Dodd-Frank News Center

CFPB Acts to Provide Credit to Stay-at-Home Spouses, Partners

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau  has amended regulations implementing the Credit Card Accountability Responsibility and Disclosure Act to provide access to credit cards for spouses and partners that do not work outside the home. "Stay-at-home spouses or partners who have access to resources that allow them to make payments on a credit card can now get their own cards," said CFPB Director Richard Cordray in the bureau's announcement.

Hensarling Reiterates Opposition to Receiving Cordray Testimony

This story appeared in Bank Digest.

House Financial Services Committee Chairman Rep. Jeb Hensarling (R-Texas) reiterated that his committee will not receive testimony from President Barack Obama's "unconstitutionally appointed czar," Consumer Financial Protection Bureau Director Richard Cordray. Hensarling stressed that the committee will continue to provide oversight of the CFPB, but will not recognize Cordray. "As long as I am chairman of the Financial Services Committee, we will follow the law," Hensarling said, adding that the CFPB has "unprecedented control over the financial destiny of Americans with virtually none of the checks and balances that apply to other government agencies.”

Waters Concerned Over Pace of "Living Will" Process

This story appeared in Bank Digest.

Concerned over the pace of the "living wills" submission process, House Financial Services Committee Ranking Member Rep. Maxine Waters (D-Calif.) has written to Treasury Secretary Jack Lew, Chairman of the Financial Stability Oversight Council, requesting his view on the process. The Dodd-Frank Act requires the nation's largest bank holding companies and other systemically important financial firms as designated by the FSOC to file Orderly Resolution Plans, or "living wills," for how the companies, if faced with imminent failure, could be liquidated without harming the broader economy. The requirement is intended to provide regulators with the necessary information to protect the broader economy from the failure of a large and complex financial firm.

Preserving Access to Manufactured Housing Act Introduced

This story appeared in Bank Digest.

The Preserving Access to Manufactured Housing Act (H.R. 1779) has been introduced to ensure that regulations released earlier this year by the Consumer Financial Protection Bureau do not further hinder the availability of mortgage credit for manufactured homes. The CFPB rule implements expansions to the coverage of the Home Ownership and Equity Protection Act. Enacted in 1994, HOEPA was amended by the Dodd-Frank Act to cover more loans and protect homeowners from certain loan features the bureau refers to as "risky." As amended, HOEPA now applies to most types of mortgage loans secured by a consumer's principal dwelling, including purchase-money mortgages, refinances, closed-end home-equity loans and open-end credit plans. The amendments impose a number of new consumer protection duties on high-cost loans.

CFPB Establishes Civil Penalty Fund for Compensating Victims

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau has finalized a rule on administration of its Civil Penalty Fund. The rule, mandated by the Dodd-Frank Act, is intended to provide transparency to the process for allocating funds to victims harmed by a person or company fined in an enforcement action brought by the CFPB.

FSOC Says Financial System Risks Remain

This story appeared in Bank Digest.

Based on the Financial Stability Oversight Council's 2013 annual report, although many of the least stable funding structures that failed in the financial crisis have disappeared, important risks in the financial system still remain. “A default of a large broker-dealer or other large borrower would leave lenders with large volumes of collateral that they would likely seek to liquidate quickly,” the report warns. The report indicates that technological failures, natural disasters, and cyberattacks  “can emanate from anywhere, at any time.” In terms of cyberattacks, while disruptions to market functioning or the health of the financial system have not occurred to date, “ongoing vigilance is required,” according to the report.

Brown/Vitter Release Terminating Bailouts for Taxpayer Fairness Bill

This story appeared in Bank Digest.

Legislation introduced by Sen. David Vitter (R-La.) and Sen. Sherrod Brown (D-Ohio) requires Wall Street's largest banks to have adequate capital to back up their liabilities, and limits the government safety net to traditional banking operations. The bill also seeks to provide regulatory relief for community banks.

"Our number one goal is to protect the taxpayers from financial risks and the best way to do this is by implementing a systemic solution, increasing the minimum amount of capital the mega banks are required to have," said Vitter. The senators noted that the nation's four largest banks are nearly $2 trillion larger than they were five years ago, aided by an implicit government guarantee resulting from their perceived too-big-to-fail status.

Hensarling Called on to Allow CFPB Director to Fulfill Legal Mandate

This story appeared in Bank Digest.

Ranking Member of the House Financial Services Committee Rep. Maxine Waters (D-Calif.) has sent a letter to Committee Chairman Jeb Hensarling (R-Texas) in response to his refusal to allow Richard Cordray, Director of the Consumer Financial Protection Bureau, to testify before the committee. On April 22, 2013, Hensarling issued a statement that the committee "cannot legally accept testimony from Richard Cordray on the Consumer Financial Protection Bureau's (CFPB) semi-annual report until he is validly appointed as the bureau's director."

Hensarling Refuses Cordray Testimony

This story appeared in Bank Digest.

House Financial Services Committee Chairman Rep. Jeb Hensarling (R-Texas) has issued a statement that the House Financial Services Committee "cannot legally accept testimony from Richard Cordray on the Consumer Financial Protection Bureau's semi-annual report until he is validly appointed as the bureau's director."

CFPB Guides on TILA Escrow Rule

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau has provided a small entity compliance guide discussing the escrow requirements under the Truth in Lending Act (Regulation Z) rule (see Docket No. CFPB-2013-0001). The rule implements statutory changes made by the Dodd Frank Act that lengthen the time creditors must collect and manage escrows for higher-priced mortgage loans. The rule exempts some small creditors that operate predominately in rural or underserved areas if they intend to hold the loans in their portfolios rather than sell them. In addition, the rule provides that the current exemption for escrow accounts that cover insurance on condominiums will be expanded in situations when there is a master insurance policy in place. The escrow rule is effective June 1, 2013.