Dodd-Frank News Center

Agencies reviewing whether to subject TruPS CDOs to Volcker Rule investment prohibitions

This story appeared in Bank Digest.

The Federal Deposit Insurance Corporation has notified its supervised financial institutions that the federal banking agencies, along with the Securities and Exchange Commission, have issued a statement regarding the treatment of Collateralized Debt Obligations (CDOs) that contain Trust Preferred Securities (TruPS) under section 13 of the Bank Holding Company Act, which implements Section 619 of the Dodd-Frank Act, also known as the "Volcker Rule." The agencies currently are considering whether it would be appropriate and consistent with the Dodd-Frank Act not to subject TruPS CDOs to the investment prohibitions of the Volcker Rule. The agencies intend to address this matter no later than Jan. 15, 2014.

Certain Volcker Rule investment prohibitions under interagency review

This story appeared in Bank Digest.

The Office of the Comptroller of the Currency, Federal Reserve Board, Federal Deposit Insurance Corporation, and Securities and Exchange Commission have issued a statement indicating that they are reviewing whether it would be appropriate and consistent with the Dodd-Frank Act not to subject TruPS-backed CDOs to the investment prohibitions of the Volcker Rule regulations. They intend to address the matter no later than Jan. 15, 2014.

Comments sought on data collection to measure consumer financial well-being

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau has proposed a new information collection titled, "Development of Metrics to Measure Financial Well-being of Working-age and Older American Consumers." Under this collection, the CFPB intends to secure quantitative data through internet-based surveys with working-age (age 18-61) and older American (age 62 and older) consumers "in order to develop and refine survey instruments that will enable the Bureau to reliably and accurately measure adult consumers' financial well-being." The data collection is part of the CFPB's continuing strategy, as directed by the Dodd-Frank Act, to improve the financial literacy of consumers. Comments on this collection must be received on or before Jan. 27, 2014.

CFPB revises Regulation Z to account for change in CPI

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau has updated the requirements of the Truth in Lending regulation (Regulation Z) to reflect a change in the asset size threshold for certain creditors to qualify for an exemption to the requirement to establish an escrow account for a higher-priced mortgage loan based on the annual percentage change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the 12-month period ending in November. The exemption threshold is adjusted to increase to $2.028 billion from $2 billion. The adjustment is based on the 1.4 percent increase in the average of the CPI-W for the 12-month period ending in November 2013. Creditors with assets of $2.028 billion or less as of Dec. 31, 2013, are exempt, if other requirements of Regulation Z also are met, from establishing escrow accounts for higher-priced mortgage loans in 2014. The amendment is effective Jan. 1, 2014.

Fed clarifies revised examination procedures for Regulation Z

This story appeared in Bank Digest.

The Federal Reserve Board has issued guidance on the Revised Interagency Examination Procedures for Regulation Z and Applicability of CA Letter 09-12. The guidance reflects recent amendments to Regulation Z, issued by the Consumer Financial Protection Bureau and applies to all state member banks, including those with $10 billion or less in consolidated assets.

Fed approves swaps push out provision

This story appeared in Bank Digest.

The Federal Reserve Board has approved a final rule clarifying the treatment of uninsured U.S. branches and agencies of foreign banks under section 716 of the Dodd-Frank Act, commonly known as the swaps push out provision. The final rule adopts without change the interim final rule issued by the Fed on June 5, 2013.

Fed warns of effects of risk-transfer transactions

This story appeared in Bank Digest.

The Federal Reserve Board has released a supervisory letter warning larger financial institutions that some transactions intended to reduce their risk may result in the institution retaining risk that is not properly captured in the firm's internal capital adequacy assessment. The danger could arise when risk is shifted to a thinly capitalized counterparty or affiliate of the institution.

Ally agrees to pay nearly $100 million to settle indirect auto loan discrimination charges

This story appeared in Bank Digest.

Ally Financial Inc. and Ally Bank (Ally) have together agreed to pay $98 million to settle charges that they did not try hard enough to ensure that their auto loan pricing structure did not allow illegal discrimination on the basis of race or national origin. According to the Consumer Financial Protection Bureau, the result was that more than 235,000 African-American, Hispanic, and Asian and Pacific Island borrowers paid excessive interest rates on loans purchased by Ally between April 2011 and December 2013. The payment includes $80 million in damages to consumers who were harmed and an $18 million payment to the CFPB's Civil Penalty Fund.

GAO publishes audit results of CFPB's 2012 and 2013 financial statements

This story appeared in Bank Digest.

The Government Accountability Office has released the results of its audits of the fiscal years 2012 and 2013 financial statements of the Consumer Financial Protection Bureau. Among other things, the audits found: CFPB financial statements were presented fairly in accordance with U.S. generally accepted accounting principles; CFPB maintained effective internal control over financial reporting as of September 30, 2013, although internal control deficiencies regarding year-end accounts payable accruals and accounting for property and equipment exist that merit attention; and no reportable noncompliance for fiscal year 2013 with provisions of applicable laws, regulations, contracts, and grant agreements.

OIG releases evaluation of CFPB's integrated examination approach

This story appeared in Bank Digest.

The Consumer Financial protection Bureau should determine the appropriate level of enforcement attorney integration into examinations by reassessing the potential risks associated with the practice against the potential benefits, and document the results of the assessment, according to a recent evaluation by Office of Inspector General of the CFPB's integration of enforcement attorneys into its examinations of depository and nondepository institutions' compliance with laws and regulations.