Dodd-Frank News Center

Loudermilk introduces Financial Reporting Threshold Modernization Act

This story appeared in Bank Digest.                                   

Representative Barry Loudermilk (R-Ga) has introduced the Financial Reporting Threshold Modernization Act (H.R. 6850), which would raise the monetary thresholds for reporting certain financial transactions under the Bank Secrecy Act. 

According to Loudermilk, "The Bank Secrecy Act of 1970 has not been updated in almost five decades and has resulted in massive paperwork burdens on community banks, credit unions, payment processors, and other companies. The law requires these companies to send a report to law enforcement any time there is a single-day cash transaction of $10,000 or more, in an effort to track and combat money laundering and terrorism financing. But the law hasn't been adjusted for inflation since it was first enacted, and this threshold would be more than $60,000 in today's dollars." 

H.R. 6850 would raise the currency transaction report threshold from $10,000 to $30,000, the suspicious activity report threshold for financial institutions from $5,000 to $10,000, and the suspicious activity report threshold for money services businesses from $2,000 to $3,000.

CFPB issues guidance on its communication of supervisory expectations

This story appeared in Bank Digest. 

The Consumer Financial Protection Bureau has issued a bulletin announcing changes to how it articulates supervisory expectations to institutions in connection with supervisory events. According to the bulletin, the Bureau will continue to communicate findings to institutions in writing by way of examination reports and supervisory letters. 

Effective immediately, the Bureau said, those reports and letters will include two categories of findings that convey supervisory expectations: Matters Requiring Attention and Supervisory Recommendations. The uses of both categories are explained in the bulletin. 

 The CFPB said that neither MRAs nor SRs are legally enforceable but that the Bureau will consider an institution's response in addressing identified violations of federal consumer financial law, weaknesses in compliance management systems, or other noted concerns when assessing the institution's compliance rating or otherwise considering the risks the institution poses to consumers and markets.

Crist requests CFPB investigation of Marlin Financial

This story appeared in Bank Digest.                                   

Representative Charlie Crist (D-Fla) has written a letter to Consumer Financial Protection Bureau Acting Director Mick Mulvaney calling for a federal investigation into Marlin Financial, an auto loan company operating in Florida, following a Tampa Bay Times examination of alleged deceptive practices. Crist said, "According to the reporting, Marlin Financial has engaged in unscrupulous business practices including requiring the purchase of unnecessary debt cancellation insurance, charging consumers usurious interest rates, seizing consumers' personal items within repossessed vehicles, and failing to respond to customer complaints." 

In calling for a CFPB investigation, Crist said that if any of the "outrageous behaviors" the Tampa Bay Times has reported violate federal consumer financial protection laws, he urged the Bureau "to hold the company accountable and make its victims whole."                      

Fed proposes repealing S.A.F.E. Act provisions

This story appeared in Bank Digest.     

The Federal Reserve Board is proposing to amend Regulation H (Membership of State Banking Institutions in the Federal Reserve System) and Regulation K (International Banking Operations) to repeal provisions that incorporate the Secure and Fair Enforcement for Mortgage Licensing Act (S.A.F.E. Act). According to a press release, the proposal reflects the transferal of the Fed's rulemaking authority for the S.A.F.E. Act to the Consumer Financial Protection Bureau by the Dodd-Frank Act. Comments on the proposed rule must be received by Nov. 26, 2018.

CFPB blog post highlights report on relationship between geography and credit invisibility

This story appeared in Bank Digest.                                     

A Consumer Financial Protection Bureau blog post highlights a new Bureau "Data Points" report entitled "The Geography of Credit Invisibility," which concerns the relationship between geography and credit invisibility. The authors said those who are "credit invisible" do not have a credit record maintained by one of the nationwide consumer reporting agencies. They also noted that the importance of geography in accessing credit has been a long-standing concern for the Bureau and other policymakers. The post goes on to summarize key findings of the report.

Agencies propose modifying capital rules for high volatility commercial real estate exposures

This story appeared in Bank Digest.                                     

The Federal Deposit Insurance Corporation, Federal Reserve Board, and Office of the Comptroller of the Currency are requesting comment on a proposal to modify their capital rules for high volatility commercial real estate exposures, as required by the Economic Growth, Regulatory Relief, and Consumer Protection Act. The proposal would revise the definition of "high volatility commercial real estate (HVCRE) exposure" to conform to the statutory definition of "high volatility commercial real estate acquisition, development, or construction (HVCRE ADC) loan," in accordance with the EGRRCPA. 

The proposal would also establish principles for interpretation of certain terms in the revised definition, and the agencies request comment on whether any other terms in the revised definition would also require interpretation. Comments on the proposed rule must be received within 60 days of its publicatin in the Federal Register.

OCC proposes amending guidelines on recovery planning standards

This story appeared in Bank Digest.                                     

The Office of the Comptroller of the Currency is proposing to amend its enforceable guidelines relating to recovery planning standards for insured national banks, insured federal savings associations, and insured federal branches to increase the average total consolidated assets threshold for applying the guidelines from $50 billion to $250 billion. The proposed rule would also decrease from 18 months to 12 months the time within which a bank should comply with the guidelines after the bank becomes subject to them and would make technical amendments to remove outdated compliance dates. Comments on the proposed rule must be received by Nov. 5, 2018.

 

 

 

CFPB sues California-based company over pension-advance product claims

This story appeared in Bank Digest.                                     

The Consumer Financial Protection Bureau has filed a complaint against Future Income Payments, LLC, based in Irvine, Calif.; Scott Kohn; and related entities for allegedly violating the Consumer Financial Protection Act of 2010 and the Truth in Lending Act. According to the CFPB's release, the lawsuit alleges that the defendants violated the CFPA by representing to consumers that their pension-advance products were not loans, were not subject to interest rates, and were comparable in cost to, or cheaper than, credit card debt when, in actuality, the pension-advance products were loans and were subject to interest rates that were substantially higher than credit card interest rates. 

The Bureau alleges that the defendants violated TILA by failing to disclose a measure of the cost of credit, expressed as a yearly rate.

 

CFPB updates FCRA model disclosures

This story appeared in Bank Digest.                                     

The Consumer Financial Protection Bureau has issued an interim final rule updating two model disclosures to reflect changes made to the Fair Credit Reporting Act by the Economic Growth, Regulatory Relief, and Consumer Protection Act. The Act requires nationwide consumer reporting agencies to provide national security freezes free of charge to consumers. The Act also requires that whenever the FCRA requires a consumer to receive either the Summary of Consumer Rights or the Summary of Consumer Identity Theft Rights, a notice regarding the new security freeze right also must be included. 

The FCRA requires the Bureau to write model forms of these documents, and the Bureau's interim final rule updates its model forms to incorporate the new required notice. The updated model forms also incorporate a requirement of the EGRRCPA that extends from 90 days to one year the minimum time that nationwide consumer reporting agencies must include an initial fraud alert in a consumer's file. 

The interim final rule is effective Sept. 21, 2018, and comments must be received within 60 days of its publication in the Federal Register.

Regulators clarify guidance isn't law; violations won't bring enforcement actions

This story appeared in Bank Digest.   

Supervisory guidance "does not have the force and effect of law," according to an interagency statement by the bank, thrift, and credit union regulatory agencies. Enforcement actions are not taken for violations of supervisory guidance, the agencies said. The statement was issued by the Federal Reserve Board, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, Consumer Financial Protection Bureau, and National Credit Union Administration. 

According to the statement, supervisory guidance is intended to outline regulators' supervisory expectations and priorities and describe appropriate practices. Specific practices that are consistent with legal or regulatory requirements might be discussed, but only as examples. 

Representative Blaine Luetkemeyer (R-Mo) applauded the interagency statement, saying that regulators had for too long "inappropriately used guidance as if it had the full force of a formal rulemaking."