Dodd-Frank News Center

Perdue sponsors bill to subject CFPB to congressional appropriations process

This story appeared in Bank Digest.                                   

Senator David Perdue (R-Ga) has led 17 other Republican senators in sponsoring the CFPB Accountability Act of 2019, which would subject the Consumer Financial Protection Bureau to the annual congressional appropriations process to provide greater oversight of the Bureau. According to Perdue, the Dodd-Frank Act "gave the CFPB unprecedented power with no Congressional oversight whatsoever." He added, "The American people deserve a closer look at the CFPB to understand how its actions will impact consumers."

CFPB moves to eliminate payday lenders' underwriting obligations

This story appeared in Bank Digest.                                   

The Consumer Financial Protection Bureau is proposing amendments to its 2017 final rule governing "Payday, Vehicle Title, and Certain High-Cost Installment Loans" that would allow lenders to extend short-term, high-cost loans to consumers without needing to satisfy regulatory underwriting requirements. In addition to proposing to eliminate the underwriting requirements, the Bureau is proposing to extend the Aug. 19, 2019, compliance date of the rule's mandatory underwriting provisions until Nov. 19, 2020, which would enable the CFPB to eliminate the requirements before they take effect.

Senate Banking Committee Ranking Member Sherrod Brown (D-Ohio) issued a statement saying, "Eliminating these common sense protections will result in millions of hardworking families trapped in a cycle of debt and poverty." Similarly, House Financial Services Committee Chairwoman Maxine Waters (D-Calif) said she was "deeply troubled by the Consumer Bureau's proposal to gut a much-needed rule that would have reined in payday lenders and ensure consumers can afford to pay off their loans."

But House Financial Services Committee Ranking Member Patrick McHenry (R-NC) said the Bureau's "announcement on an updated payday lending rule and extended comment period will allow all stakeholders another chance to weigh in and establish new underwriting criteria. Most importantly, it will give consumers the opportunity to make their own decisions on credit availability needs for themselves and their families."

Democrats request that CFPB resume supervisory role over MLA

This story appeared in Bank Digest.                                   

House Financial Services Committee Ranking Member Maxine Waters (D-Calif), committee member Denny Heck (D-Wash), and 21 other committee Democrats have sent a letter to Consumer Financial Protection Bureau Director Kathy Kraninger urging her to recommit the Bureau to fulfilling its supervisory role over consumer protection laws, including the Military Lending Act, which the representatives said provides protections for active-duty servicemembers and their families from predatory loans and credit gouging.

In their letter, the representatives expressed their "deep concerns that the Consumer Bureau has recently decided to cease supervising its regulated entities for compliance with the Military Lending Act ("MLA"), a failure to fulfill its responsibility under the law and which is nothing less than a dereliction of duty. We write to seek your written commitment that you will promptly ensure that the Consumer Bureau fulfills its explicit statutory purpose and mandates by resuming a consistent supervisory role over consumer protection laws, including the MLA, for the most robust and efficient protection of servicemembers and their families."

Waters 'deeply troubled' over CFPB settlement with State Farm Bank

This story appeared in Bank Digest.                                   

House Financial Services Committee Ranking Member Maxine Waters (D-Calif) has issued a statement on the Consumer Financial Protection Bureau's settlement with State Farm Bank, FSB, over the alleged misuse of consumer credit information, in which the Bureau did not impose a civil penalty. In her statement, Waters said, "To cap off his harmful tenure at the Consumer Bureau, Mick Mulvaney has chosen to once again turn a blind eye to predatory behavior."

She added that she was "deeply troubled by the Consumer Bureau's announcement that State Farm Bank will not be held accountable for violating the law by improperly obtaining consumer reports and providing credit bureaus with inaccurate information. Financial institutions that abuse consumers need to face real consequences and State Farm Bank, which has over $16 billion in assets, is no exception."

Waters expresses concerns over CFPB proposal to revise no-action letter policy

This story appeared in Bank Digest.                                     

House Financial Services Committee Ranking Member Maxine Waters (D-Calif) has issued a statement regarding the Consumer Financial Protection Bureau's proposed Policy on No-Action Letters and the BCFP Product Sandbox. Waters said she was "very concerned" by the Bureau's proposal, which she said would "significantly loosen its 'no-action letter' policy in a way that could let bad actors that abuse consumers off the hook entirely from enforcement action by the agency."

The Bureau is proposing to revise its 2016 Policy on No-Action Letters and proposing the BCFP Product Sandbox, which would provide no-action relief substantially the same as that available under the No-Action Letter policy, as well as two additional forms of relief. The proposed policy contains revised information collection requirements which consist of the information that should be submitted in applications for admission to the BCFP Product Sandbox. Written comments on the proposal must be received by Feb. 11, 2019.

Waters introduces bill to support CFPB

This story appeared in Bank Digest.                                     

House Financial Services Committee Ranking Member Maxine Waters (D-Calif) has introduced the Consumers First Act (H.R. 6972), which a committee minority press release said was intended "to block the Trump Administration's anti-consumer agenda" and reverse the Administration's efforts, led by Consumer Financial Protection Bureau Acting Director Mick Mulvaney, to "dismantle" the Bureau. 

According to Waters, the bill "would reverse the harmful changes the Trump Administration has imposed on the Consumer Bureau by restoring the agency's supervisory and enforcement powers and increasing the transparency and accountability needed for the agency to carry out it's important mission."

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.

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.

 

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."               

Economic Growth, Regulatory Relief, and Consumer Protection Act signed into law

This story appeared in Bank Digest.                                     

President Donald J. Trump has signed into law the Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155), an act that is intended to ease many of the post-recession restrictions that were imposed on the financial services industry by the Dodd-Frank Act. At a signing ceremony, President Trump said, "This is truly a great day for America and a great day for American workers and small businesses all throughout the nation."

While the President, and a fact sheet released post-signing by the White House, focused on the impact of the law on community banks, which are often defined as those under $10 billion in assets, significant provisions will change which bank holding companies are subject to enhanced prudential standards, benefiting much larger banks.

Senate Banking Committee Chairman Mike Crapo (R-Idaho), the bill's sponsor, said the "bill's passage marks one of our greatest achievements in the 115th Congress," and House Financial Services Committee Chairman Jeb Hensarling (R-Texas) said the bill "takes a major step toward allowing the banking system to serve the needs of American businesses and American families instead of working in the interest of Washington bureaucracy." But Senate Banking Committee Ranking Member Sherrod Brown (D-Ohio) said, "Today, special interests win again. The President signed in to law a giveaway that loosens rules for the same big banks that helped crash the economy a decade ago, leaving Americans taxpayers responsible for a $239 billion bailout."