Dodd-Frank News Center

Senators threaten to invalidate CFPB rules if English is designated CFPB acting director

This story appeared in Bank Digest.                                   

Senator Ben Sasse (R-Neb) has led a group of nine Senators in a letter to Office of Management and Budget Director Mick Mulvaney, who President Donald Trump has appointed acting director of the Consumer Financial Protection Bureau, announcing their intention to work to invalidate any new rules issued by the CFPB if Deputy Director Leandra English prevails in her attempts to serve as the Bureau's acting director instead of Mulvaney.                                   

English filed a lawsuit seeking a temporary restraining order to prevent Mulvaney from serving as CFPB acting director, but a federal district court judge denied the request.                                 

Referring to English, the senators wrote, "Unfortunately, this rogue employee is trying to follow former CFPB Director Cordray's example and run the agency as an unaccountable fourth branch of government. Should this employee prevail in court and successfully serve as Acting Director, we would support legislative efforts to invalidate any new rules finalized by the agency during this employee's service, including the use of the Congressional Review Act. We would also fight to ensure that Congress defunds the CFPB until this employee has relinquished control of the CFPB."

Waters says dispute over CFPB control likely to be 'long legal battle'

This story appeared in Bank Digest.                       

A U.S. district court judge has denied Consumer Financial Protection Bureau Deputy Director Leandra English's motion for a temporary restraining order against the Trump Administration for attempting to install Office of Management and Budget Director Mick Mulvaney as acting director of the CFPB. In response, House Financial Services Committee Ranking Member Maxine Waters (D-Calif) issued a statement saying the decision was "just the beginning of what will likely be a long legal battle," noting that while the motion for a temporary restraining order was denied, "the merits of the case have yet to be decided."                        

According to Waters, the Dodd-Frank Act "is clear that the Deputy Director of the Consumer Bureau shall serve as Acting Director in the absence or unavailability of the Director," and she asserted that English "is the lawful Acting Director" who should be allowed to serve until a new director is confirmed by the Senate.                         

Waters also described as "illegal" Mulvaney's "move to freeze hiring and new regulations at the Consumer Bureau," and she said Mulvaney "does not have the legitimate authority" to constrain the Bureau's work.

Warren questions handling of Mulvaney's dual role as OMB director, CFPB acting director

This story appeared in Bank Digest.                                   

Senator Elizabeth Warren (D-Mass) has written to White House Counsel Don McGahn and Office of Management and Budget Director Mick Mulvaney asking questions about ethics, staffing, and recordkeeping concerns associated with Mulvaney's appointment by President Donald Trump to serve as acting director of the Consumer Financial Protection Bureau.                                  

President Trump recently named Mulvaney to be the CFPB's acting director while he is still serving as OMB director. Warren said she believed that according to the Dodd-Frank Act, CFPB Deputy Director Leandra English, not Mulvaney, is the legal CFPB acting director. But while the dispute is resolved in court, Sen. Warren's letter raises concerns about how ethics rules and other procedures are to be followed given the dual rule.

Otting sworn in as Comptroller of the Currency

This story appeared in Bank Digest. 

Joseph M. Otting has been sworn into office by Treasury Secretary Steven T. Mnuchin as the 31st Comptroller of the Currency after being confirmed by the Senate on November 16. Otting replaces Acting Comptroller of the Currency Keith A. Noreika, who has been serving since Thomas J. Curry stepped down as Comptroller in May after completing his term. Previously, Otting was an executive in the banking industry. 

In a statement, Otting said it was an honor to have been named Comptroller and that he looked forward “to enhancing the value of national bank and federal savings association charters, reducing unnecessary burden, and promoting economic opportunity while maintaining the safety and soundness of the federal banking system.”

President names OMB Director Mulvaney to head CFPB; Bureau names English deputy director

This story appeared in Bank Digest. 

President Donald Trump has designated Office of Management and Budget Director Mick Mulvaney as Acting Director of the Consumer Financial Protection Bureau, and he will serve until a permanent director is nominated and confirmed by the Senate, according to a White House statement. The White House announcement was made on Nov. 24, 2017, the same day the CFPB announced that Director Richard Cordray would be resigning effective at the end of that day and Leandra English, the Bureau's chief of staff, was named deputy director of the Bureau.                                  

Some congressional Democrats argued that English should be the legitimate acting director, with House Democratic Leader Nancy Pelosi (D-Calif) saying, "The law is clear: after Director Cordray's departure, Deputy Director Leandra English will serve as Acting Director until a new Director is confirmed by the Senate." She added, "All Americans should be deeply concerned about the White House's cynical decision to flout the law and attempt to put the ringleader of its dangerous, anti-consumer protection policies in charge of the CFPB."                                  

Echoing Pelosi's sentiments, House Financial Services Committee Ranking Member Maxine Waters (D-Calif) called Mulvaney "an unacceptable candidate" to head the Bureau and said English "should be allowed to serve as Acting Director until a Director is confirmed by the full Senate, consistent with the process articulated in the law that created the Consumer Bureau." In contrast, Committee Chairman Jeb Hensarling (R-Texas) issued a statement congratulating the President on his choice of Mulvaney and said he could "think of no one better to lead the CFPB."

CFPB orders Citibank to pay $6.5M for alleged student loan servicing failures

This story appeared in Bank Digest. 

Charging Citibank, N.A., with deceiving student borrowers about tax benefits, incorrectly charging late fees and interest, and sending misleading monthly bills and incomplete notices, the Consumer Financial Protection Bureau has ordered the bank to end its allegedly illegal servicing practices and pay $3.75 million in redress to consumers and a $2.75 million civil money penalty. Citibank consented to the order without admitting or denying the Bureau's findings.

"Citibank's servicing failures made it more costly and confusing for borrowers trying to pay back their student loans," said CFPB Director Richard Cordray. "We are ordering Citibank to fix its servicing problems and provide redress to borrowers who were harmed."                

CFPB approves final redesigned Uniform Residential Loan Application

This story appeared in Bank Digest. 

The Consumer Financial Protection Bureau has issued an official approval of the final redesigned Uniform Residential Loan Application, which is a form many consumers complete when they apply for a mortgage, according to a Bureau blog post. The redesigned form will include a question about mortgage applicants' language preference starting as early as July 2019.

The Federal Housing Finance Agency directed Fannie Mae and Freddie Mac to add this question to the URLA, the post said, and the CFPB's official approval "confirms that financial institutions' use of the URLA, including the question identifying a mortgage applicant's language preference, does not violate specific provisions of Regulation B, which implements the Equal Credit Opportunity Act."

 

CFPB removes arbitration rule from CFR

This story appeared in Bank Digest.                                   

The Consumer Financial Protection Bureau is removing from the Code of Federal Regulations, effective Nov. 22, 2017, its final rule regulating arbitration agreements in contracts for specified consumer financial products and services since Congress has passed and President Donald Trump has signed a joint resolution (H.J. Res. 111) under the Congressional Review Act disapproving the rule. Under the joint resolution and by operation of the Congressional Review Act, the arbitration agreements rule has no force or effect.     

Treasury makes recommendations on FSOC's designation processes

This story appeared in Bank Digest.                                   

The Treasury Department has released a report to President Donald Trump regarding the designation processes of the Financial Stability Oversight Council. The memorandum responds to the Presidential Memorandum issued on April 21, 2017, and makes recommendations on ways to improve the FSOC's processes for nonbank financial company and financial market utility designations.                                  

The report identifies five policy goals that should be achieved by the FSOC's designation processes: (1) leveraging the expertise of primary financial regulatory agencies; (2) promoting market discipline; (3) maintaining a level playing field among firms; (4) appropriately tailoring regulations to minimize burdens; and (5) ensuring the FSOC's designation analyses are rigorous, clear, and transparent.

Agencies extend transition provisions for nonadvanced approaches banking organizations

This story appeared in Bank Digest.                                   

The Federal Reserve Board, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency are adopting a final rule, effective Jan. 1, 2018, to extend the regulatory capital treatment applicable during 2017 under the regulatory capital rules for certain items, including regulatory capital deductions, risk weights, and certain minority interest limitations. The final rule extends transition provisions in the agencies' capital rules that phase in certain requirements over several years to give banking organizations time to adjust and adapt to the new requirements.                                  

The relief provided under the final rule applies to nonadvanced approaches banking organizations--organizations not subject to the capital rules' advanced approaches. Advanced approaches banking organizations continue to be subject to the transition provisions established by the capital rules for the items affected by the final rule and must apply the capital rules' fully phased-in treatment for these capital items beginning Jan. 1, 2018.