Dodd-Frank News Center

CFPB and FHFA release dataset on borrowers' mortgage experiences

This story appeared in Bank Digest.                                   

The Consumer Financial Protection Bureau and Federal Housing Finance Agency have released for public use a new loan-level dataset collected through the National Survey of Mortgage Originations that provides insights into borrowers' experiences in getting a residential mortgage. According to the CFPB's press release, the NSMO is a component of the National Mortgage Database, launched by the Bureau and FHFA in 2012, which is the first comprehensive repository of detailed mortgage loan information designed to support policymaking and research efforts and to help regulators better understand emerging mortgage and housing market trends. 

According to FHFA Deputy Director Sandra Thompson, "The goal of the survey is to obtain information to help improve lending practices and the mortgage process for future borrowers." CFPB Acting Director Mick Mulvaney said the data collected through the survey "will allow greater transparency, accountability, and effectiveness around borrowers' mortgage experiences."

OIG issues audit of CFPB's information security program

This story appeared in Bank Digest.                                   

The Office of Inspector General for the Consumer Financial Protection Bureau and the Federal Reserve Board has issued an audit of the Bureau's information security program, as required by the Federal Information Security Modernization Act of 2014. The OIG evaluated the program's maturity level (from a possible low of 1 to a possible high of 5) across several areas and concluded that the program is operating at level 3 (consistently implemented), with the Bureau performing several activities indicative of a higher maturity level. 

According to the report, the CFPB also has opportunities to mature its program in FISMA domains across all five Cybersecurity Framework security functions--identify, protect, detect, respond, and recover--to ensure that its program is effective. The OIG made four recommendations to strengthen the Bureau's information security program in the areas of configuration management, identity and access management, and data protection and privacy.

Fed finalizes new supervisory rating system for large financial institutions

This story appeared in Bank Digest.                                   

The Federal Reserve Board has finalized a new supervisory rating system for large financial institutions that the agency said is aligned with the core areas most important to supporting a large firm's safety and soundness and U.S. financial stability. According to the Fed's press release, the new rating system will apply to all domestic bank holding companies and non-insurance, non-commercial savings and loan holding companies with $100 billion or more in total consolidated assets, which is a change from the $50 billion threshold originally proposed. Such institutions with less than $100 billion in total consolidated assets will be covered by the Fed's existing rating system, the release said. 

The new rating system will also apply to U.S. intermediate holding companies of foreign banking organizations with $50 billion or more in total consolidated assets, as proposed. According to the final rule, which is effective Feb. 1, 2019, the Fed will assign initial ratings under the new rating system in 2019 for bank holding companies and U.S. intermediate holding companies subject to the Large Institution Supervision Coordinating Committee framework and in 2020 for all other large financial institutions. 

In a separate notice, the Fed said it would apply its existing supervisory rating system for bank holding companies to savings and loan holding companies that are depository in nature and have $100 billion or more in total consolidated assets, but only until the Fed applies the new rating system for large financial institutions to them.

Brown and Luetkemeyer differ on Fed proposals to revise prudential standards framework

This story appeared in Bank Digest.                                     

Senate Banking Committee Ranking Member Sherrod Brown (D-Ohio) and Rep. Blaine Luetkemeyer (R-Mo) have issued contrasting statements regarding recent proposals by the Federal Reserve Board to establish a revised framework for applying prudential standards to large U.S. banking organizations based on risk, consistent with Section 401 of the Economic Growth, Regulatory Relief, and Consumer Protection Act. 

One proposal would tailor the application of prudential standards to U.S. bank holding companies and apply enhanced standards to certain large savings and loan holding companies. A second proposal--which would be issued jointly with the Office of the Comptroller of the Currency and Federal Deposit Insurance Corporation--would tailor the application of the agencies' capital and liquidity rules. 

According to Brown, "This Administration and Congress continue to fail hardworking Americans by weakening protections that guard taxpayers from big bank risk." But Luetkemeyer said, "It is refreshing to see regulators finally propose a more reasonable and responsible supervisory framework."

Fed proposals would align prudential standards with risk profiles

This story appeared in Bank Digest.                                   

The Federal Reserve Board has published two proposals to establish a revised framework for applying prudential standards to large U.S. banking organizations based on risk, consistent with Section 401 of the Economic Growth, Regulatory Relief, and Consumer Protection Act. Comments on both proposals, which were announced at the Fed's Oct. 30, 2018, open meeting, must be received by Jan. 22, 2019. 

The first notice--Prudential standards for large bank holding companies and savings and loan holding companies--is a Fed-only proposal that would tailor the application of prudential standards to U.S. bank holding companies and apply enhanced standards to certain large savings and loan holding companies. The second notice--Proposed changes to applicability thresholds for regulatory capital and liquidity requirements--which would be issued jointly with the Office of the Comptroller of the Currency and Federal Deposit Insurance Corporation, is a proposal to tailor the application of the agencies' capital and liquidity rules. 

The proposals seek to more closely align the regulatory requirements that apply to large banking organizations with their risk profiles. The proposed framework would not apply to the U.S. operations of foreign banking organizations.

Agencies propose alternative method for calculating derivative exposures

This story appeared in Bank Digest.                                     

The Federal Deposit Insurance Corporation, Federal Reserve Board, and Office of the Comptroller of the Currency have issued a proposed update to their standards for how firms measure counterparty credit risk posed by derivative contracts under the agencies' regulatory capital rules. According to the joint press release, the proposed changes are designed to better reflect the current derivatives market and incorporate risks observed during the 2007-2008 financial crisis. Comments on the proposed rule must be submitted 60 days after publication in the Federal Register. 

The proposal would provide the "standardized approach for measuring counterparty credit risk," also known as "SA-CCR," as an alternative approach to the agencies' current exposure methodology for calculating derivative exposure under regulatory capital rules. The agencies believe that SA-CCR better reflects the current derivatives market and would provide important improvements to risk sensitivity, resulting in more appropriate capital requirements for derivative contracts exposure. Banking organizations with $250 billion or more in total consolidated assets or $10 billion or more in on-balance sheet foreign exposure would be required to use SA-CCR to calculate both standardized total risk-weighted assets and the supplementary leverage ratio.

OCC proposes revising 'stress test reporting template' information collection

This story appeared in Bank Digest.                                   

The Office of the Comptroller of the Currency is proposing to revise a currently approved information collection entitled "Company-Run Annual Stress Test Reporting Template and Documentation for Covered Institutions with Total Consolidated Assets of $100 Billion or More under the Dodd-Frank Wall Street Reform and Consumer Protection Act." The OCC is proposing to revise its reporting requirements to mirror the Federal Reserve Board's proposed revisions to its Comprehensive Capital Analysis and Review reporting form FR Y-14A for covered institutions with total consolidated assets of $100 billion or more. 

The OCC is also proposing to remove or modify certain items on the OCC supplemental schedule, which collects additional information not included in the FR Y-14A. Comments on the proposal must be received by Dec. 31, 2018.

 

FDIC requests renewal of 'Resolution Plans' information collection

This story appeared in Bank Digest.                                   

The Federal Deposit Insurance Corporation is proposing to renew an existing information collection entitled "Resolution Plans Required for Insured Depository Institutions With $50 Billion or More in Total Assets." The collection is related to the requirement that an insured depository institution with $50 billion or more in total assets submit periodically to the FDIC a contingent plan for the resolution of the institution in the event of its failure. 

On July 30, 2018, the FDIC requested comment for 60 days on the proposal and is now giving notice of its plan to submit to the Office of Management and Budget a request to approve the renewal of the collection. Comments on the current notice must be submitted by Nov. 28, 2018.

CFPB settles with payday lender over debt collection practices

This story appeared in Bank Digest.                                   

A payday lender has agreed to pay a $200,000 penalty and $32,000 in restitution to settle Consumer Financial Protection Bureau charges arising from the company's methods of collecting unpaid loans. According to the Bureau, Cash Express, LLC, sent consumers dunning letters that misrepresented its collection methods and improperly withheld amounts needed to repay prior loans when it cashed subsequent checks for consumers. The company did not admit any violations of the law in agreeing to the settlement. 

According to the consent order, Cash Express and an affiliate, First Cash Express, LLC, provide short-term, small-dollar loans and check cashing services in Alabama, Kentucky, Mississippi, and Tennessee. Cash Express has been in operation since 1998. In addition to making the required payments, the two companies are obligated by the consent order to meet other conditions, including refraining from making certain misrepresentations and creating a compliance plan.

 

CFPB blog post highlights role of Ombudsman's Office

This story appeared in Bank Digest.                                   

A blog post by Consumer Financial Protection Bureau Ombudsman Wendy Kamenshine noted that October 11 was the first Ombuds Day, which she said was intended to increase awareness and understanding of the ombudsman profession. According to Kamenshine, an ombudsman "employs alternate ways to informally resolve conflict and advocates for a fair process rather than someone's desired outcome."                                  

She said the CFPB Ombudsman's Office is "an independent, impartial, and confidential resource that helps consumers, financial entities, and others, resolve process issues arising from their interactions with the Bureau. In short, we advocate for fair process in consumer financial protection." The post goes on to list ways the CFPB Ombudsman's Office provides assistance.