Dodd-Frank News Center

Wolters Kluwer Law & Business Launches New Banking & Finance Law Daily

Wolters Kluwer Law & Business has launched a new Banking and Finance Daily—a daily news service created by attorneys for attorneys—providing same-day coverage of breaking news and developments for federal and state banking and finance law, including the latest rulemaking activity, regulatory changes, litigation, and a wealth of other related activities.

Banking & Finance Law Daily subscribers get special copyright permissions to forward information to colleagues or clients, the option to customize the daily email by topic and/or jurisdiction, the ability to receive breaking news email alerts, time-saving mobile apps for iPhone®, iPad®, BlackBerry®, or Android®, access to all links to cases and other referenced primary source content without being prompted for user name and password, and a searchable archival database.

Uniform State Test Guidance Issued by CFPB

This story appeared in Bank Digest.

To be a qualified written test under the Secure and Fair Enforcement for Mortgage Licensing Act, the test developed by the Nationwide Mortgage Licensing System and Registry (NMLSR) must include questions covering all the required areas, including state laws and regulations, according to guidance issued by the CFPB. The guidance responds to questions about whether states may use the Uniform State Test developed by the NMLSR as part of a qualified written test under the SAFE Act.

According to the bureau, this requirement may be met through the use of a compliant Uniform State Test, or a separate test for each state covering the particular laws and regulations of that state, and a National Test Component developed by the NMLSR.  The CFPB notes that presenting test questions through a Uniform State Test rather than a separate state test component would not preclude the test from being a qualified test under the SAFE Act, so long as all the requirements for a qualified test are satisfied.  

Questions Continue Regarding Recess Appointments

This story appeared in Bank Digest.

A divided panel of the U.S. Court of Appeals for the Third Circuit has ruled in NLRB v. New Vista Nursing and Rehabilitation that a National Labor Relations Board panel lacked the requisite number of members to exercise the NLRB's authority because one panel member was invalidly appointed during an intrasession break. This latest ruling, along with the Jan. 25, 2013, decision by the U.S. Court of Appeals for the District of Columbia in Noel Canning v. National Labor Relations Board, as well as the Obama Administration's petition for certiorari with the Supreme Court seeking reversal of the D.C. court's decision, further clouds the January 2012 recess appointment of Richard Cordray as Director of the Consumer Financial Protection Bureau and the actions taken by the bureau during Cordray's recess appointment.

CFPB Issues Final List of Counties Exempted from Escrow Requirements

This story appeared in Bank Digest.

A Consumer Financial Protection Bureau blog post notes that on June 1, 2013, the CFPB's escrow account amendments to Reg Z—Truth in Lending (12 CFR 1026) will go into effect, which require certain creditors to create escrow accounts for a minimum of five years for higher-priced mortgage loans. Some small creditors that operate predominately in rural or underserved areas are exempt from the escrow account requirements if they intend to hold the loans in their portfolios rather than sell them. The bureau has finalized a list of rural and underserved counties for 2013. Rural counties are defined using the USDA Economic Research Service's urban influence codes, and underserved counties are defined by reference to data collected under the Home Mortgage Disclosure Act, according to the bureau. The CFPB has also published a table of applicable citations and corresponding provisions for rural and underserved counties.

Deputy Comptroller Discusses Basel’s New Emphasis on Supervision and Implementation

This story appeared in Bank Digest.

Deputy Controller Charles Taylor spoke at the 2013 Risk & Regulation USA Conference in New York City about two aspects of the Basel Committee’s Supervision and Implementation Group, which he chairs: the work on enhancing international practices of banking supervision and the progress that is being made to implement the Basel standards internationally.

Hearing Examines Relationship Between Dodd-Frank and Taxpayer-Funded Bailouts

This story appeared in Bank Digest.

At a House Oversight and Investigations Subcommittee hearing on “Too Big to Fail,” John Taylor, professor at Stanford University and a senior fellow in economics at the Hoover Institution, noted that, rather than end bailouts for “Too Big to Fail” firms, large financial institutions under Dodd-Frank “still seem to be enjoying a huge subsidy on their borrowing costs due to market expectations of bailouts.”

Work Remains to Be Done to Achieve Orderly Cross-Border Resolution of Failed Systemic Financial Firms

This story appeared in Bank Digest.

Michael Gibson, Director, Division of Banking Supervision and Regulation, Federal Reserve Board, in testimony before a Senate committee on challenges to achieving an orderly cross-border resolution of a failed systemic financial firm, said that “the financial regulatory architecture is stronger today than it was in the years leading up to the crisis, but considerable work remains to complete implementation of the Dodd-Frank Act and the post-crisis global financial reform program.” He said that a “key prong” of that program is making sure that government authorities in the United States and around the world “can effect an orderly resolution of a systemically important, internationally active financial firm.”

FTC Enforcement Actions Reported to CFPB

This story appeared in Bank Digest.

The Federal Trade Commission has released its second annual letter to the Consumer Financial Protection Bureau describing the commission's enforcement actions related to a number of consumer compliance regulations. The letter also discusses the Dodd-Frank Act and the memorandum of understanding between the FTC and CFPB that outlines a framework for coordinating certain law enforcement, rulemaking, and other activities.

The FTC's primary focus in the financial services area is bringing law enforcement actions against those who violate statutes and regulations. In addition to its law enforcement activities, the FTC engages in research and policy development related to the types of financial services these statutes and regulations cover. The commission also provides the public with business and consumer education materials intended to promote business compliance with laws and help consumers protect themselves from noncompliant businesses.

Warren Seeks to Hold Big Banks Accountable

This story appeared in Bank Digest.

"If large financial institutions can break the law and accumulate millions in profits and, if they get caught, settle by paying out of those profits, they do not have much incentive to follow the law," stated Sen. Elizabeth Warren (D-Mass.) in a letter to Federal Reserve Board Chairman Ben Bernanke, Attorney General Eric Holder, and Securities and Exchange Commission Chairman Mary Jo White. Warren asked the regulators for disclosure of any research and analysis done on the costs to the public of settling an enforcement action without requiring an admission of guilt. In her letter, Warren stressed the importance of strong regulatory enforcement to make sure big banks follow the law. She argued that, "if a regulator reveals itself to be unwilling to take large financial institutions all the way to trial—either because it is too timid or because it lacks resources—the regulator has a lot less leverage in settlement negotiations and will be forced to settle on terms that are much more favorable to the wrongdoer."

Deadline for Midyear Bank Stress Tests Announced

This story appeared in Bank Digest.

The Federal Reserve Board said 18 large U.S. bank holding companies must submit the results of their company-run midyear stress tests to the central bank by July 5, 2013, marking the first time that midyear stress tests have been conducted. A summary of the test results must be publicly disclosed in the period from Sept. 15-20, 2013. According to the Fed, the midyear tests "mark another important step" in its work toward ensuring that large financial firms" have robust capital planning processes and adequate capital so that they can continue to lend to households and businesses even during adverse economic and financial circumstances."

OCC Updates on Independent Foreclosure Review Payments

This story appeared in Bank Digest.

According to an Office of the Comptroller of the Currency release, more than 2.2 million people have cashed or deposited more than $2 billion in checks related to the Independent Foreclosure Review Payment Agreement through May 9, 2013. To date, more than 3.9 million checks, totaling more than $3.4 billion, have been sent to eligible borrowers. The agency once again reminds institutions to help prevent fraud by requiring positive identification, asserting that institutions should follow the instructions provided on the back of the check to validate authenticity.