The LXR Group is a full service public policy and regulatory consulting firm based in Washington, DC.
We focus on investment, capital markets, and other financial services issues.
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LXR Group Blog
Policy & Regulatory Updates
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Analysis: Waters Flexes at April 2023 House Financial Services Committee Mega Markup
"From a position of relative weakness, Waters managed a feat that – at least to our already Godfather addled brains – recalled the strategy if not the techniques that Michael Corleone used to restore order in the family at the end of the first flick. Indeed, the Ranking Democrat seized on the markup and the temporary leverage it presented to inflict stinging defeats on Republicans, industry-friendly moderates, and Wall Street lobbyists. In knocking back an industry-backed e-delivery bill that seemed certain to sail through but ended up being put into a deep freeze due to opposition from AARP and consumer advocate organizations, the Ranking Member seemed almost to be channeling Michael’s timeless retort to U.S. Senator Pat Geary: “Senator, you can have my answer now, if you like. My final offer is this: nothing.”'
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Analysis: SEC Chair Gary Gensler’s April 18, 2023 Appearance before the House Financial Services Committee
"In what we view as the most important and consequential exchange of the day, Gary Gensler badly mishandled opening questions from the HFSC Chair about whether the cryptocurrency Ether is a security. In his defense, Gensler appears to have not wanted to speak on behalf of the agency on this important question that the five commissioners have yet to vote on, but he walked into McHenry’s trap aimed at exposing the lack of clarity around the SEC’s continued position on crypto. Indeed, despite the fact that he and his talented staff have been working on crypto for 18 months—and have been thinking about how to respond when Congressman Patrick McHenry asks him to explain the agency’s regulatory framework for crypto—and that McHenry has been pressing and pressing and pressing the SEC Chair to provide “clarity” with respect to his thinking on digital assets generally and Ether specifically, we were frankly baffled."
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Analysis: Nine Takeaways from SEC Chair Gary Gensler’s March 29th Appearance before the House Appropriations FSGG Subcommittee
"House Republicans devoted the overwhelming majority of their time to criticizing the SEC’s decision to pursue a climate disclosure rule, drowning out all other issues. Whereas Gensler’s previous several appearances before Congress have seen Republicans largely split their focus between crypto-policy and climate risk disclosures, yesterday’s hearing erased any doubt about Republicans’ singular focus at the moment is on the SEC’s climate risk disclosure rulemaking. Indeed, four of the nine Republicans on the Subcommittee – Reps. Ashley Hinson (R-IA), Michael Cloud (R-TX), John Moolenaar (R-MI) and Jerry Carl (R-AL) – used all of their allotted time to criticize Gensler and the SEC for its decision to pursue climate-related disclosures. Committee Chairman Steve Womack (R-AR) similarly used the bulk of his two rounds of questioning to focus on the issue. Only a handful of other issues such as “capital formation,” comment deadlines, and a recent critical SEC Inspector General’s report were mentioned. Even then, these issues were often raised in the context of the climate rulemaking to underscore why the SEC should not be pursuing its climate rule."
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Analysis: Abrupt Failure of Silicon Valley Bank Threatens to Upend Federal Financial Services Policy Landscape
"One emerging vector of Democratic criticism is a 2018 law that weakened oversight of many regional banks. On Monday, for example, Rep. Ayanna Pressley (D-Mass.) called for a hearing to investigate "how Republicans’ 2018 bank deregulation bill contributed to SVB’s risky behavior and jeopardized financial stability for far too many.” Rep. Katie Porter (D-CA), who’s running for a newly open Senate seat in California, said she would introduce legislation to undo the 2018 law. Other progressives, such as Sen. Elizabeth Warren (D-MA), on Monday used the SVB fiasco to excoriate “Wall Street lobbyists and Republicans in Congress” for “pushing Fed Chair Powell for weak capital requirements at exactly the wrong time.” By Tuesday morning, Sen. Warren had sent SVB’s CEO, Gregory Becker, a letter requesting information “about your successful efforts to roll back banking regulations and exempt your bank from the protections Congress enacted with the Dodd-Frank [Act]…designed to safeguard our banking system and economy from the negligence of bank executives like yourself[.] "
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Biweekly Bulletin on Financial Services and Capital Markets Policy (S. 2, Vol. 2- Feb. 14 – March. 3, 2023)
"At its March 2 meeting, the Investor Advisory Committee (IAC) held a spirited and revealing discussion surrounding the adequacy of the SEC’s present examination program as it relates to SEC registered investment advisers. It was the first time in years that the IAC has looked at this vexing issue, and we believe it is likely that we’ll be hearing much for about it in the coming months. The IAC discussion, which followed a panel presentation entitled “Oversight of Investment Advisers: Can Regulators Keep Up with Growth in the Industry,” saw IAC members quiz SEC Examination Division Co-Director Natasha Vij Greiner about the sufficiency of the agency’s present 15% examination rate, and seven-year examination cycle."
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Analysis: Seven Key Takeaways from Today’s House Financial Services Committee Markup
"In a perhaps inevitable corollary to his self-conscious emphasis on bipartisanship, in his opening statement and throughout the markup, Rep. McHenry made clear in words and his conduct that he views the HFSC as primarily a policymaking committee rather than a political committee. “We are a legislating committee. I renew my call for every Member to bring your ideas to me–my door is open. These are not messaging bills or a markup to clear the decks. To that end, it is my expectation we will hold several markups throughout the year on serious bills.” During the course of the markup, McHenry engaged in colloquy with a half-dozen Democrats, and commitments to address issues they raised and care about, such as with respect to strengthen enforcement of GLB, and the use of bio-metric data by financial services firms."
