J.P. Morgan announced the creation of a blockchain-based currency, becoming the "first U.S. bank to create and successfully test a digital coin representing a fiat currency." Umar Farooq, head of Digital Treasury Services and Blockchain for J.P. Morgan stated that "JPM Coin is currently a prototype that will be tested with a small number of J.P. Morgan’s institutional clients, with plans to expand the pilot program later this year." He said that JPM Coin is currently designed for business-to-business money movement flows." Further, Mr. Farooq said that JPM Coin has a value equivalent to one U

The House Financial Services Subcommittee on Consumer Protection and Financial Institutions (the "Committee") held a hearing on access to banking services for cannabis-related businesses. At the hearing, the Committee considered a " discussion draft" of the Secure and Fair Enforcement Banking Act of 2019 (the "SAFE Act of 2019"), which would allow banks to provide banking services to state-legal cannabis businesses. According to a staff memorandum, numerous financial institutions expressed interest in providing banking services to state-authorized cannabis-related businesses. The staff

The Federal Reserve Board ("FRB") identified an error in the historical dataset utilized in its 2019 stress tests. As previously covered, the FRB issued scenarios for the 2019 Comprehensive Capital Analysis and Review and Dodd-Frank Act stress tests. Each scenario includes 28 variables ( e.g., gross domestic product, the unemployment rate, stock market prices and interest rates) that cover domestic and international economic activity. The mortgage rate, which is one of the variables for the supervisory scenarios, in the fourth quarter of 2018 was originally published as 4.6 percent. The FRB

A broker-dealer agreed to settle FINRA charges for failing to identify and apply available sales charge waivers on sales of variable annuities to eligible retirement accounts and charitable organizations. Kestra Investment Services, LLC ("Kestra") allegedly failed to train its employees fully and failed to establish and maintain a sufficient supervisory system designed to make sure that eligible customers who bought mutual fund shares received the benefit of applicable sales charge waivers. To settle the rule violations, Kestra agreed to a censure, and to pay $225,000.

The Office of the Comptroller of the Currency, the Federal Reserve Board and the FDIC adopted a rule to provide banking organizations with the option to "phase in over a three-year period the day-one" regulatory capital effects of the "Current Expected Credit Losses" methodology. The rule was published in the Federal Register ( see here for previous coverage). The rule will become effective on April 1, 2019.