Dodd-Frank News Center

CFPB Director Cordray Delivers Semi-Annual Report

This story appeared in Bank Digest.

The willingness of the Consumer Financial Protection Bureau to discuss its activities with Congress was stressed by Director Richard Cordray when he delivered the bureau's semi-annual report to the House Financial Service Committee. Cordray told the committee that the CFPB's objective was to make sure that consumers had the information they needed to make their own financial decisions, not to make decisions for consumers. “But it is the American way for responsible businesses to be straightforward and upfront with their customers, giving them all the information they need to make informed decisions. That is good for honest businesses and good for the overall economy,” Cordray said. Ensuring that banks and nonbanks are subject to comparable regulation also was cited as a key objective of the bureau.

FRBank President Calls for Less Reliance on Government Regulation

By Richard Roth, J.D., Editor, the CCH Federal Banking Law Reporter, CCH Bank Compliance Guide, Bank Digest; co-author, Dodd-Frank Wall Street Reform and Consumer Protection Act—Law, Explanation and Analysis.

Preventing another financial crisis will require increased reliance on market discipline rather than regulation that interferes with that discipline, Federal Reserve Bank of Richmond President Jeffrey M. Lacker told the Inaugural George and Susan Beischer Address at The Banking Institute of the University of North Carolina School of Law. While supporting the need for effective “living wills” to be used in the case of the failure of a systemically important financial institution, Lacker expressed scepticism over reliance on government regulation, asserting that “The more the centralized judgment of a small handful of officials, however well-informed or well-meaning, replaces the decentralized judgments of a multitude of financial market participants, the less resilient our system will become.” The FRBank president also called for further restrictions on the government's ability to assist failing financial institutions, including the elimination of the Fed's authority to support nonbanks. “[R]elying solely on regulation with ever-increasing reach and ever-increasing stringency will ultimately fail to provide adequate financial stability,” he concluded.

Cordray Discusses Oversight

This story appeared in Bank Digest.

“[T]hough over-regulation can indeed stifle entrepreneurship, under-regulation can also lead to terribly anti-business results,” stated CFPB Director Richard Cordray in remarks before the Chamber of Commerce. According to Cordray, “to foster true competition, we need evenhanded and reasonable oversight of the marketplace.”

Cordray added, “We will not always agree on everything, but I believe we can certainly agree on the basic principles of fair play and the need for an umpire that will call out those who seek an unfair competitive advantage by violating the law. Upstanding businesses will benefit the most when those that cheat their customers are held accountable. Within those boundaries, businesses can compete aggressively with one another, and if they do then we are confident that their customers will reap the benefits through improved products and services.”

Garrett Discusses Threats to American Capital Markets

This story appeared in Bank Digest.

Rep. Scott Garrett, R-N.J., Chairman of the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, discussed job creation and capital market competitiveness in remarks before the Chamber of Commerce.

In regards to the financial crisis, Garrett stated, “The real source of the recent crisis and the breakdown in free market capitalism was the injection of government subsidies into the market and the failure of regulators to do their job, not the capitalist elements which remain despite the best efforts of bureaucrats to eradicate them … In short, the freedom of the U.S. capital markets is under attack.” 

House Passes CFPB Data Protection Fix

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

 The House of Representatives passed legislation ensuring that financial and personal data shared with the Consumer Financial Protection Bureau is treated as privileged information and cannot be leaked to third parties. Similar legislation has been introduced by the Senate Banking Committee. 

CFPB Soliciting Information on Online and Print Consumer Education Content

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau is soliciting comments concerning the information collection to test online and print content the bureau provides to consumers to help them achieve their financial goals and to better understand various financial products and services available to them.

CFPB Soliciting Information on Quantitative Testing of Integrated Mortgage Loan Disclosure Forms

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau is soliciting comments concerning the information collection efforts relating to Quantitative Testing of Integrated Mortgage Loan Disclosure Forms.

Regulators Propose Changes to Leveraged Finance Guidance

This story appeared in Bank Digest.

The Federal Deposit Insurance Corp.,  Federal Reserve Board and Office of the Comptroller of the Currency have announced proposed changes to the 2001 interagency guidance on leveraged finance that are intended to address new features of such transactions, as well as capital structures and payment prospects termed “aggressive.” The revised guidance would apply to transactions “characterized by a borrower with a degree of financial or cash flow leverage that significantly exceeds industry norms as measured by various debt, cash flow, or other ratios.” 

Treasury Releases Latest Capital Purchase Program Transactions

This story appeared in Bank Digest.

The Treasury Department has released the latest transactions under its Capital Purchase Program. As of March 22, 2012, the Treasury's total CPP outstanding investment amount was $16,502,856,731. The report indicated that the Treasury had also received $185,813,557,563 in total capital repayments. Finally, $7,674,195,865 in warrant proceeds have been repurchased by financial institutions or sold by the Treasury as part of a registered public offering of the warrants issued by the financial institution. 

CFPB Seeks Comments on Payday Lending

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau is seeking comments from the public following  its January 2012 public hearing on payday lending in Birmingham, Ala. In a blog entry, the CFPB noted, “We heard and learned a lot at the Birmingham forum, and we know that there are many others around the country who may wish to add to the dialogue.”