Dodd-Frank News Center

SEC Staff Proposes New Framework for Incorporating IFRS Into the US Financial Reporting System

By James Hamilton, J.D., LL.M., Principal Analyst, CCH Federal Securities Law Reporter and CCH Derivatives Regulation Law Reporter.

SEC accounting staff have proposed a new framework for the gradual implementation of IFRS into the US financial reporting system that blends the existing convergence and endorsement approaches into what the staff calls ``condorsement.’’ The transition to IFRS under the framework would occur on a staggered basis over a number of years and be coordinated with the ongoing standard-setting activities of the IASB. This approach would avoid the costs of a “big-bang” in which U.S. issuers would have to incorporate the entire body of IFRS all at once. It would also limit the occasions in which U.S. issuers would be required to make two accounting changes in relatively quick succession, potentially causing confusion for investors and possibly causing U.S. issuers to incur incremental costs in making major systems changes and retraining personnel twice instead of once. The framework envisions a new role for FASB under which FASB would participate in the process for developing IFRS, rather than serving as the principal body responsible for developing new accounting standards or modifying existing standards under U.S. GAAP.

CFPB Identifies Rules and Orders It Will Enforce

This story appeared in Bank Digest.

In accordance with the Consumer Financial Protection Act of 2010, the CFPB has published a list of the rules and orders that will be enforced by it. This list is being published for public comment, and a final list will be published no later than the designated transfer date of July 21, 2011. On that date, certain consumer financial protection authorities will transfer from seven transferor agencies to the CFPB, and the CFPB will also assume certain new authorities. Subject to the limitations and other provisions of the Act, the CFPB will be authorized to enforce rules and orders issued by the transferor agencies under the enumerated consumer laws. The CFPB will also have authority to enforce in some circumstances the Federal Trade Commission's Telemarketing Sales Rule and its rules under the Federal Trade Commission Act, although the FTC will retain full authority over these rules.

Hoenig: Back to the Business of Banking

By John M. Pachkowski, J.D., Editor, CCH Federal Banking Law Reporter and Bank Digest; Author, Anti-Money Laundering and Bank Secrecy: Compliance and the USA PATRIOT Act; co-Author CCH Financial Privacy Law Guide and Dodd-Frank Wall Street Reform and Consumer Protection Act—Law, Explanation and Analysis.

In a speech before the 29th Annual Monetary and Trade Conference presented by the  Global Interdependence Center and Drexel University’s LeBow College of Business, in Philadelphia, Pa., Thomas M Hoenig, President of the Federal Reserve Bank of Kansas City, spoke on how best to implement financial reform.

At the beginning of his remarks, Hoenig noted that he strongly supports the Volcker Rule and suggests that “it should be implemented with resolve and should be strengthened in its reach and impact.”

Financial Services Roundtable President says Dodd-Frank Act Is “Here to Stay”

By Sarah Borchersen-Keto, CCH Washington News Bureau, Contributing Author, the CCH Federal Banking Law Reporter.

Financial Services Roundtable President Steve Bartlett predicted that the Dodd-Frank Act is “here to stay,” however the new law has “massive breadth, was drafted in a breathtakingly short period of time, and can be improved.”

In a speech May 25, 2011, Bartlett predicted that there will be Congressional oversight hearings this fall to improve the act, yet “no one will try to repeal Dodd-Frank, and no one should insist it is perfect.”

GAO Reports on HAMP

This story appeared in Bank Digest.

The GAO has issued a report detailing the results of a survey on borrowers' experiences with the Home Affordable Modification Program. Roughly 76 percent of the 394 housing counselors surveyed characterized borrowers' overall experiences with HAMP--from the time they first inquired to the point at which they received a decision--as “negative” or “very negative.” By contrast, less than 9 percent of counselors described borrowers' overall experience with HAMP as “positive” or “very positive.” Roughly 40 percent of the counselors that provided written comments on their experiences with HAMP said that they had experienced difficulties working with servicers, while 39 percent said paperwork had been lost or needed to be resubmitted. According to the Treasury's HAMP guidelines, servicers are required to notify borrowers that they have been approved for or denied a trial modification within 30 days of receiving a complete HAMP application package. However, over 86 percent of counselors said that it typically took four months or more for borrowers to receive a decision about a HAMP trial modification from the time the borrower requested it. Nearly 46 percent said that the process typically took seven months or more. Roughly 60 percent of the counselors said the frequency for denial was “often” or “sometimes.” Of these, over half of the counselors said that a substantial number of these denials were related to servicers' miscalculations of borrowers' gross monthly income.

FDIC’s Bair Says Orderly Liquidation Authority “as Harsh” as Bankruptcy

By Sarah Borchersen-Keto, CCH Washington News Bureau, Contributing Author, the CCH Federal Banking Law Reporter.

Federal Deposit Insurance Corp. Chairman Sheila Bair attempted to assure Congress that the agency’s new Orderly Liquidation Authority enacted under the Dodd-Frank Act is “every bit as harsh as bankruptcy” and does not promote bailouts.

Appearing May 26, 2011, before a House Financial Services subcommittee, Bair noted that the creditor priority is “basically the same” as in the bankruptcy process. “The statute limits our ability very narrowly to differentiate among creditors in a way that’s consistent with…our traditional receivership powers,” Bair stressed. She acknowledged, however, that much more needs to be done to convey this message, noting that “we clearly have a job ahead of us in terms of educating folks.”

Thrifts Alerted to OCC Proposal on Integration

This story appeared in Bank Digest.

The OTS has notified thrifts of a May 26, 2011, proposal issued by the Office of the Comptroller of the Currency to implement several provisions of the Dodd-Frank Act (see 2011 No. 2069). The provisions relate to the transfer of functions from the OTS and changes to preemption and OCC visitorial authority. Pursuant to the Act, the OCC will assume responsibility for the examination, supervision and regulation of federal savings associations on July 21, 2011.

Fed Disclosure Hearing Announced

This story appeared in Bank Digest.

Rep. Ron Paul, R-Texas, Chairman of the House Domestic Monetary Policy and Technology Subcommittee, has announced that there will be a hearing June 1 to explore the information disclosed by the Federal Reserve Board in compliance with the Dodd-Frank Act and the Freedom of Information Act regarding its emergency lending facilities, open market operations and discount window lending that took place during the financial crisis.

House Urged to Block Recess Appointments

This story appeared in Bank Digest.

A letter has been sent to House Speaker John Boehner, R-Ohio, asking him not to pass a Senate adjournment resolution in order to block recess appointments by the Obama Administration. Specifically, the 20 senators have concerns with the nominations of Elizabeth Warren to head the Consumer Financial Protection Bureau and Craig Becker to head the National Labor Relations Board. Treasury Special Advisor Warren dodged the question of whether she would accept a recess appointment, telling a Congressional hearing only that it is “up to the President...to make a nomination.”

Apology to Warren Requested

This story appeared in Bank Digest.

Oversight Subcommittee on TARP, Financial Services and Bailouts of Public and Private Programs Chairman Patrick McHenry, R-N.C., has been criticized for his treatment of Treasury Special Advisor Elizabeth Warren at a subcommittee hearing May 24, 2011. Democratic members of the subcommittee have sent a letter to McHenry asking him to apologize for his “disrespectful treatment” of Warren. The letter expresses that McHenry's treatment of Warren “undermines the integrity of our Committee and offends the standards of the House of Representatives.” McHenry accused Professor Warren of giving misleading testimony at a previous hearing and lying about her agreed-upon departure time. The letter asserts that these were “inappropriate and false accusations,” and calls it unacceptable to treat witnesses in such a manner.