Dodd-Frank News Center

House passes CFPB reform

This story appeared in Bank Digest.         

By a vote of 232 to 182, the House of Representatives approved H.R. 3193, the "Consumer Financial Protection Safety and Soundness Improvement Act of 2013." The legislation would replace the position of Director of the Consumer Financial Protection Bureau with a bipartisan five-member commission, change the voting standard established for the Financial Stability Oversight Council from the two-thirds majority vote currently required to a simple majority vote, establish the CFPB as an independent agency, and addresses the CFPB's collection of consumer information and the issuing of annual information disclosure reports. Reaction from members of the House Financial Services Committee, leading up to and following the vote, fell along partisan lines.

Fed extends comment period for physical commodity activities ANPR

This story appeared in Bank Digest.

The Federal Reserve Board has extended the comment date on its advance notice of proposed rulemaking related to physical commodity activities conducted by financial holding companies. Comments are now due by April 16, 2014. The Fed is considering whether additional restrictions would help ensure that physical commodities activities of financial holding companies are conducted in a safe and sound manner and do not pose a threat to financial stability. The comment period is being extended to allow interested persons more time to analyze the issues and prepare their comments.

Vitter, Senators call on FHFA to protect taxpayers from bailouts for Fannie, Freddie

This story appeared in Bank Digest.

Sen. David Vitter (R-La) has sent a letter to Mel Watt, Director of the Federal Housing Finance Agency, calling on FHFA to continue a suspension of contributions to two housing trust funds from Fannie Mae and Freddie Mac. Thirteen Senators joined Vitter on his letter.

Legislation an attack on CFPB, congresswoman says

This story appeared in Bank Digest.

Calling the Consumer Financial Deception Act (H.R. 3193) bill a "blatant assault on the Consumer Financial Protection Bureau and on American consumers," Rep. Carolyn Maloney (D-NY) expressed her opposition to the measure. In a statement, Maloney said, "[t]he true purpose of this bill is not to make the CFPB more 'accountable,' but rather to undermine, defund, and hinder the Bureau in every way conceivable."

Refinance Report filed by FHFA

This story appeared in Bank Digest.

The Federal Housing Finance Agency has released its Fourth Quarter 2013 Refinance Report. In the fourth quarter 2013, 115,140 refinances were completed through the Home Affordable Refinance Program, bringing the total refinances through HARP from the inception of the program to 3,057,958. HARP volume represented 23 percent of total refinance volume during the fourth quarter. In December 2013, 14 percent of the loans refinanced through HARP had a loan-to-value ratio greater than 125 percent. From inception through December 2013, 2,585,240 loans refinanced through HARP were for primary residences, 98,194 were for second homes, and 374,524 were for investment properties.

Representative seeks to strengthen flood insurance proposal

This story appeared in Bank Digest.

Rep. Dennis Ross (R-Fla) has urged House Majority Leader Eric Cantor (R-Va) and Financial Services Ranking Member Maxine Waters (D-Calif) to include provisions to strengthen the House flood insurance proposal. In a letter to Cantor and Waters, he proposed two solutions, which are dependent on joint passage to be effective: states must have the authority to license flood insurance; and FEMA must disclose available data, under appropriate privacy protocols, that provide the basis for risk premium rates for flood insurance. According to Ross, this would allow the private market to develop its own rates and procedures.

Warren calls on Sallie Mae to disclose means to avoid default

This story appeared in Bank Digest.

Senator Elizabeth Warren (D-Mass) sent a letter to Sallie Mae requesting that the company disclose the precise means it uses to help student borrowers avoid default. The letter follows several statements by Sallie Mae about its success keeping student borrowers out of default. In her letter, Warren noted that while there are a number of tools available to help borrowers, "Not all strategies to reduce default rates result in a path to successful repayment, and some may even leave borrowers deeper in debt."

FDIC releases revised interagency consumer compliance examination procedures

This story appeared in Bank Digest.

The Federal Deposit Insurance Corporation has released revised interagency consumer compliance examination procedures for the mortgage rules issued pursuant to the Dodd-Frank Act. The release of these examination procedures is part of the FDIC's ongoing efforts to inform supervised institutions about important bank regulatory developments in order to promote transparency in the FDIC's supervisory program. The examination procedures should be helpful to financial institutions seeking to better understand the areas the FDIC will focus on as part of the examination process.

Stress test, CCAR results to be released

This story appeared in Bank Digest.

The Federal Reserve Board has announced that supervisory stress test results will be released March 20, 2014. According to the Fed, the Dodd-Frank Act stress tests are forward-looking exercises conducted to help assess whether institutions have sufficient capital to absorb losses and support operations during adverse economic conditions. The results will include data such as capital ratios, revenue, and loss estimates under a severely adverse scenario, and assuming a common set of capital actions that is used in the analysis of all of the firms. The standardized capital actions used in the Dodd-Frank Act stress test results provide for comparability across the firms as they assume no changes in recent levels of dividend payments and no common stock repurchases.

CFPB takes action against mortgage lender for illegal payments

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau has ordered a Connecticut mortgage lender, 1st Alliance Lending, LLC (First Alliance), to pay an $83,000 civil money penalty for violating federal law by illegally splitting real estate settlement fees. First Alliance self-reported these violations to the bureau, admitted liability, and provided information related to the conduct of other actors that has facilitated other enforcement investigations. "These types of illegal payments can harm consumers by driving up the costs of mortgage settlements," said CFPB Director Richard Cordray. "The Bureau will use its enforcement authority to ensure that these types of practices are halted. We will, however, also continue to take into account the self-reporting and cooperation of companies in determining how to resolve such matters."