Dodd-Frank News Center

Brown speaks on Wall Street regulation after financial crisis

This story appeared in Bank Digest.   

Senate Banking Committee Ranking Member Sherrod Brown (D-Ohio) delivered the keynote speech at an Americans for Financial Reform event entitled "Regulating Wall Street--10 Years Later" on July 24, 2018. In his prepared remarks, Brown said, "The financial crisis followed decades of deregulation of the financial industry, culminating with a Bush Administration that ignored the escalating risks." 

 He went on to say that the Dodd-Frank Act did many good things but that lobbyists for the financial industry "have spent every day since 2010 fighting to weaken and roll back the rules." He added, "While Wall Street rakes in tax breaks and rule rollbacks, Main Street is struggling." 

According to Brown, "We need policies that restructure our economy so that workers share in the profits they create, and Wall Street doesn't determine when workers keep their jobs or how much is in their paychecks."

CFPB settles with bank over alleged improper marketing of overdraft services

This story appeared in Bank Digest.                                     

The Consumer Financial Protection Bureau has reached a proposed settlement with TCF National Bank, headquartered in Wayzata, Minn., regarding its marketing and sale of overdraft services. The Bureau's action was taken in coordination with the Office of the Comptroller of the Currency. 

The CFPB alleged that when attempting to obtain proper legal consent from consumers to charge overdraft fees on one-time debit purchases and ATM withdrawals, TCF obscured the fees it charged and made consenting to overdraft fees seem mandatory for new customers to open an account. 

TCF has agreed to pay $25 million in restitution to customers who were charged overdraft fees and has agreed to an injunction to prevent future violations. The proposed order would also impose a civil money penalty of $5 million, which would be adjusted to account for a $3 million penalty imposed by the OCC in a separate order. In its proposed agreement with the Bureau, TCF did not admit to any wrongdoing.

Banking Committee considers nomination of Kraninger to lead CFPB

This story appeared in Bank Digest.   

The Senate Banking Committee held a full committee hearing on July 19, 2018, to consider the nomination of Kathleen Kraninger to be director of the Consumer Financial Protection Bureau. In her prepared opening statement, Kraninger said, "Under my stewardship, the Bureau will take aggressive action against bad actors who break the rules by engaging in fraud and other illegal activity." 

Committee Chair Mike Crapo (R-Idaho), in his opening statement, rejected a request by Senate Democrats to delay the hearing until requested documents were delivered by saying the documents pertain to "extraneous Administration policies that the requesters do not like, and go far beyond the practice of this committee's document production." Crapo also expressed his confidence that Kraninger is "well-prepared to lead the Bureau in enforcing federal consumer financial laws and protecting consumers in the financial marketplace." 

But in his opening statement, Committee Ranking Member Sherrod Brown (D-Ohio) said, "Kraninger has no experience whatsoever in consumer protection." Referring to Puerto Rico hurricane relief, U.S. housing policy, and recent immigration policy decisions, Brown said that, as Associate Director at the Office of Management and Budget, Kraninger "has been involved in the management of one disastrous policy after another."

House Subcommittee examines capital regimes for financial institutions

This story appeared in Bank Digest.                                     

The House Financial Services Subcommittee on Financial Institutions and Consumer Credit held a hearing entitled "Examining Capital Regimes for Financial Institutions" on July 17, 2018. The hearing was held to examine the existing regulatory structure for prudentially regulated financial institutions and explore avenues that Congress and regulators can address through legislative and regulatory policy changes. 

The Dodd-Frank Act imposed a series of new capital regimes on financial institutions with more than $10 billion in total consolidated assets, but the Economic Growth, Regulatory Relief, and Consumer Protection Act (signed in May 2018) exempts certain financial institutions from the enhanced supervisory standards of Dodd-Frank.

 

CFPB settles with company over alleged unlawful debt collection practices

This story appeared in Bank Digest.                                     

The Consumer Financial Protection Bureau has reached a settlement with National Credit Adjusters, LLC (NCA), a privately held company headquartered in Hutchinson, Kan., and its former CEO and part-owner, Bradley Hochstein. According to the Bureau, NCA and Hochstein used a network of debt collection companies to collect consumer debt on the company's behalf, some of which frequently engaged in unlawful debt collection acts and practices that harmed consumers, such as representing that consumers owed more than they were legally required to pay or falsely threatening consumers and their family members with lawsuits, visits from process servers, and arrest. 

Under the terms of a consent order, NCA and Hochstein are barred from certain collection practices and Hochstein is permanently barred from working in any business that collects, buys, or sells consumer debt. In addition, the order imposes a judgment for civil money penalties of $3 million against NCA and $3 million against Hochstein, although full payment of those amounts is suspended subject to NCA's paying a $500,000 civil money penalty and Hochstein's paying a $300,000 civil money penalty. NCA and Hochstein consented to the issuance of the order without admitting or denying any wrongdoing.

CFPB part of new fraud task force

This story appeared in Bank Digest.                                     

A Consumer Financial Protection Bureau blog post noted that the Bureau is part of a new Task Force on Market Integrity and Consumer Fraud that was recently created by President Donald Trump through an executive order. According to the post, the task force "will provide guidance for the investigation and prosecution of cases involving fraud on the government, the financial markets, and consumers, including cyber-fraud and other fraud targeting the elderly, service members, and veterans." 

The post also said CFPB Acting Director Mick Mulvaney "emphasized that the Bureau will cooperate with other federal and state authorities to combat fraud against Americans" and also "highlighted the Bureau's new initiative to address elder financial exploitation."

Task Force on Market Integrity and Consumer Fraud established

This story appeared in Bank Digest.                                     

Federal regulators and law enforcement agencies have formed a new task force to combat corporate fraud and fraud against consumers, especially the elderly, service members, and veterans. The Task Force on Market Integrity and Consumer Fraud, created through a White House executive order, was announced by Justice Department Deputy Attorney General Rod Rosenstein, Securities and Exchange Commission Chairman Jay Clayton, Consumer Financial Protection Bureau Acting Director Mick Mulvaney, and Federal Trade Commission Chairman Joseph Simons. 

According to prepared remarks by Rosenstein, the task force will focus on "fraud against the government, the financial markets, and consumers; procurement and grant fraud; securities and commodities fraud; digital currency fraud; money laundering; health care fraud; tax fraud; and other financial crimes." One of the group's first objectives, Rosenstein said, will be to identify areas of vulnerability across all of the partner agencies and devote resources to address them.

Democrats request information on Kraninger's role in Hurricane Maria response

This story appeared in Bank Digest.                                 

Senators Bob Menendez (D-NJ), Sherrod Brown (D-Ohio), Elizabeth Warren (D-Mass), and Catherine Cortez Masto (D-Nev) have sent a letter to Office of Management and Budget Associate Director Kathy Kraninger, whom President Donald Trump has nominated to be director of the Consumer Financial Protection Bureau, asking for a full accounting of her role in the Trump Administration's response to Hurricane Maria in Puerto Rico.                                   

According to the letter, "in the aftermath of major disasters, OMB plays an integral role in the analysis of needs, and formulation of disaster supplemental appropriations requests to Congress and any related policies." Regarding Hurricane Maria, the senators wrote, "The Trump Administration's botched and incompetent response to this tragedy of historic proportions served only to exacerbate the excruciating circumstances facing the people of Puerto Rico." They also suggested that the Administration's response to Hurricane Maria was different from its response to other recent disasters, such as Hurricane Harvey in Texas.                                   

The senators asked that Kraninger provide them with a complete description of any role she played in the Trump Administration's response to Hurricane Maria, as well as related documents

Johnson named CFPB acting deputy director

This story appeared in Bank Digest.                                     

Consumer Financial Protection Bureau Acting Director Mick Mulvaney has named Brian Johnson, who currently serves as principal policy director at the Bureau, to be the Bureau's acting deputy director. Mulvaney said that Johnson's "steady character, work ethic, and commitment to free markets and consumer choice make him exactly what our country needs at this agency."                                 

House Financial Services Committee Chairman Jeb Hensarling (R-Texas) issued a statement saying he was pleased with the choice. He added, "Brian's deep understanding of the law and the Bureau's structure was an invaluable asset to me during his time at the Financial Services Committee. There is no one who understands the Bureau more or who is more committed to ensuring the Bureau lives up to its mission of truly protecting consumer access to financial choice and freedom."               

Agencies release public portions of resolution plans

This story appeared in Bank Digest.                                     

The Federal Deposit Insurance Corporation and Federal Reserve Board have released the public portions of four foreign banking organizations' resolution plans, commonly known as "living wills," which are required by the Dodd-Frank Act and must describe each company's strategy for rapid and orderly resolution under bankruptcy in the event of material financial distress or failure. The four firms, which were required to submit plans by July 1, 2018, are Barclays PLC, Credit Suisse Group AG, Deutsche Bank AG, and UBS AG. The plans are focused on the companies' U.S. operations. 

In addition, the FDIC has received and posted on its website the public sections of separate resolution plans submitted on July 1 by 41 large insured depository institutions. These plans are required by FDIC regulation and are designed to enable the FDIC, as receiver, to resolve each institution under the Federal Deposit Insurance Act in a way that provides customers timely access to deposits, maximizes returns, and minimizes creditor losses.