Dodd-Frank News Center

Fed adopts rule on large financial company assessments

This story appeared in Bank Digest.

The Federal Reserve Board has adopted a rule setting out how it will impose and collect assessments on large bank and savings and loan holding companies and financial companies designated for Fed supervision by the Financial Stability Oversight Council. The rule outlines how the Fed will determine which companies are to be charged, estimate the applicable expenses that result from its supervisory efforts, determine each company's assessment fee, and bill for and collect fees. The first assessments, which will cover the 2012 period, are due by Dec. 15, 2013. The Fed estimates that it will collect about $440 million from 70 companies.

GM pension "top up" agreement resulted from Treasury Department influence, SIGTARP says

This story appeared in Bank Digest.

Treasury Department designees acting under the authority of the Troubled Asset Relief Program used the government's leverage as General Motor's largest lender to influence the decision to "top up" the pensions of some hourly employees of Delphi, a GM subsidiary, according to a report by the TARP special inspector general. The combination of the Treasury's demand that GM resolve its bankruptcy in a period so short as to be unprecedented, combined with the ability of the United Auto Workers to delay that resolution, left GM with little choice but to include the top-up as part of its agreement with the union, according to Special Inspector General Christy Romero.

OCC outlines lending limits final rule

This story appeared in Bank Digest.

The Office of the Comptroller of the Currency has given a description of its June 25, 2013, final rule on lending limits for national banks and savings associations. The rule implements Dodd-Frank Act provisions on lending limits that expand prior law to include credit exposures arising from derivative transactions and repurchase agreements, reverse repurchase agreements, securities lending transactions, and securities borrowing transactions. According to the OCC, the rule offers financial institutions choices of how they measure credit exposures to derivatives transactions and securities financing transactions. However, the OCC retains the authority to require an institution to use a specific measurement method for safety and soundness reasons. The rule takes effect when a temporary exemption expires on Oct. 1, 2013.

CFPB updates TILA, RESPA exam procedures

This story appeared in Bank Digest.

The procedures that will be used by the Consumer Financial Protection Bureau in examining banks and mortgage companies for compliance with its mortgage lending rules have been updated. The Truth in Lending Act exam procedures and Real Estate Settlement Procedures Act exam procedures cover borrowers' ability to pay, qualified mortgage criteria, higher-priced loan appraisals, and escrow accounts, the bureau said. Recent credit card amendments also are covered.

ATR/QM Small Entity Compliance Guide updated

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau has updated its Small Entity Compliance Guide for the Ability-to-Repay and Qualified Mortgage Rule to incorporate clarifications and amendments to the rules issued by the CFPB on May 29, 2013, and July 10, 2013. Among other things, the updated guide discusses: the types of creditors and loan programs that are exempt from the ability-to-repay requirements; how debt and income will be determined under appendix Q for the purpose of meeting the 43 percent debt-to-income requirement under the general QM provision; and the factors that make a QM loan "higher-priced." 

Hensarling remarks on creating a sustainable housing finance system

This story appeared in Bank Digest.

Rep. Jeb Hensarling (R-Texas), Chairman of the Committee on Financial Services, delivered the keynote address at the Bipartisan Policy Center Housing Commission's Regional Forum at the George W. Bush Presidential Center on Aug. 13, 2013. "From my work on the Congressional Oversight Panel for TARP, it became clear to me that the great tragedy of the financial crisis was not that Washington failed to prevent the crisis, but instead that Washington helped lead us into it. And we were led into it based upon a single good intention--namely, that every American family should own a home," said Hensarling. He continued saying, "the [Protecting American Taxpayers and Homeowner] Act is sustainable--sustainable for homeowners so they buy homes they can actually afford to keep; sustainable for taxpayers so they never have to bail out our housing finance system again; and sustainable for our economy so we avoid the seemingly never ending boom-bust cycles of our housing market. Perhaps in Washington that's ideological. In the Fifth Congressional District of Texas, that's common sense."

FDIC alerts institutions of proposed interagency guidance on company-run stress tests

This story appeared in Bank Digest.

The Federal Deposit Insurance Corporation  has alerted its supervised institutions that the federal banking agencies have proposed interagency stress-testing guidance outlining principles for implementation of stress tests as mandated by Section 165(i)(2) of the Dodd-Frank Act. This guidance is applicable to all FDIC-supervised banks and savings associations with at least $10 billion but less than $50 billion in total consolidated assets. The guidance sets forth supervisory expectations for DFA stress test practices and provides information about methodologies these institutions should use.

FHFA seeking public input on reducing Fannie Mae and Freddie Mac

This story appeared in Bank Digest.

The Federal Housing Finance Agency is seeking public input on strategies for reducing Fannie Mae and Freddie Mac's presence in the multifamily housing finance market in 2014. In keeping with the goal of contracting the market presence of Fannie Mae and Freddie Mac while simplifying and shrinking their operations, the FHFA's 2013 Conservatorship Scorecard included reducing their volume of new multifamily business by 10 percent relative to 2012. The FHFA expects this reduction to be achieved this year through a combination of increased pricing, more limited product offerings and stronger underwriting standards. The FHFA now is evaluating alternatives for reducing Fannie Mae and Freddie Mac's multifamily businesses in 2014 and is seeking public input on the potential market impact of various strategies.

Latest property managers report issued

This story appeared in Bank Digest.

The Federal Housing Finance Agency has issued its latest Federal Property Manager's Report to Congress. The report is required by Section 110 of the Emergency Economic Stabilization Act of 2008. The FHFA is a designated Federal Property Manager in its role as conservator for Fannie Mae and Freddie Mac.

FHFA takes strong position against eminent domain plans

This story appeared in Bank Digest.

The Federal Housing Finance Agency has made clear that it intends to take steps to prevent local governments from using their eminent domain authority to acquire and restructure underwater home mortgages. The FHFA fears the proposal would disrupt the housing finance market and reduce the value of assets held by Fannie Mae, Freddie Mac, and the Federal Home Loan Banks (GSEs). According to the agency, it is prepared to challenge local government actions in court, prevent the GSEs from engaging in business in the affected municipalities and counties, and take whatever steps it deems appropriate to prevent harm to the market and recover losses. The agency's statement followed a review of comments made in response to its 2012 notice and was accompanied by a memorandum from the General Counsel.