Dodd-Frank News Center

Regulators join forces to strengthen student loan servicing protections

This story appeared in Bank Digest.

A roadmap for student loan servicing reform, including a call to establish clear and consistent industry-wide standards, has been issued by the Consumer Financial Protection Bureau, the Treasury Department, and the Department of Education in a Joint Statement of Principles on Student Loan Servicing and a CFPB report outlining widespread servicing failures reported by student loan borrowers. The CFPB said that it intends to explore potential industry-wide rules to increase borrower protections. The regulators agreed to align efforts to strengthen protections for student loan borrowers and seek to ensure that student loan servicing is consistent, accurate and actionable, accountable, and transparent. The CFPB drew upon these four general principles in formulating recommendations for student loan servicing reform in its report.

In May, the CFPB launched a public inquiry into student loan servicing practices that may make paying back loans a stressful or harmful process for borrowers. The CFPB also sought input on potential solutions to improve service for student loan borrowers in repayment. The CFPB report considered over 30,000 public comments in analyzing student loan servicing practices, policies, and procedures.

• CFPB press release
• Joint Statement of Principles on Student Loan Servicing
• CFPB Report: Student loan servicing
• Treasury Department press release

Volcker Rule FAQs updated

This story appeared in Bank Digest.

The Federal Reserve Board has updated its Frequently Asked Questions regarding the application of section 13 of the Bank Holding Company Act of 1956, commonly referred to as the Volcker Rule, and regulations adopted by the Fed, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, Securities and Exchange Commission, and Commodity Futures Trading Commission. The Fed noted that while the FAQs apply to banking entities for which the Fed has jurisdiction under section 13 of the BHC Act, they have been developed by staffs of all five agencies.

The latest updates, FAQ Nos. 17 and 18, discuss the application of the Volcker Rule to compliance for market making and the identification of covered funds and to CEO certification for prime brokerage transactions.

 

Guinta speaks to N.H. auto dealers about CFPB rate-setting policies

This story appeared in Bank Digest. 

Representative Frank Guinta (R-NH) spoke to New Hampshire auto dealers on September 24 about their frustrations with Consumer Financial Protection Bureau rate-setting policies that prevent dealers from lending to worthy borrowers at a discount, according to a press release issued by Guinta. According to Guinta, "To cope with CFPB harassment, dealers are offering high flat rates to everyone, no matter their credit scores. Or they're dropping out of the car loan business altogether."

Guinta has introduced the CFPB Indirect Auto Financing Guidance Act (H.R. 1737), which would require the CFPB to rescind current lending guidelines and conduct a thorough economic review before issuing further guidance, allowing for greater public comment, according to the release. Peter Welch, president of the National Automobile Dealers Association, praised the legislation.

Results of FMRD meeting released

This story appeared in Bank Digest.

United States and European Union participants in the Financial Markets Regulatory Dialogue met on Sept. 18, 2015, to exchange information on regulatory developments. According to Treasury's release, the participants held discussions on bank structural measures, recent developments in bank resolution, central counterparty resolution, derivatives reforms, securitization within the context of the Capital Markets Union, money market funds, alternative investment fund managers, benchmarks, information sharing for supervisory and enforcement purposes, cybersecurity, and cooperation on audit oversight. The next FMRD meeting will be in Washington, D.C., in February 2016.

CFPB requests renewal of information collection on testing of model forms

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau is requesting comment on a request to renew Office of Management and Budget approval of an existing information collection entitled "Generic Information Collection Plan for the Development and/or Testing of Model Forms, Disclosures, Tools, and Other Similar Related Materials." According to the CFPB's notice, this information collection allows the bureau to conduct qualitative testing of disclosures and related materials relating to the features of consumer financial products and services. The research will result in recommendations for the development of and revisions to such disclosures and related materials. Written comments must be received by Nov. 24, 2015.

Fed issues guidance on revised examination procedures for Regs Z and X

This story appeared in Bank Digest.

The Federal Reserve Board has issued a consumer affairs letter concerning the revised interagency examination procedures for Reg. Z (Truth in Lending) and Reg. X (Real Estate Settlement Procedures Act) that have been developed by the Federal Financial Institutions Examination Council. The Fed said that these revised examination procedures supersede the examination procedures transmitted with CA Letter 15-3

According to the letter, the procedures reflect recent amendments to Regs. Z and X that were published by the Consumer Financial Protection Bureau extending the effective date for the CFPB's new TILA-RESPA integrated disclosure rules from Aug. 1, 2015, to Oct. 3, 2015, and also incorporate minor, technical edits.

Senators reintroduce Jumpstart GSE Reform Act

This story appeared in Bank Digest.

Senate Banking Committee members Bob Corker (R-Tenn), Mark Warner (D-Va), David Vitter (R-La), and Elizabeth Warren (D-Mass) have reintroduced the Jumpstart GSE Reform Act (S. 2038), which is intended to spur substantive and structural housing finance reform, according to Corker's press release. The bill would prohibit any increase in the guarantee fee--which is required to be charged by government-sponsored enterprises Fannie Mae and Freddie Mac--from offsetting other government spending, while also prohibiting the sale of Treasury-owned senior preferred shares in the GSEs without congressional approval and structural housing finance reform.

Garrett introduces bill on FSOC accountability

This story appeared in Bank Digest.

Representative Scott Garrett (R-NJ) has introduced the Financial Stability Oversight Council (FSOC) Transparency and Accountability Act (H.R. 3557), which is intended to bring transparency and accountability to the FSOC. According to Garrett's press release, the bill would subject the FSOC to the Government in the Sunshine Act; subject the FSOC to the Federal Advisory Committee Act; allow for the participation at all FSOC meetings of all members of the Commissions and Boards represented; require that any vote taken by the principal of a Commission or Board represented must first be taken by that Commission or Board, with the principal then voting that same decision at the Council; and allow for members of Congress on the congressional oversight committees of the FSOC to be able to attend all FSOC meetings.

CFPB updates Reg. Z dollar amounts

This story appeared in Bank Digest. 

The Consumer Financial Protection Bureau is issuing a final rule, effective Jan. 1, 2016, that reviews the dollar amounts for provisions in Regulation Z of the federal Truth in Lending Act that implement amendments to TILA under the Credit Card Accountability Responsibility and Disclosure Act of 2009, the Home Ownership and Equity Protection Act of 1994, and the Dodd-Frank Act. The bureau is required to annually calculate the dollar amounts for these provisions. The CFPB has adjusted these amounts, where appropriate, based on the annual percentage change reflected in the Consumer Price Index in effect on June 1, 2015. The bureau said that the minimum interest charge disclosure thresholds will remain unchanged in 2016.

FDIC chairman outlines progress in creating orderly failure framework

This story appeared in Bank Digest.

The Federal Deposit Insurance Corporation’s progress toward developing an orderly liquidation process for the largest, most complex, and most interconnected financial institutions has been "impressive and somewhat underappreciated," FDIC Chairman Martin J. Gruenberg said in remarks prepared for the FDIC Banking Research Conference on Sept. 17, 2015. The financial crisis taught that systemically important financial institutions could indeed fail, Gruenberg said, and that ordinary bankruptcy processes are not adequate to manage such failures in an orderly way. The Dodd-Frank Act established a process with two options: bankruptcy as the preferred choice, and the FDIC's orderly liquidation authority as the back-up.