Dodd-Frank News Center

Brown, Vitter introduce amendments to housing finance reform

This story appeared in Bank Digest.

In advance of the markup of legislation to reform the housing finance system, Sens. Sherrod Brown (D-Ohio) and David Vitter (R-La) introduced nine amendments aimed at ending "Too Big to Fail" and preventing future bailouts. Under the Johnson-Crapo federal housing finance reform bill, a newly-created Federal Mortgage Insurance Corporation would allow private companies to serve as bond guarantors and insure losses on mortgage-backed securities. Under the current bill, these guarantors could be standalone insurance companies or could be affiliates of larger entities, but not insured depository institutions or contained within a bank holding company structure. Under the current bill, while the guarantors could not offer support to any affiliates, their affiliates could offer support to them--triggering the potential for an ultimate bailout from the Federal Reserve Board.

 

NCUA issues capital planning and stress testing rule

This story appeared in Bank Digest.

The National Credit Union Administration is issuing a rule requiring federally insured credit unions (FICUs) with assets of $10 billion or more to develop and maintain capital plans. The rule also provides for annual stress tests of those credit unions. The NCUA believes that in order to ensure the safety and soundness of the credit union system and to protect the National Credit Union Share Insurance Fund, the largest FICUs should have in place systems and processes to monitor and maintain their capital adequacy.

Maryland man gets prison for $4 million home loan scam

This story appeared in Bank Digest.

Brian Kelly, of Forest Hill, Md., was sentenced to serve one year and a day in federal prison for defrauding thousands of homeowners in a $4 million nationwide home loan modification scheme, the Office of the Special Inspector General for the Troubled Asset Relief Program has announced. Kelly will also serve three years of supervised release following his prison term. Restitution will be determined at a later date. Kelly pleaded guilty on May 2, 2013, to one count of conspiracy, nine counts of mail fraud, and nine counts of wire fraud.

Cummings requests hearing on mortgage settlement

This story appeared in Bank Digest.

In a letter to House Committee on Oversight and Government Reform Chairman Darrell Issa (R-Calif), Rep. Elijah E. Cummings (D-Md), the committee's ranking member, has requested a hearing to examine why federal regulators ended the Independent Foreclosure Review (IFR) and entered into a major settlement agreement with mortgage servicing companies. Cummings' request is based on new documents obtained by the committee showing that independent consultants brought in to review servicer abuses had identified high error rates in some categories directly before the IFR was terminated and the final settlement was announced.

FHFA announces $280 million settlement with Barclays Bank

This story appeared in Bank Digest.

The Federal Housing Finance Agency has announced a settlement with Barclays Bank PLC for $280 million, resolving claims alleging violations of federal and state securities laws in connection with private-label mortgage-backed securities purchased by Fannie Mae and Freddie Mac during 2005-2007. Pursuant to the agreement, Barclays will pay $227 million to Freddie Mac and $53 million to Fannie Mae. This is the 13th settlement related to the 18 PLS lawsuits filed by the FHFA in 2011.

OCC proposes to increase assessments for large banks and savings associations

This story appeared in Bank Digest.

The Office of the Comptroller of the Currency has proposed assessment increases for banks and federal savings associations with assets of more than $40 billion. The increases would range between 0.32 percent and approximately 14 percent, depending on the total assets of the institution as reflected in its June 30, 2014, Consolidated Report of Condition and Income (Call Report). The proposal would not increase assessments for banks or FSAs with $40 billion or less in total assets.

Delaney op-ed in Financial Times calls for compromise on GSE Reform

This story appeared in Bank Digest

Entitled "A pragmatic plan to free the mortgage market from Washington," Rep. John Delaney's (D-Md) op-ed in the Financial Times describes how the Delaney-Carney-Himes proposal represents a middle ground between the Johnson-Crapo package in the Senate and the PATH Act, introduced by House Committee on Financial Services Chairman Hensarling (R-Texas) for winding down the government sponsored enterprises (GSEs)—Fannie Mae and Freddie Mac. 

Video answers questions about proposed risk-based capital rule

This story appeared in Bank Digest.

The National Credit Union Administration has released a two-part, 20 minute video explaining its proposed risk-based capital rule. The free video, available on NCUA's YouTube channel, is intended to help credit unions understand how and why NCUA's proposal differs from the Federal Deposit Insurance Corporation's rule and Basel III. Introduced by Chairman Debbie Matz, the video provides an in-depth review of why the rule is needed and how credit unions would fare under both the current risk-based net worth system and the proposed risk-based capital rule.

Guide to Loan Estimate and Closing Disclosure forms released

This story appeared in Bank Digest.

The Consumer Financial protection Bureau has released the "TILA-RESPA Integrated Disclosure: Guide to the Loan Estimate and Closing Disclosure forms." The focus of this Guide is to provide the instructions for completing the Loan Estimate and Closing Disclosure. Under the Dodd-Frank Act, the bureau was directed to integrate the mortgage loan disclosures under TILA and RESPA sections 4 and 5.

Fed urged to address risks associated with bank ownership of physical commodities

This story appeared in Bank Digest.

Senators Sherrod Brown (D-Ohio) and Elizabeth Warren (D-Mass) have urged the Federal Reserve Board to address risks associated with financial holding companies' ownership of physical commodities. As the Fed closes the public comment period on its advanced notice of a proposed rulemaking, the senators recommended that it prohibit financial holding companies (FHCs) from owning physical assets. In a letter to the Fed, the senators outlined concerns associated with FHCs' expansion into activities that are commercial in nature, particularly their ownership of assets involved in the extraction, transportation, storage, and distribution of commodities and energy. They argued that commercial commodities and energy activities expose financial institutions, regulated by the Fed, to unprecedented and unmanageable financial, legal, environmental, and reputational risks.