Dodd-Frank News Center

Obama signs legislation capping salaries of Fannie Mae, Freddie Mac CEOs

This story appeared in Bank Digest.

President Barack Obama has signed the Equity in Government Compensation Act of 2015 (S. 2036), which suspends the recently announced $4 million a year compensation packages for the CEOs at Fannie Mae and Freddie Mac and limits their total compensation to the prior level of $600,000 a year each. Representative Ed Royce (R-Calif) introduced the House version of the bill (H.R. 2243), and Sen. David Vitter (R-La) authored the Senate version of the bill that passed the Senate by unanimous consent on Sept. 15, 2015.

• Royce press release
• White House press secretary statement

Fed modifies capital plan and stress testing rules

This story appeared in Bank Digest.

The Federal Reserve Board has approved a final rule, effective Jan. 1, 2016, that makes targeted amendments to its capital plan and stress test rules. The Fed's release said the final rule would modify the timing for several regulatory requirements that have yet to be integrated into the capital plan and stress-testing framework.

CFPB issues report on servicemember complaints about high-cost credit

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau has issued a report entitled "A snapshot of servicemember complaints." According to the CFPB, the report provides information on what the bureau has learned from the nearly 2,500 complaints it has received from servicemembers, veterans, and their dependents about high-cost consumer credit. It also provides information on recent updates from the Department of Defense to the regulations implementing the Military Lending Act. The bureau said these updates should generally help servicemembers and their dependents avoid this type of high-cost debt going forward.

FHFA amends stress testing rule

This story appeared in Bank Digest.

The Federal Housing Finance Agency is amending its stress testing rule adopted in 2013 to implement Section 165(i) of the Dodd-Frank Act under a final rule that is effective Jan. 1, 2016. According to the FHFA, the amendments modify: the start date of the stress test cycles, changing them from October 1 of a calendar year to January 1 of the following calendar year; the dates for the FHFA to issue scenarios for the upcoming cycle; the dates for the regulated entities to report the results of their stress tests to the FHFA; and the dates for the regulated entities to publicly disclose a summary of their stress test results for the severely adverse scenario.

The FHFA said the amendments align the agency's rule with rules adopted by other financial institution regulators that implement the Dodd-Frank stress testing requirements.

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. 19 and 20, discuss the treatment of residual market-making positions upon the termination of market-making activity and the applicability of the restrictions in Section 13(f) of the Bank Holding Company Act.

Fed to redistribute unclaimed funds under Independent Foreclosure Review Payment Agreement

This story appeared in Bank Digest.

The Federal Reserve Board plans to redistribute unclaimed funds under the Independent Foreclosure Review Payment Agreement to eligible borrowers of mortgage servicers regulated by the Fed who have cashed or deposited checks.

According to the Fed's press release, the Independent Foreclosure Review Payment Agreement, overseen by the Fed and the Office of the Comptroller of the Currency, provided $3.9 billion for borrowers of 14 servicers whose homes were in any stage of the foreclosure process in 2009 or 2010. As of October 2015, more than $3.5 billion had been cashed or deposited by eligible borrowers.

The Fed said that borrowers of servicers it regulates who have not yet cashed or deposited their original checks have until Dec. 31, 2015, to request replacement checks and that they must cash or deposit their checks by March 31, 2016. The release also said that in mid-2016, the Fed will direct the paying agent to redistribute any funds remaining after March 31, 2016, to borrowers of these servicers who have previously cashed or deposited their original checks.

House passes bills on CFPB indirect auto financing guidance and portfolio lending

This story appeared in Bank Digest.

The House of Representatives has passed the Reforming CFPB Indirect Auto Financing Guidance Act (H.R. 1737) and the Portfolio Lending and Mortgage Access Act (H.R. 1210). H.R. 1737 rescinds the Consumer Financial Protection Bureau’s guidance relating to indirect auto lending and requires the CFPB to study the impact of its policy on consumers and receive public input. It passed by a vote of 332 to 96.

FDIC issues guidance on minimum reserve ratio NPR

This story appeared in Bank Digest.

The Federal Deposit Insurance Corporation has issued a Financial Institution Letter on a notice of proposed rulemaking regarding the minimum reserve ratio requirement for the Deposit Insurance Fund. The NPR was approved by the FDIC's Board of Directors on Oct. 22, 2015, to implement provisions of the Dodd-Frank Act and would raise the minimum reserve ratio of the DIF from 1.15 percent to 1.35 percent. It would also require that the reserve ratio reach 1.35 percent by Sept. 30, 2020, and that the FDIC offset the effect of the increase in the minimum reserve ratio on insured depository institutions with total consolidated assets of less than $10 billion

In addition, the NPR proposes to surcharge large banks and grant credits to small banks for the portion of their regular assessments that contribute to increasing the reserve ratio from 1.15 percent to 1.35 percent. Comments on the NPR are due by Jan. 5, 2016.

House passes Policyholder Protection Act

This story appeared in Bank Digest. 

The House of Representatives has passed the Policyholder Protection Act (H.R. 1478), which was introduced by Reps. Bill Posey (R-Fla) and Brad Sherman (D-Calif) and is intended to ensure that personal insurance policies will not be raided in order to prop up failing financial institutions, according to Posey's press release.

The bill guarantees that state insurance regulators will have authority to protect insurance funds or assets from being used as a "source of strength" by an affiliated institution like a bank regardless of how an insurance company is structured. The release said the legislation also addresses a provision under current law by which the Federal Deposit Insurance Corporation could take a lien on the assets of an insurance company that is part of a larger financial group without concern for how policyholders would be affected. In addition, it requires the FDIC to notify state insurance regulators when it intends to take a lien on insurance company assets and to consult with the states on how this action could affect policyholders.

A Senate version of the bill (S. 798) has been introduced by Sens. David Vitter (R-La) and Jon Tester (D-Mont) and awaits action on the Senate floor.

CFPB releases FY 2015 financial report

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau has released its "Financial report of the Consumer Financial Protection Bureau" for fiscal year 2015. The financial report provides readers with the results of the CFPB's operations to protect the rights of financial consumers and the results of the CFPB's financial operations. For the fifth consecutive year, the Government Accountability Office has rendered an unmodified or "clean" audit opinion on the CFPB's financial statements for fiscal years 2014 and 2015.