Dodd-Frank News Center

CFPB chooses organizations for 2019 Your Money, Your Goals cohort

This story appeared in Bank Digest.                                   

The Consumer Financial Protection Bureau has selected 40 organizations to join the 2019 Your Money, Your Goals cohort, which will entitle them to "receive training and technical assistance on how to use the Your Money, Your Goals tools to help them discuss money topics with the people they serve in their communities," according to a Bureau blog post. The author said, "Your Money, Your Goals is a comprehensive suite of resources and training geared to help non-profit and government agencies integrate financial empowerment into their existing service models."

The members of the 2019 cohort include "federal, state, and local government agencies; faith-based and social service organizations; organizations serving people with disabilities, native communities and those transitioning from prison; and financial providers."

CFPB to hold home buying email boot camp

CFPB to hold home buying email boot camp

This story appeared in Bank Digest.                                    

The Consumer Financial Protection Bureau is inviting consumers to sign up for its two-week Get Homebuyer Ready email boot camp for those considering buying a home. According to a Bureau blog post, the course takes consumers step-by-step through the entire home buying process and equips them with helpful tools and resources. The post includes a link where consumers can sign up for the course.

Banking Committee holds hearing on CFPB's report to Congress

This story appeared in Bank Digest.                                     

The Senate Banking Committee held a hearing entitled "The Consumer Financial Protection Bureau's Semi-Annual Report to Congress" on March 12, 2019.

The committee received the testimony of Consumer Financial Protection Bureau Director Kathy Kraninger on the Bureau's most recent semiannual report, which "outlines the CFPB's significant work between April 2018 and September 2018, including rulemakings and supervisory and regulatory activities," according to a prepared opening statement by Committee Chairman Mike Crapo (R-Idaho). Crapo said the report "also provides insight into what the CFPB plans to undertake in the coming work period."

CFPB blog post highlights new financial protections for young people

This story appeared in Bank Digest.                                   

A Consumer Financial Protection Bureau blog post highlights a federal law, effective Sept. 21, 2018, that "lets parents and child welfare representatives of people under 16, as well as legal guardians, request a security freeze, also called a credit freeze, on their behalf." The authors said placing such a security freeze, which is free, can help protect young people from identity theft and fraud by restricting access to their credit reports and thus making it harder for identity thieves to open new accounts using their personal information. The post also discusses procedures to request a security freeze for young people in foster care.

 

Brown comments on regulatory decisions

This story appeared in Bank Digest.                                   

Senate Banking Committee Ranking Member Sherrod Brown (D-Ohio) has issued statements on several recent regulatory decisions involving: (1) the countercyclical capital buffer, which requires big banks to set aside extra capital to absorb potential loan losses in the event of an economic downturn; (2) a proposed rewrite of the Volcker Rule; and (3) proposed interpretive guidance from the Financial Stability Oversight Council that would change the process for designating nonbank financial companies as systemically important financial institutions.

Regarding the Federal Reserve Board's decision to keep the countercyclical capital buffer at its current level of 0 percent, Brown said he was disappointed with the decision and added, "Banks are doing well, but there are certainly growing risks in the economy. Now is exactly when the buffer should be used to make sure that the banks have enough capital for those eventual bad times."

Commenting on a potential revision of the proposed Volcker Rule rewrite, Brown said it was "no surprise that when Wall Street banks complained that the proposed rewrite of the Volcker Rule wasn't weak enough, Trump regulators went to work watering it down further."

Finally, Brown said the FSOC's new proposed guidance "ignores the damage done to our financial system during the last crisis and the risks still posed by shadow banks and other financial institutions. FSOC is no longer protecting financial stability or taxpayers."

Fed to limit CCAR 'qualitative objection'; CCAR instructions released

This story appeared in Bank Digest.                                   

The Federal Reserve Board has issued a final rule that will limit the use of the "qualitative objection" in its Comprehensive Capital Analysis and Review exercise, effective for the 2019 cycle. The Fed has also released the instructions for this year's CCAR exercise.

The Fed said that for the largest and most complex firms, CCAR includes both a quantitative evaluation of a firm's capital adequacy under stress and a qualitative evaluation of its abilities to determine its capital needs on a forward-looking basis. As applicable, a firm must pass both the quantitative and qualitative evaluation or the Fed may object and restrict the firm's shareholder distributions.

 According to the Fed, the qualitative objection has been eliminated for most firms due to improvements in capital planning made by the largest firms.

Democrats urge CFPB to include compliance with Military Lending Act in examinations

This story appeared in Bank Digest.                                     

The entire Senate Democratic Caucus has sent a letter to Consumer Financial Protection Bureau Director Kathleen Kraninger requesting that she "fulfill the Consumer Financial Protection Bureau's (CFPB) mission by including compliance with the Military Lending Act (MLA) in the Bureau's routine lender examinations, as was its practice prior to November 2018."

According to a press release by Sen. Jack Reed (D-RI), one of letter's leaders, the MLA was passed in 2006 with bipartisan support to help safeguard active-duty military members and their families from financial fraud, predatory loans, and credit gouging, but the CFPB has discontinued the supervision of regulated entities for compliance with the MLA.

In their letter, the senators said, "The CFPB's existing statutory authorities are more than sufficient to justify including MLA compliance in routine examinations, and to our knowledge, the CFPB's authority in this regard has never been challenged." The senators also asked Kraninger to provide a justification for the Bureau's current practice of not examining for compliance with the MLA.

 

CFPB issues ANPR on residential Property Assessed Clean Energy financing

This story appeared in Bank Digest.                                   

The Consumer Financial Protection Bureau has issued an Advance Notice of Proposed Rulemaking to solicit information relating to residential Property Assessed Clean Energy (PACE) financing as part of the Bureau's efforts to implement requirements of the Economic Growth, Regulatory Relief, and Consumer Protection Act. EGRRCPA amended the Truth in Lending Act to mandate that the CFPB prescribe certain regulations relating to PACE financing. Comments on the ANPR are due 60 days after its publication in the Federal Register.

A press release issued by Sen. Tom Cotton (R-Ark) said PACE loans are a financing program that provides homeowners with solar panels or other housing improvements in exchange for a lien on the home and increased property tax payments for up to 20 years. In a statement, Cotton said, "Predatory lenders have tricked seniors and other vulnerable citizens into taking out high-interest loans for green-energy appliances using their homes as collateral."

He added, "Soon this predatory lending scam will come to an end thanks to my Protecting Americans from Credit Exploitation provision, which passed last year. Today the Consumer Financial Protection Bureau took steps to implement this provision to protect consumers from predatory green-energy loans."

CFPB report shows increase in VA mortgages by first-time homebuying servicemembers

This story appeared in Bank Digest.                                   

A CFPB report shows an increase in the use of Department of Veterans Affairs mortgages by first-time homebuying servicemembers and a decrease in the use of conventional mortgages among servicemembers and non-servicemembers. The report, "Mortgages to First-Time Homebuying Servicemembers," which is the Bureau's latest quarterly consumer credit trends report, also shows that the median amount on servicemember first-time homebuyer VA loans increased.

 In addition, early delinquency rates among nonprime borrowers fell after 2009, with early delinquency rates among first-time homebuying servicemembers differing between active duty and veteran borrowers.

A related CFPB blog post says that the share of first-time homebuying servicemembers using VA mortgages dramatically increased, from 30 percent before 2007 to 63 percent in 2009, with the increase reaching 78 percent by 2016. The increase in the VA home loan share was similar across servicemembers with prime or nonprime credit scores.

Fed issues guidance on new large financial institution rating system

This story appeared in Bank Digest.

The Federal Reserve Board has issued guidance on the new rating system for the supervision of large financial institutions (LFIs). According to the Fed, this "LFI rating system" would replace the current bank holding company rating system (referred to as the "RFI rating system") for these firms.

The LFI rating system supports the Fed's supervisory program for all LFIs, including the largest firms that pose the greatest risk to U.S. financial stability, which are supervised under the authority of the Large Institution Supervision Coordinating Committee (LISCC).

The Fed will assign initial LFI ratings to firms in the LISCC portfolio in early 2019, and for all other firms subject to the LFI rating system, the Fed will assign initial ratings in early 2020.