Dodd-Frank News Center

CFPB issues rule to clarify HMDA amendments

This story appeared in Bank Digest. 

The Consumer Financial Protection Bureau has issued an interpretive and procedural rule to implement and clarify the requirements of Sec. 104(a) of the Economic Growth, Regulatory Relief, and Consumer Protection Act, which amended the Home Mortgage Disclosure Act. The EGRRCPA contains provisions intended to decrease the burden smaller depository institutions face in complying with HMDA and its implementing regulation, Reg. C. The Bureau anticipates that at a later date it will initiate a notice-and-comment rulemaking to incorporate these interpretations and procedures into Reg. C and further implement the EGRRCPA. The Bureau has also released updates to the Filing Instructions Guide for HMDA data collected in 2018 to incorporate the EGRRCPA as implemented and clarified by the rule., which is effective upon publication in the Federal Register.

Warren requests delay on Kraninger nomination vote until requested information released

This story appeared in Bank Digest.                                     

Senator Elizabeth Warren (D-Mass) has sent a letter to Senate Banking Committee Chairman Mike Crapo (R-Idaho) urging him to delay a committee vote on the nomination of Kathy Kraninger to be director of the Consumer Financial Protection Bureau until the Trump Administration provides all relevant and non-privileged material committee members have requested about Kraninger's management record. According to Warren's press release, Kraninger has still not answered a June 2018 letter Warren and Committee Ranking Member Sherrod Brown (D-Ohio) sent asking for documents related to Kraninger's involvement in the separation of thousands of children from their families at the U.S. southern border. 

The release went on to say that in recently submitted written responses to Questions for the Record submitted by Warren and other committee members, Kraninger suggested she was extensively involved in the implementation of the child separation policy, underscoring the need for committee members to get a more detailed account of her specific role in this policy.

 

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."

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.

 

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.

 

Agencies issue statement on impact of regulatory relief act

This story appeared in Bank Digest.                                     

The Federal Reserve Board, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency have issued a joint statement detailing rules and associated reporting requirements that are immediately affected by the enactment of the Economic Growth, Regulatory Relief, and Consumer Protection Act. According to the agencies' joint release, the changes affect company-run stress testing, resolution plans, the Volcker rule, high volatility commercial real estate exposures, examination cycles, municipal obligations as high-quality liquid assets, and other provisions.                                   

The statement describes interim positions the agencies will take before incorporating the changes into their regulations.

Fed calculates financial sector liabilities at more than $20 trillion

This story appeared in Bank Digest.                                     

The Federal Reserve Board has determined that, as of July 1, 2018, the aggregate consolidated liabilities of all financial companies were equal to $20,283,121,945,000. The number constitutes the average of the year-end financial sector liabilities of the preceding two years and will be the measure of aggregate consolidated liabilities for purposes of Section 622 of the Dodd-Frank Act from July 1, 2018, through June 30, 2019, according to the Fed's announcement and accompanying press release. 

Sec. 622 of the Dodd-Frank Act, implemented by the Fed's Regulation XX, prohibits any financial company from combining with another company if the resulting company's liabilities exceed 10 percent of the aggregate consolidated liabilities of all financial companies. The Fed's regulation also requires that the Fed publish the aggregate consolidated liabilities of all financial companies by July 1 of each year.

 

Corker supports Administration plan to reform Fannie Mae and Freddie Mac

This story appeared in Bank Digest.   

Senator Bob Corker (R-Tenn) has issued a statement on the Trump Administration's proposal to reform government-sponsored enterprises Fannie Mae and Freddie Mac that was included in a plan to reform and reorganize the federal government. 

With regard to the government-sponsored enterprises, the plan proposed "ending the conservatorship of Fannie Mae and Freddie Mac, reducing their role in the housing market, and providing an explicit, limited Federal backstop that is on-budget and apart from the Federal support for low- and moderate-income homebuyers." The plan also proposed "transitioning Fannie Mae and Freddie Mac to fully private entities." 

Corker said, "It is long past time to end the failed model of private gains and public losses, and I agree with the administration that creating competition is a critical step as we work to shrink Fannie and Freddie and put an end to 'too big to fail' mortgage companies." He added that the framework put forth by Office of Management and Budget Director Mick Mulvaney "is the right one and closely resembles the approach we laid out in recent legislative drafts developed on a bipartisan basis in the Senate."

Fed limits credit exposure of large bank holding companies and foreign banking organizations

This story appeared in Bank Digest.                                  

The Federal Reserve Board has approved a final rule to establish single-counterparty credit limits for large U.S. bank holding companies and foreign banking organizations pursuant to Sec. 165(e) of the Dodd-Frank Act. The Fed's release said that consistent with the recently passed Economic Growth, Regulatory Reform, and Consumer Protection Act, the limits in the final rule will apply only to global systemically important bank holding companies (GSIBs) and bank holding companies with at least $250 billion in total consolidated assets. The final rule is effective 60 days after its publication in the Federal Register, but compliance will not be required until Jan. 1, 2020, for GSIBs and until July 1, 2020, for all other firms.

Under the rule, a GSIB will be limited to a credit exposure of no more than 15 percent of its tier 1 capital to another systemically important financial firm, while a bank holding company with $250 billion or more in total consolidated assets will be restricted to a credit exposure of no more than 25 percent of its tier 1 capital to a counterparty. 

Foreign banks operating in the U.S. with $250 billion or more in total global consolidated assets, and their intermediate holding companies with $50 billion or more in total U.S. consolidated assets, will be subject to limits similar to those applicable to bank holding companies with $250 billion or more in assets, the Fed said.an foreclosure.

FDIC-supervised institutions notified of proposed Volcker Rule amendments

This story appeared in Bank Digest.  

The Federal Deposit Insurance Corporation has notified institutions it supervises that the agency, along with the Federal Reserve Board, Office of the Comptroller of the Currency, Securities and Exchange Commission, and Commodity Futures Trading Commission, has issued a proposed rule that would amend the Volcker Rule to provide banking entities with clarity about what activities are prohibited, improve supervision and implementation of the rule, and simplify compliance.

According to the FDIC, the proposal would, among other things, tailor the application of the Volcker Rule based on the size and scope of trading activities of a banking entity, rather than total consolidated assets. The proposal has a 60-day comment period.