrounding digital assets, we hope that you will look at these recommendations and implement them appropriately. We also understand that some of these recommendations may require an act of Congress for you to utilize them. In that case, please let us know which recommendations you believe require an act of Congress to help better inform our legislative efforts.”