Certified Financial Planner (CFP) is a formal recognition of expertise in the areas of financial planning, taxes, insurance, estate planning, and retirement saving.
Owned and awarded by the Certified Financial Planner Board of Standards, Inc., the designation is awarded to individuals who successfully complete the CFP Board's initial exams, then continue ongoing annual education programs to sustain their skills and certification.
CFPs are there to help individuals manage their finances. This can include a variety of needs, such as investment planning, retirement planning, insurance, and education planning. The most important aspect of a CFP is to be a fiduciary of your assets, meaning that they will make decisions with your best interests in mind.
CFPs are all-encompassing, particularly when compared to investment advisors. CFPs will usually start the process by evaluating your current finances, including any cash, assets, investments, or properties, to come up with an estimate of your income and net worth. They also take a look at your liabilities, such as mortgages and student debt.
From this point on they work with you to come up with an individualized financial plan. For example, say you are nearing retirement, the CFP will create a financial plan that can see you through your retirement years. Or perhaps you have a child that will be starting college. The CFP can help create a financial plan to manage that cost.
A CFP is a financial adviser who has earned a certification that indicates in-depth knowledge of financial planning. The requirements to become a CFP are some of the most difficult and stringent in the financial industry.
All CFPs are held to the standard of fiduciary duty. That means they must always put your interests as a client ahead of their own. For example, if they would more money selling one product over another, but the product that made them less money was better for you, that is the product they must recommend.
A CFP's fiduciary duty is clearly laid out by the CFP Board and states "At all times when providing financial advice to a client, a CFP professional must act as a fiduciary, and therefore, act in the best interest of the client."
The board goes on to state that three duties must be met by an adviser with a fiduciary duty. These are (1) duty of loyalty, (2) duty of care, and (3) duty to follow client instructions.
Earning the CFP designation involves meeting requirements in four areas: formal education, performance on the CFP exam, relevant work experience, and demonstrated professional ethics.
The education requirements comprise two major components. The candidate must hold a bachelor's or higher degree from an accredited university or college. Second, the candidate must complete a list of specific courses in financial planning, as specified by the CFP Board.
Much of this second requirement is typically waived if the candidate holds certain accepted financial designations, such as a chartered financial analyst (CFA) or certified public accountant (CPA) designation, or has a higher degree in business, such as a master of business administration (MBA).
As for professional experience, candidates must prove they have at least three years (or 6,000 hours) of full-time professional experience in the industry, or two years (4,000 hours) in an apprenticeship role.
Lastly, candidates and CFP holders must adhere to the CFP Board's standards of professional conduct. They must also regularly disclose information about any involvement in criminal activity, inquiries by government agencies, bankruptcies, customer complaints, or terminations by employers. The CFP Board conducts an extensive background check on all candidates before granting the certification.
Even successful completion of the above steps doesn't guarantee receipt of the CFP designation. The CFP Board has final discretion on whether to award the designation to an individual.
The CFP exam includes 170 multiple-choice on more than 100 Topics related to financial planning. The scope includes professional conduct and regulations, financial planning principles, education planning, risk management, insurance, investments, tax planning, retirement planning, and estate planning.
The various course areas are weighted, and the most exact weighting is available on the CFP Board website. Further questions test the candidate's expertise in establishing client-planner relationships and gathering relevant information, and their ability to analyze, develop, communicate, implement, and monitor the recommendations they make to their clients.
Here's some additional information on the administration, costs, and scoring of the CFP exam:
Though a certified financial planner (CPA) and a chartered financial analyst (CFA) may sound similar, they are different certifications with different job functions and clients. A CFP works with individuals, often retail clients, helping them achieve their financial goals. This includes help in investing and retirement planning.
A CFA works with corporations performing investment analysis. CFAs focus on financial reporting, analysis, and portfolio management. They can trade financial products, such as derivatives, and help in mergers and acquisitions. CFA's usually work for investment banks and hedge funds.
If you are just looking to invest money in stocks and bonds, a CFP probably isn't needed.
If you are looking to manage your finances, investment choices, estate planning, and retirement planning, a CFP can help you with all of those needs.
A CFP is a step above a non-designated financial advisor and has demonstrated expertise in financial planning.
How much a CFP costs will depend on your specific needs.
On average, a CFP charges between $1,800 and $2,500 for preparing a full financial plan. You also should expect $4,000 for a flat-fee retainer or $250 per hour for hourly services.
No, CFP and CFA are not the same.
A CFP is a certified financial planner who provides financial planning advice to individuals. This includes help with investing, retirement planning, estate planning, and tax law.
A CFA is a chartered financial analyst who may work for an investment bank or hedge fund and performs financial analysis, modeling, trading, and portfolio management services.
No, a CFP is not equivalent to an MBA.
A certified financial planner (CFP) is qualified to advise individuals on financial planning.
The holder of a master of business degree has studied the way businesses operate.
The career paths differ. A CFP works in financial consulting or wealth management. An MBA may be a business manager, portfolio manager, financial analyst, financial strategist, or even an entrepreneur.
The CFP test requires a lot of preparation and covers a wide range of Topics in depth. The best way to ensure you pass the CFP test is by preparing for it well in advance and sticking to a study schedule.
Becoming a CFP takes education and experience, as well as a strong grasp of financial ethics. The test to gain this distinction is comprised of 170 questions and is split into two three-hour sessions.
Even if candidates pass the test and meet all the requirements, the CFP Board still has the final say about whether to award this distinction. Given the stringent requirements, CFPs can be assumed to have an in-depth understanding of financial planning.
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A Certified Financial Planner (CFP) is a professional designation for the financial planning profession. Financial planners can earn the CFP designation after completing the CFP Board's education, exam, experience, and ethics requirements.
One of the more challenging steps in the process, the CFP exam, is a pass-or-fail test. You may register for the CFP test after meeting the CFP Board's education requirements. Once you pass the exam, you will be one step closer to becoming a CFP professional, one of the most elite financial planning designations.
To create our list of the best CFP test prep courses, we compared each program's features, including reputation, cost, guarantees, course materials, in-person classes, special features, and more. These are the best CFP test prep courses for aspiring CFP professionals.
Opinion editor's note: Editorials represent the opinions of the Star Tribune Editorial Board, which operates independently from the newsroom.
With the well-acknowledged high cost and limited availability of quality child care, expanding access to more families is important. Years of research have shown the value of providing children with care and educational basics that prepare them for kindergarten.
Public policy that provides low-income families with child care assistance can pay significant dividends in educational achievement and financial stability.
But we have questions about the St. Paul City Council's existing approach to offering aid to its residents. Last week, the council overrode a mayoral veto and approved asking voters in 2024 to raise property taxes to pay for child care subsidies for low-income families. The plan would increase St. Paul property tax collections by about $2 million each year for 10 years, at which point voters would be asked to reauthorize it. The owner of a median-value home would pay $16 more in year one, increasing to an additional annual payment of $160 in year 10.
St. Paul Mayor Melvin Carter has questions, too, which is why he wisely rejected plans to put the question on the ballot in November 2024. But with a 5-2 vote, council members overrode his veto.
Carter told Star Tribune Editorial Board members — and the council, in his veto letter — that the plan raises less than the actual cost. "While the underlying goal behind this effort … is laudable, our excitement for this bold proposal must not preclude a temperate examination of its details," he wrote. "It is difficult to conclude that this proposal in current form could effectively deliver on the expectations that have brought it to my desk."
At a news conference, Carter added: "This is a $100-million-plus proposal that we to date have still seen no plan for, that we to date have still seen no budget for, that has insufficient resources associated with it, and that frankly no one is suggesting that they have any idea how to make it work."
Since 2017, advocates including Council Member Rebecca Noecker have been working on the plan. The effort was spearheaded by the St. Paul All Ready for Kindergarten coalition, or SPARK, with the goal of helping 5,000 St. Paul families with 3- and 4-year-olds. Families living at or below 185% of the federal poverty level — about $51,000 for a family of four — would be eligible. Noecker has said the program is designed to start small and grow over time, and she has acknowledged that there are greater funding needs than the levy would cover.
In 2018, when advocates tried to raise early-learning funds through a city sales tax, St. Paul had 1,000 children on waiting lists for government-funded preschool programs. And St. Paul Public Schools reported that by third grade, significant achievement gaps surface. About 20% of low-income students met state studying standards around that time, compared with 66% of their more affluent peers.
It's those needs that fuel Council Member Jane Prince's support of the ballot initiative. She told an editorial writer that her support of city-funded child care goes back many years and is based on early education research done by former Federal Reserve Bank executive Art Rolnick.
"I understand concerns about whether the city should be involved in child care," she said. "But we've got to do a better job of making the case to the public. … Ensuring universal access to early learning for 0- to 5-year-olds is the most powerful economic development investment we can make as a city to prepare children to be successful in school and in our future workforce while providing safe, quality affordable care to allow parents to succeed in our current workforce."
Two veteran council members who are retiring from their seats also voted in favor of the plan. Council President Amy Brendmoen and Council Member Chris Tolbert said they voted yes because they think residents should be able to weigh in on the issue. Still, both said they would not vote for the current language if it appears on the ballot next November.
As one of the two no votes, Council Member Mitra Jalali has said it's irresponsible to ask voters to make a 10-year financial commitment without more clarity on program details.
After this fall's election, the newly elected City Council should take a fresh look at whether the ballot language is ready to go to voters. It's clear now that more discussion is needed to flesh out how the city-sponsored program would be implemented and sustained.
Microsoft helped launch the PC and internet age. It is an established brand and a household name around the world. Individuals, companies, and government agencies depend on the operating systems, applications, and cloud services developed by Microsoft—which is why vulnerabilities in Microsoft software can have potentially massive consequences.
In the wake of exact vulnerabilities and high-profile attacks, there is growing concern regarding vulnerabilities present in Microsoft's software and increasing intensity focused on the question of Microsoft’s culpability. Customers, competitors, and even U.S. senators have stressed that these issues expose companies and government agencies to significant risk and raise questions about the company's practices in both cybersecurity and competition.
I recently spoke to Shawn Henry, Chief Security Officer (CSO) at CrowdStrike, about Microsoft. Henry has broad and unique perspective to bring to the issue, having spent more than 24 years with the FBI before joining CrowdStrike. Henry led the global Cyber Division and Critical Incident Response Group and has insight that straddles the public and private sectors.
Before we get into more of my conversation with Henry, though, let’s set the stage on exact events.
Microsoft releases security patches on the second Tuesday of each month—which was this week. For August 2023, Microsoft issued two security advisories and addressed 74 different CVEs. The flaws affected everything from Teams and Exchange Server to the Windows Kernel and Microsoft Office. In all, there were six vulnerabilities rated as Critical, and 67 with a rating of Important—with 23 exploitable via remote code execution (RCE).
That brings the total for the year so far to 690 vulnerabilities fixed by Microsoft. Nearly 10% (63) have been rated as Critical, while almost a quarter (24%) allowed elevation of privileges if properly exploited, and more than a third (36%) allowed for remote code execution.
There is no such thing as perfect code, so when you are a company with literally hundreds of millions of lines of code, there will be flaws. The volume and criticality are another issue, though. Henry and I talked about how it is that consumers or government agencies don’t hold Microsoft accountable for the quality of their products.
Henry noted, “If we had the government buying tanks that stopped on the battlefield or jets that couldn't take off—and it happened month after month, year after year for decades—I think there'd be an issue. There'd be a big problem.”
Microsoft has always been a popular target for threat actors. When you have the dominant operating system in the world, and a formidable chunk of market share for email platforms, productivity software, and cloud services and applications, bad guys are going to focus their attention on finding weak links to exploit.
In the past few months, Microsoft's software has seen a series of high-profile breaches and security flaws. From vulnerabilities in the Windows operating system to holes in various applications and services, Microsoft's products have become a recurring point of attack for malicious hackers and cybercriminals.
These vulnerabilities have had far-reaching implications. Businesses suffer financial losses and reputational damage, while government agencies face risks to national security. The dependency on Microsoft's products in vital sectors further exacerbates these concerns.
Senator Ron Wyden has been a vocal critic of Microsoft's handling of security. Following revelations that attackers working for China were able to access Microsoft’s email platform and spy on senior diplomats, including the U.S. Ambassador to China, the senator has called for an investigation by the Cybersecurity and Infrastructure Security Agency (CISA), Department of Justice (DOJ), and the Federal Trade Commission (FTC) into Microsoft's practices.
The letter highlights several instances of security breaches and failures and calls into question Microsoft's commitment to protecting its users. Senator Wyden's concerns are backed by many in the industry, as detailed in a Reuters report.
When I talked with CrowdStrike’s CSO, one of the things we talked about was the fact that Microsoft has hundreds of software engineers working in China. Microsoft is a global company, and there is obviously a need to regionalize or localize aspects of the software, so at face value, it seems reasonable. However, the rules are different in China—and that has a potentially huge impact.
China is a huge market, and the country is a key partner for the U.S. and other Western nations, but it is admittedly a “frenemy” or “coopetition” scenario because China is also a primary competitor and potential threat. China is playing the long game—executing a 100-year plan to establish itself as the preeminent superpower by 2047. They are using every means necessary—Chinese citizens, ex-pats, witting and unwitting Americans, and others in an effort to collect intelligence on the U.S. economy, military, defense industrial base, technology, and other sectors.
I don’t fault China—or any nation—for striving to be more powerful or influential, and I assume that the United States and other nations follow many of the same practices when it comes to gathering intelligence. Where it gets more complicated, though, is that companies in China answer to the CCP (Chinese Communist Party), and the government requires that members of the party hold decision-making executive roles. There is a lot that must be shared with the government. Businesses are expected to provide keys to encrypted devices and provide access to offices—and to source code.
“You're telling the public they can't use Huawei, and they can't let kids watch dance videos on TikTok because China is going to collect intelligence—yet the most ubiquitous software, which is used throughout the government and throughout every single corporation in this country and around the world, has engineers in China working on their software,” emphasized Henry.
Adding to the complexity of the situation, Microsoft is not just a provider of software and operating systems but also a competitor in the cybersecurity market. They offer tools and services to protect against cyberattacks, often targeting the vulnerabilities present in their own products.
It is impractical to expect Microsoft to write code with zero vulnerabilities. However, it is fair to examine the volume of Critical vulnerabilities and to question whether there is more Microsoft could do to develop more secure code in the first place, as well as if it is reasonable for Microsoft to sell customers security tools and services to defend against attacks on vulnerabilities they created.
It feels a bit like asking the arson to put out the fire. Critics argue that Microsoft should invest its resources and effort in making more secure products rather than "double-dipping" by selling additional software and services to protect the flaws they exposed users to. A report on Cyberscoop details an example of this negligence, which can leave consumers feeling trapped in a cycle of dependency on Microsoft.
Personally, I am a fan of Microsoft. I always have been. I prefer the Windows operating system, and I have used a Microsoft Surface device as my day-to-day PC for the past decade. The vast majority of my work days are spent using Microsoft software—Word, Outlook, Excel, PowerPoint, Teams, etc. I highly recommend Microsoft tools and applications.
However, Microsoft's vulnerabilities are a growing concern that goes beyond mere technical flaws. The issues raise critical questions about corporate responsibility, market competition, and national security. Senator Ron Wyden's call for an investigation highlights the urgency of the situation.
It is time for a thorough examination of Microsoft's practices and a concerted effort from the company to rebuild trust. This involves not just patching existing vulnerabilities but creating a culture that prioritizes security, transparency, and the interests of users above profit-driven motives.
It is a complex challenge, but one that Microsoft must meet to maintain its credibility as a leader in the technology industry.
When Lionel Danenberg’s upstart company won preliminary approval for a banking charter from the Idaho Department of Finance in August 2022, he thought his four-year quest to launch an app-based payments bank for small-business commodity producers was about to pay off.
In meetings with federal regulators, he had tried to convey that his new financial company would be safe and profitable. Just a few months earlier, the Federal Deposit Insurance Corp. had ruled that for his bank, as a nonlending payments bank promising to maintain full backing for all its deposits, no insurance would be required. Officials from the Federal Reserve Bank of San Francisco, nominally tasked with granting Danenberg’s request for a master account at the central bank, told him that based on his business plan, they would be in a position to approve the request once a state banking charter had been granted.
Master accounts, which provide banks and credit unions access to the Federal Reserve’s financial services to settle and clear global transactions, are at the center of trillions of dollars of daily money flows. Danenberg needed access in order for his business to function.
But after the charter was conferred, the Fed fell silent. Nearly 10 months passed before it sent a one-page letter to Danenberg denying his request. It said that Danenberg’s “unproven” and “novel business model” presents undue risk to the U.S. central bank, and that the company’s focus on international trade leaves it open to “money laundering and terrorism financing risks.”
Danenberg, 33, said he was “disgusted” when he received the letter, having spent the better part of his adult life dreaming of building a company that could enable small businesses to access international markets without needing the goodwill of one of the handful of megabanks that now dominate cross-border trade settlement.
“Today, the way business works, only the elites have the ability to have bank accounts all over the world to move money between continents,” Danenberg told MarketWatch. “We want to change that.”
Danenberg isn’t the first entrepreneur to crash his ship on the rocky shores of the byzantine U.S. system of financial regulation, but he hopes to be one of the few to ever take the Federal Reserve to court and win.
His case, filed in federal court in Boise, is one of three filed this year challenging the Fed’s discretion to deny state-chartered banks access to the nation’s public financial infrastructure. The others are a Wyoming cryptocurrency-custody bank that was denied a charter and a Puerto Rican bank that had its charter revoked amid accusations of insufficient money-laundering controls.
The Fed has increasingly been blocking new banks engaged in innovative and unconventional activities from obtaining master accounts, much to the frustration of these businesses, which claim the central bank does not have the authority to stop them after they have obtained state banking charters.
Danenberg remains confident that the law is on his side, but he worries that he has become “caught in a political battle” as politicians in Washington, D.C., spar over crypto policy and as a conservative push in the courts to rein in the power of financial regulators has motivated progressives to doggedly defend the status quo, even if that means reinforcing the power of the big banks and a wildly profitable incumbent financial sector.
Danenberg, who was born in Belgium, trained as an electrical engineer but prides himself on being a self-taught expert in software coding and financial regulation. After graduating in 2012, he met Belgian central banker and currency trader Bernard Lietaer, who became his mentor. Lietaer, who died in 2019, had worked on the implementation of the European Currency Unit, the precursor to the euro.
One of Lietaer’s interests as an economist was how the global monetary system is a hindrance to prosperity in the developing world, and he advocated for the creation of parallel currency systems to work alongside official ones to stimulate economic activity in depressed areas.
Danenberg learned from Lietaer about the slow, expensive and risky nature of cross-border payments and the importance of the U.S. dollar in an increasingly global economy that lacks a common means of settling transactions.
“Where there is a problem, you have a business,” Danenberg said. This problem led him to come to the U.S. on an investor visa and to begin to build an application that he hopes will serve as a means for small and midsize enterprises to more easily trade across borders.
The PayServices app would leverage face- and voice-recognition technology and GPS data to identify and track its customers in order to comply with know-your-customer and anti-money-laundering regulations, enabling the bank to make sure that foreign account holders aren’t using the system to trade in illicit goods or otherwise launder money.
Danenberg’s initial strategy for building out the business has involved recruiting foreign governments in places like Africa, South America and Asia. He recently traveled to Ivory Coast to meet with government officials, who were eager to learn how PayServices might enable small producers of commodities like coffee, cocoa beans and palm oil to connect with U.S. manufacturers of end products.
“If I’m a small U.S. business who wants to import this stuff from Ivory Coast, there’s simply no way for me right now to send the money,” he said.
In 2017, another small financial startup, Reserve Trust, chartered in Colorado, was approved for a Fed master account by the Federal Reserve Bank of Kansas City, enabling the company to raise more than $30 million in venture financing.
Its business model was similar to that of PayServices: Offering U.S. dollar payment services to international businesses that had lost access to U.S. banks after they shed customers with unappealing risk-return profiles in the wake of the financial crisis.
At first, the Fed denied Reserve Trust’s initial application, but it reversed course less than a year later, after Sarah Bloom Raskin, then a exact veteran of the Obama-era Federal Reserve and Treasury Department, joined Reserve Trust’s board.
The episode became national news in 2022 after President Joe Biden nominated Raskin to serve as the Fed’s vice chair for supervision.
Republicans, led by Pat Toomey, who was then chair of the Senate Banking Committee, labeled the turn of events suspicious, demanding in confirmation hearings and in communications with the Fed to know whether Raskin had leaned on her former colleagues to get the master account approved.
Julie Hill, a scholar of financial regulation at the University of Alabama, said in an interview that the Reserve Trust episode illustrates the arbitrary nature of the approval process, one that she believes doesn’t follow the letter of the law.
The Kansas City Fed said that the reversal of its decision was the result of Colorado regulators “reinterpreting” state law, but Hill said this explanation is lacking.
Kenneth Bold, Colorado’s state banking commissioner, told Hill in a February 2022 letter that the Kansas City Fed “misrepresented” its interactions with the Colorado Division of Banking and that his agency doesn’t have the authority to “change, modify or reinterpret state laws.”
“None of it makes any sense,” said Hill. “Maybe there’s a good explanation, but Kansas City hasn’t offered it.”
Toomey, who served in the Senate until earlier this year, agrees, telling MarketWatch in an interview that despite Congress’s oversight powers, he was unable to learn the truth of whether there was any corrupt influence over the approval process for the Reserve Trust master account.
“They stonewalled us on that,” he said. “Clearly it was unusual.”
The Federal Reserve Board and the regional banks of Kansas City and San Francisco declined to comment, as did Raskin.
Even as the Reserve Trust scandal was unfolding, the Fed was in the process of developing a public framework for evaluating applications for master-account access from a rising number of “novel” charter types, which it finally implemented in August 2022, a few months after Biden withdrew Raskin’s nomination to the Fed board.
The guidelines are what Hill calls a “monument to the Federal Reserve’s claimed discretion over accounts and payments services.” They outline a tiered system for evaluating Fed master-account requests.
“The guidelines clarify that the Federal Reserve intends to subject requesting banks without deposit insurance to the regulatory equivalent of a proctology exam,” Hill wrote in a exact paper on the topic. “Except that proctology exams do not last for years.”’
Toomey was convinced, in part by the Reserve Trust episode, that the current Federal Reserve system — made up of private regional Fed banks that are owned by member banks — is an “archaic structure” and a “relic from a previous era” in need of reform.
One of his last acts as a lawmaker was to help shepherd a law through Congress that requires the Fed to publish a list of all the financial institutions with master accounts and those with pending applications, which it began doing in June.
“This whole list would be a very good starting point for Congress to have a hearing and ask the Fed a lot of questions about why some of these companies are on the list and why some aren’t and what the criteria is,” Toomey said.
For Danenberg, the publication of the list was further evidence that something was amiss.
“When you see that the Bank of Egypt has an account, or the Bank of Pakistan, you realize the Fed has no accountability,” he said.
The lack of oversight over the Fed’s decision making is a common feature of bank regulation more broadly, according to David Zaring, a law professor at the University of Pennsylvania.
“Banks labor under heavy, and in almost every important way, unchecked regulation,” he wrote in a June article in the Iowa Law Review. This situation, according to Zaring, challenges the “basic assumptions of American administrative law,” including the idea that transparency, regular judicial review and cost-benefit analyses all make for better regulations.
“The banking regulatory regime features none of these regulatory basics,” Zaring wrote.
The Federal Reserve, which after the financial crisis of 2008 became the nation’s most important banking regulator — in addition to its role as the federal government’s fiscal agent and implementer of monetary policy — is to a large degree unburdened by oversight.
Congress does not control the Fed’s budget, the White House does not vet Fed regulations like it does for other agencies, and the staggered 14-year terms of Fed governors and a tradition of central-bank independence mean even the president has limited influence.
What’s more, because regional Fed banks are private entities, federal courts have less power to check their decisions, and they are not subject to transparency laws like the Freedom of Information Act.
Zaring argues that the unique nature of bank regulation stems from the government’s interest in providing U.S. businesses with credit and from the ever-present danger that the banking system can go haywire as it did in 2008, “with consequences well beyond the investors and managers of a bank that fails.”
The basic agreement, then, is that banks submit themselves to the imperial powers of the Federal Reserve and other regulators, and in return they get access to Fed infrastructure like risk-free accounts and payment rails — as well as the implicit promise that they will be bailed out if things really go haywire.
This deal may be well and good for incumbent financial institutions, but the example of PayServices raises the question of who gets to decide which banks are dealt into this system of intense regulation and generous subsidies — and which banks are left out in the cold.
The Reserve Trust episode only exacerbated concerns that many lawmakers had been expressing over the Fed’s failure to grant master accounts to novel banks, like Four Corners Bank, a Colorado institution that was started in order to serve the needs of cannabis businesses after the state legalized recreational use in 2012.
National banks have long refused to serve cannabis businesses in states where the substance is legal to use, given that it remains illicit at the federal level, saying that banking services for those who traffic in marijuana would violate anti-money-laundering laws.
It’s the cryptocurrency industry, however, that some believe is driving the Fed’s increasing reluctance to offer master accounts to state-chartered institutions.
Caitlin Long, the founder and CEO of Custodia, a recently opened Wyoming depository institution that offers bitcoin BTCUSD, -0.53% and ether ETHUSD, -0.55% custody and dollar payment services, first applied for a Fed master account in 2020. The application was denied in January.
Long told MarketWatch that, like Danenberg, she felt her company was making progress with the Fed in its application and that she was “blindsided” by the denial of the account.
In its lawsuit against the Fed, Custodia describes the denial as a “coordinated maneuver orchestrated by the [Fed] Board in consultation with the White House,” in a political climate that had become increasingly anti-crypto following the failure of cryptocurrency exchange FTX.
Nic Carter, a general partner at the crypto-investment company Castle Island Adventures, believes that the federal government is broadly cracking down on the crypto industry through regulatory measures that he calls “Operation Choke Point 2.0,” referencing the Obama-era scandal over banking regulators’ moves against the payday-lending industry.
“There’s a distinct policy at the federal level to marginalize the crypto space and limit its access to the financial system,” Carter told MarketWatch, adding that companies in the industry struggle to get access to basic banking services, a trend that has only worsened since the failure of two banks associated with the crypto industry earlier this year: Silvergate and Signature Bank of New York.
The Biden administration’s turn against the crypto industry has been anything but subtle. As recently as last May, industry insiders were optimistic that a Biden executive order on digital assets that touted the “potential benefits of digital assets and their underlying technology” was a signal that the White House would take a balanced approach to crypto.
But since that time, the Treasury Department has sanctioned Tornado Cash, a decentralized finance, or DeFi, protocol that enables users to obfuscate transactions on the Ethereum blockchain, and in April, it published an exhaustive report on the threats DeFi poses to efforts to combat money laundering and funding of illicit activities.
In January, the Fed, in conjunction with the FDIC and the Office of the Comptroller of the Currency, issued a warning on the threat of crypto to the banking system, stating that they would be “carefully reviewing any proposals from banking organizations to engage in activities that involve crypto assets.”
Meanwhile, Democrats in Congress appear to have abandoned bipartisan efforts to write crypto-specific financial regulations as the Securities and Exchange Commission has brought enforcement actions against the world’s two largest crypto exchanges: Binance and Coinbase COIN, +3.85%.
Wyoming Sen. Cynthia Lummis, a Republican, told MarketWatch in a statement that Wyoming’s bank charter law fully complies with the Federal Reserve Act, and therefore it has no basis to deny Custodia a master account.
“By repeatedly denying master accounts to institutions that custody crypto assets, the Federal Reserve is failing in its responsibility to ensure crypto assets are properly regulated and the risks are managed,” she said. “These decisions are more about politics than bank regulation.”
Danenberg worries that PayServices has gotten caught in the crossfire in the battle over crypto policy, but also that federal regulators’ negative attitude toward crypto is illustrative of broader skepticism of financial innovation.
“The Fed has kind of started to awaken to the fact that there is new stuff coming to market that makes the old model obsolete,” he said, adding that the incumbent banks that own shares in the regional Fed banks have little incentive to welcome new models for providing financial services.
Other noncrypto-banking companies are also fighting the Fed in the courts, with the latest suit filed in July by the Puerto Rican bank whose master account was revoked by the Federal Reserve Bank of New York over concerns about compliance with U.S. sanctions and anti-money-laundering laws.
Dozens more are waiting for their applications to be reviewed, with little information as to when or why they will be accepted or denied.
Hill, the scholar at the University of Alabama, believes that the law is on the side of those banks fighting for a master account and that the Fed does not have the discretion to deny eligible banks access to accounts and payment services.
At the very least, she said, the Fed must be more transparent about why it’s accepting some applications and denying others.
“Take the Custodia example,” she said. “We can guess that the Fed doesn’t want to do it because it’s crypto-related, but we don’t really know because they won’t say.”
“If you look at the list of (New College majors), there’s one outlier, and it’s gender studies. … It’s not within the liberal arts, and it’s more of an ideological movement than an academic discipline.” This is how Matthew Spalding, a member of the New College board of trustees, justified his vote earlier this month to begin the process of eliminating the gender studies area of concentration, the equivalent to majors at other colleges.
But how do these and further statements made by Spalding and Christopher Rufo — another recently appointed board member — stand up to a critical examination, of the sort conducted by the original proponents of the “liberal arts”?
From the 13th century, a “liberally” or “freely” educated student was expected to master seven specific fields of study, with a fundamental grounding in the “trivium” — grammar, logic and rhetoric — extended to further development in the “quadrivium” — arithmetic, geometry, astronomy and music. Training in the trivium would render a student proficient in words and the language arts, before he could move on to investigate nature through numbers, since each of the elements of the quadrivium, including music, were expressed through numerals.
Therefore, when someone describes an area of concentration as an “outlier,” he should be prepared to back up that assertion by using logical reasoning and comparative data. On its webpages, New College currently lists 51 areas of concentration, and it also invites a prospective student to “pursue a joint concentration in two fields, minor in a secondary concentration or design your own area of concentration.”
The website of Hillsdale College — where Spalding is also Kirby Professor in Constitutional Government and dean of the graduate school of government, among other titles — lists 47 majors and minors. Among the majors that are available in this “traditional or classical” liberal arts college are accounting, entrepreneurship, exercise science, financial management, general business, marketing, physical education, sport management and sport psychology. None of these majors, worthy as they certainly are, is listed on the New College page.
A modern liberal arts curriculum should not, of course, be restricted to the original “artes liberales,” but my own discipline (history) did not become a professionalized academic subject until the 1880s and even the term “major” did not appear in university catalogs before 1877. However, if one wishes to determine what does, and does not, constitute today’s “liberal arts,” I believe that the ideal organization to study is Phi Beta Kappa.
Founded by five students at the College of William & Mary in December 1776, the “nation’s most prestigious honor society” is, according to its website, “grounded in liberal — as in the Latin word for ‘free’ — arts and sciences learning and freedom of inquiry.” As a proud initiate in Phi Beta Kappa (Ohio University, 1991), donor to the organization and attendee at the last triennial meeting in 2021, I am delighted that Phi Beta Kappa has not only established a chapter at my university (the University of South Florida) but has also taken strong stances to protect academic freedom, specifically in Florida and especially in this year.
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While New College has not yet been invited to establish a chapter of Phi Beta Kappa, it is striking that neither has Spalding’s Hillsdale College — an explicitly liberal arts institution that was founded in 1844. According to Phi Beta Kappa’s online chapter directory, the state of Michigan, where Hillsdale is based, presently contains eight chapters at four private colleges and four public universities.
A quick search of the four private colleges’ websites reveals that each one offers a major, a minor, or both in gender studies. In alphabetical order, these are Albion College (founded in 1835), with a major in women’s, gender and sexuality studies; Alma College (founded in 1886), with a minor in women’s and gender studies; Hope College (a “private Christian liberal arts college” chartered in 1866), with a major in women’s and gender studies; and Kalamazoo College (founded by Baptists, like Hillsdale, in 1833), with its women, gender and sexuality major.
If the vaunted plan for New College’s future is to turn it into the “Hillsdale of the South,” in part by stripping it of its gender studies major, the prospect of achieving recognition by Phi Beta Kappa would seem to be receding further into the distance.
In addition to abusing logical and comparative reasoning, Spalding has also made a mockery of the arts of grammar and rhetoric. In the board meeting, he asserted that the gender studies program at New College is “a mishmosh of things — if you read the website, I have no idea what it’s about, it’s very confused.” (For what it’s worth, the word, from Middle English, is more often pronounced “mishmash.”) I would invite everyone to read this website, https://www.ncf.edu/programs/gender-studies/, which I find a model of clarity, especially in its lists of helpful online resources (including a dedicated Twitter page), “potential career pathways,” “recent courses” and “recent theses.”
The recounting of exact thesis titles also refutes Spalding’s claim that “gender studies does not grow out of the humanities … or of the sciences.” Of the nine thesis titles listed, six are clearly outgrowths of humanities or fine art disciplines, including history, music, art, dance, theater, and Spanish language and literature, and the other three derive from medicine, sociology and psychology.
And, if one wishes to see a true “mishmosh” of “confused” language, look no further than the essay Christopher Rufo published to his Substack, on the evening after the board vote, entitled “The Arc of Reform.” In the penultimate paragraph, Rufo writes, “The mission of New College of Florida is to restore classical liberal education and to revive the pursuit of transcendent truth — a mission ultimately incompatible with the disciplines of gender studies and queer theory, which are explicitly opposed to the classical conceptions of the true, the good and the beautiful. These postmodern, anti-normative lines of thought may be welcome at other universities, but they are not a requirement for a university as such.”
As a trained classicist, I think I recognize some glimmer of the ancient Greek “kalokagathos,” “the good and the beautiful,” but one would have to be a regular reader of Rufo’s words to strain out the kernels of “truth” he is pouring out here. It is ironic that the person who has accused gender studies of being “ideological activism” is a self-avowed activist obviously motivated by ideology. The source of this ideology? Perhaps it is Viktor Orbán, whose Danube Institute hosted Rufo in Budapest as a visiting fellow this March and April. Orbán, who has been in power since 2010, regularly employs antisemitic, anti-immigrant and anti-LGBTQ+ rhetoric and is widely considered one of the most serious global threats to democracy. Should someone who has studied Orbán’s techniques so recently in his capital city be entrusted with overseeing the curriculum of any institution, especially one devoted to the public good?
Jonathan S. Perry is an associate professor of history at the Sarasota-Manatee Campus of the University of South Florida, and he also appeared as a contestant on the television program “Jeopardy!” in February 2023.
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