Dodd-Frank News Center

OCC issues revised dataset for use in 2019 stress tests

This story appeared in Bank Digest.

The Office of the Comptroller of the Currency has released a revised dataset for use by covered institutions in the upcoming 2019 stress tests. According to the agency's release, the previously released dataset contained an incorrect value for the mortgage rate in the fourth quarter of 2018. The updated dataset contains the corrected data point of 4.8 percent rather than the previously published 4.6 percent mortgage rate for that quarter.

Democrats write to CFPB opposing changes to payday loan rule

This story appeared in Bank Digest.                                   

Senators Jeff Merkley (D-Ore), Dick Durbin (D-Ill), and Sherrod Brown (D-Ohio) have led a group of 47 senators in writing to Consumer Financial Protection Bureau Director Kathleen Kraninger to oppose the CFPB's proposal to revise its payday loan rule to eliminate underwriting requirements.

In their letter, the senators said, "Currently under the Payday Rule, lenders will be required to verify a borrower's income, debts, and other spending in order to assess a borrower's ability to remain current and repay credit, and provide an affordable repayment plan for borrowers who take out more than three loans in succession."

They went on to say, "Repealing this rule provides a green light to the payday lending industry to prey on vulnerable American consumers. In drafting these devastating changes to the Payday Rule, the CFPB is ignoring one of the most fundamental principles of consumer finance--an individual should not be offered a predatory loan that they cannot pay back." The senators asked for answers to several questions regarding the effect of the proposed changes.

OFR establishes data collection for centrally cleared funding transactions

This story appeared in Bank Digest.                                   

The Office of Financial Research has adopted a final rule to establish a data collection covering centrally cleared funding transactions in the United States repurchase agreement (repo) market. The rule will become effective 60 days after publication in the Federal Register.

According to the OFR's press release, the daily collection will enhance the ability of the FSOC to identify and monitor potential risks to U.S. financial stability by closing the data gap related to centrally cleared repo transactions. The collection will also support the calculation of certain reference rates, particularly alternatives to the U.S. dollar London Interbank Offered Rate (LIBOR).

 

Perdue sponsors bill to subject CFPB to congressional appropriations process

This story appeared in Bank Digest.                                   

Senator David Perdue (R-Ga) has led 17 other Republican senators in sponsoring the CFPB Accountability Act of 2019, which would subject the Consumer Financial Protection Bureau to the annual congressional appropriations process to provide greater oversight of the Bureau. According to Perdue, the Dodd-Frank Act "gave the CFPB unprecedented power with no Congressional oversight whatsoever." He added, "The American people deserve a closer look at the CFPB to understand how its actions will impact consumers."

Financial Research Advisory Committee to hold open meeting

This story appeared in Bank Digest.                                   

The Financial Research Advisory Committee for the Office of Financial Research will hold an open meeting on Feb. 28, 2019, beginning at 9:00 a.m. Eastern Standard Time, in Washington, D.C. Those wishing to attend the meeting must contact the OFR by 5:00 p.m. EST on Feb. 14, 2019.

According to the OFR's notice, topics to be discussed at the meeting include presentation of reports to the central counterpart clearing, presentation of bond market liquidity, and the presentation of regulatory reporting charge. In addition, new charges will also be presented, according to the OFR.

New protections for servicemembers highlighted in CFPB blog post

This story appeared in Bank Digest.                                   

A Consumer Financial Protection Bureau blog post discusses new legal protections for servicemembers and veterans and when they go into effect. Some took effect last year.

Specifically, the authors discuss: (1) new requirements for Department of Veterans Affairs loan refinancing; (2) foreclosure protections for active-duty servicemembers and those recently separated from active duty; (3) greater credit reporting protections for veterans on certain medical debts; and (4) free electronic credit monitoring for active duty servicemembers.

CFPB moves to eliminate payday lenders' underwriting obligations

This story appeared in Bank Digest.                                   

The Consumer Financial Protection Bureau is proposing amendments to its 2017 final rule governing "Payday, Vehicle Title, and Certain High-Cost Installment Loans" that would allow lenders to extend short-term, high-cost loans to consumers without needing to satisfy regulatory underwriting requirements. In addition to proposing to eliminate the underwriting requirements, the Bureau is proposing to extend the Aug. 19, 2019, compliance date of the rule's mandatory underwriting provisions until Nov. 19, 2020, which would enable the CFPB to eliminate the requirements before they take effect.

Senate Banking Committee Ranking Member Sherrod Brown (D-Ohio) issued a statement saying, "Eliminating these common sense protections will result in millions of hardworking families trapped in a cycle of debt and poverty." Similarly, House Financial Services Committee Chairwoman Maxine Waters (D-Calif) said she was "deeply troubled by the Consumer Bureau's proposal to gut a much-needed rule that would have reined in payday lenders and ensure consumers can afford to pay off their loans."

But House Financial Services Committee Ranking Member Patrick McHenry (R-NC) said the Bureau's "announcement on an updated payday lending rule and extended comment period will allow all stakeholders another chance to weigh in and establish new underwriting criteria. Most importantly, it will give consumers the opportunity to make their own decisions on credit availability needs for themselves and their families."

Democrats introduce Home Loan Quality Transparency Act

This story appeared in Bank Digest.                                     

Several Democrat senators have introduced the Home Loan Quality Transparency Act to reinstate Dodd-Frank Act reporting requirements repealed last year. According to a press release issued by Sen. Catherine Cortez Masto (D-Nev), one of the bill's sponsors, the legislation would restore the requirement that loan quality criteria be made publicly available by any lender issuing a significant number of mortgages and home equity lines of credit each year. Last year's law significantly raised the reporting requirement exemptions, but the current bill would restore them to their prior levels.

The bill is intended to give regulators and advocates the information they need to hold banks accountable for discriminatory or unfair lending practices, the release said. Representative Nydia M. Velázquez (D-NY) has introduced a companion bill (H.R. 963) in the House of Representatives.

Fed finalizes changes to stress testing program

This story appeared in Bank Digest.                                     

The Federal Reserve Board has finalized a set of changes intended to increase the transparency of its stress testing program for the nation's largest and most complex banks. The Fed said the changes are intended to improve public understanding of the program while maintaining its ability to independently test large banks' resilience.

According to the Fed's press release, the first change, which will begin for the 2019 stress test cycle and expand in subsequent years, will provide significantly more information about the stress testing models used in the Fed's annual Comprehensive Capital Analysis and Review. In addition, the Fed finalized a stress testing policy statement and modified its framework for the design of the annual hypothetical economic scenarios. The policy statement will take effect 30 days after its publication in the Federal Register.

CFPB proposes reinstating, revising consumer research information collection

This story appeared in Bank Digest.

The CFPB is proposing to reinstate, with change, a previously approved information collection entitled “Generic Information Collection Plan for Studies of Consumers Using Controlled Trials in Field and Economic Laboratory Settings.” Under this generic information collection plan, the Bureau intends to collect data through controlled trials in field and economic laboratory settings; and use this research for developmental and informative purposes to increase its understanding of consumer credit markets and household financial decision-making. In consultation with the Office of Management and Budget, the CFPB is proposing to modify this generic information collection plan to provide for public notice and opportunity to comment to the OMB for each request submitted under this generic plan. Written comments on this proposal must be received by April 8, 2019.