Dodd-Frank News Center

Banking Committee holds hearing on CFPB’s semiannual report

This story appeared in Bank Digest.                                   

The Senate Banking Committee held a hearing entitled “The Consumer Financial Protection Bureau’s Semi-Annual Report to Congress” on Oct. 17, 2019. The committee received the testimony of CFPB Director Kathy Kraninger on the Bureau’s recent semiannual report to Congress, as required by the Dodd-Frank Act. The report covers the period beginning Oct. 1, 2018, and ending March 31, 2019.

According to a prepared opening statement by Committee Chairman Mike Crapo (R-Idaho), the report “outlines the Bureau’s significant work” during that period, including rulemakings and supervisory and regulatory activities, and “provides insight into what the CFPB plans to undertake in the coming work period.”

Brown and Murray request briefing from CFPB Student Loan Ombudsman Cameron

This story appeared in Bank Digest.                                   

Senate Banking Committee Ranking Member Sherrod Brown (D-Ohio) and Senate Health, Education, Labor, and Pensions Committee Ranking Member Patty Murray (D-Wash) have sent a letter to Consumer Financial Protection Bureau Student Loan Ombudsman Robert Cameron requesting answers regarding how he will carry out his duties in his new role. They expressed concerns over “potential conflicts of interest” due to his prior work on behalf of the student loan servicing industry, including his work for the Pennsylvania Higher Education Assistance Authority, which the senators said had “a troubling legal and regulatory history.”

In their letter, Brown and Murray went on to say, “As Deputy Chief Counsel for the Pennsylvania Higher Education Assistance Authority (PHEAA), you were responsible for the company’s compliance with federal and state law. During your tenure, however, PHEAA had a poor compliance record, as reflected in the number of borrower complaints and allegations of violations of federal and state consumer protection law.”

The senators requested that Cameron provide a briefing to staff of their respective committees regarding their concerns.

Brown urges CFPB Director to implement effective date of the Payday Rule

This story appeared in Bank Digest.                               

Senator Sherrod Brown (D-Ohio), Ranking Member of the Senate Banking Committee, is demanding that Consumer Financial Protection Bureau Director Kathy Kraninger implement the payment provision of the Payday Rule that was issued by the CFPB in October 2017. The Aug. 19, 2019, effective date has been stayed by the U.S. courts. "The Bureau's refusal to request to lift the stay of the compliance date for the payment provisions makes no sense and exposes consumers to continued withdrawal requests, resulting in unnecessary fees," wrote Brown.

The Payday Rule prohibits lenders from attempting to withdraw payments from consumers' accounts for certain loans after two prior attempts to withdraw funds failed due to a lack of funds. The Rule also prohibits lenders from making certain loans without determining that the consumer has the ability to repay the loans.

Brown and Warren request action in wake of Blankenstein investigation

This story appeared in Bank Digest.                                   

Senate Banking Committee Ranking Member Sherrod Brown (D-Ohio) and Sen. Elizabeth Warren (D-Mass) have sent letters to the Consumer Financial Protection Bureau, the Office of Inspector General for the CFPB and Federal Reserve Board, and the Department of Housing and Urban Development regarding an investigation by the OIG into the conduct of political appointee Eric Blankenstein during his time at the CFPB. According to Brown's press release, Blankenstein was hired as senior counsel of HUD's Office of General Counsel just one month after resigning from the CFPB in the wake of racist and sexist blog posts that were uncovered by the Washington Post in 2018.

As quoted in Brown's release, the OIG's report found that Blankenstein "may have abused his authority," "may have misused his position for private gain," and "created the appearance of a violation of the Standards of Ethical Conduct for Employees of the Executive Branch."

Brown and Warren are requesting that: (1) the OIG open a follow-up investigation into the CFPB's decision to dismantle the Office of Fair Lending and Equal Opportunity during Blankenstein's time at the agency; (2) HUD immediately fire Blankenstein; and (3) the CFPB dismiss political appointees and allow professional career staff to return to carrying out their work to protect consumers without political pressure.

Brown and Hill issue statements on CFPB's qualified mortgage ANPR

This story appeared in Bank Digest.                                   

Senate Banking Committee Ranking Member Sherrod Brown (D-Ohio) and Rep. French Hill (R-Ark) have issued statements regarding the Consumer Financial Protection Bureau's Advance Notice of Proposed Rulemaking seeking information relating to the expiration of the temporary qualified mortgage provision in the Bureau's Ability to Repay/Qualified Mortgage (ATR/QM) Rule that is applicable to certain mortgage loans eligible for purchase or guarantee by Government Sponsored Enterprises Fannie Mae and Freddie Mac. This provision, also known as the GSE Patch, is scheduled to expire no later than Jan. 10, 2021, although the ANPR says the Bureau may allow a short extension, if necessary, to facilitate a smooth and orderly transition away from the patch. In the ANPR, the Bureau solicits comments on possible amendments to the ATR/QM Rule.

Brown said, "The focus of the Consumer Protection Bureau should be protecting consumers. The action they take on this critical rule should be first and foremost about providing access to sustainable mortgages that fit the needs of individual consumers in today's housing market, and they should hold lenders accountable when they don't live up to their obligations."

Hill supported the CFPB's decision to end the GSE Patch, saying, "Allowing Fannie and Freddie to continue loading up on high-debt mortgages, because of a temporary loophole, has had a harmful effect on the broader housing market."

Senators object to CFPB's removal of HMDA data tools from website

This story appeared in Bank Digest.                                   

Several senators have written to Consumer Financial Protection Bureau Director Kathy Kraninger expressing their "deep concern" about the CFPB's decision "to remove Home Mortgage Disclosure Act (HMDA) Explorer and the Public Data Platform Application Programming Interface (API) that runs it from the CFPB website."

According to a press release by Sen. Chris Van Hollen (D-Md), who was one of the letter's signers, HMDA data is a primary tool to measure trends and disparities in mortgage credit access, and the CFPB's HMDA Explorer and API have made it easier for local organizations without sophisticated data analytics tools to assess the access those in their communities have to mortgage credit.

In their letter, the senators went on to say, "Removing HMDA Explorer without an adequate replacement would be a step backward in HMDA's more than 40-year trend of expanding access to valuable mortgage lending data and protecting equal housing access for all families in all markets. We strongly urge you to reverse course and request that you provide a detailed briefing no later than Friday, May 10, 2019, on the reason(s) that CFPB has decided to discontinue availability of HMDA Explorer and its API and what tools will be made available to provide equal or greater access to usable HMDA data for the public."

Brown urges FSOC to address risks in leveraged loan market

This story appeared in Bank Digest.                                   

Senate Banking Committee Ranking Member Sherrod Brown (D-Ohio) has written a letter to Treasury Secretary Steven T. Mnuchin, who is also chair of the Financial Stability Oversight Council, urging the FSOC to take action to address heightened risks in the leveraged loan market. According to Brown, "The marked increase in the volume of leveraged loans originated by financial institutions has been accompanied by a notable decrease in underwriting standards. Like many financial activities, leveraged lending benefits banks and financial intermediaries that profit by packaging and selling risky loans."

He added that the "FSOC must consider whether this additional risk to the banking system serves as a public benefit to the real economy." Brown requested that he be provided with any FSOC analyses and documents relating to leveraged lending, along with other information.

 

Agencies tell Warren, Brown that Wells Fargo has not satisfied consent order obligations

This story appeared in Bank Digest.                                   

Senators Elizabeth Warren (D-Mass) and Sherrod Brown (D-Ohio) have released new letters from the Federal Reserve Board, Office of the Comptroller of the Currency, and Consumer Financial Protection Bureau in response to inquiries they sent the regulators in March 2019 regarding Wells Fargo.

In separate letters sent to the OCC and CFPB and to the Fed, the senators had expressed concern about Wells Fargo's apparent unwillingness to compensate customers harmed by the bank's illegal auto-lending practices, despite an obligation to do so under its settlement with the OCC and CFPB, and urged the agencies to use their enforcement tools to remove then-CEO Tim Sloan. The senators' letter to the Fed also cited a recent Securities and Exchange Commission fine for overcharging retail mutual fund investors and urged the Fed to refrain from lifting Wells Fargo's growth restriction until Sloan was replaced.

According to Warren's press release, the agencies said in their response letters that Wells Fargo has not satisfied its obligations under existing consent orders, which require the bank to remediate customers harmed by its wrongdoing and impose reforms to end the bank's unlawful activity.

Cummings and Warren release GAO report on credit reporting agency regulation

This story appeared in Bank Digest.                                     

House Oversight and Reform Committee Chairman Elijah Cummings (D-Md) and Sen. Elizabeth Warren (D-Mass) have released the findings of a Government Accountability Office report that focuses on federal regulation of consumer credit reporting agencies and makes recommendations for actions to improve oversight and better protect consumers. They released the report in advance of a hearing of the House Oversight and Reform Subcommittee on Economic and Consumer Policy to examine the GAO's recommendations, as well as efforts by the Federal Trade Commission and the Consumer Financial Protection Bureau to oversee consumer reporting agencies' handling of consumer data.

According to an Oversight and Reform Committee press release, Cummings and Warren requested the report in September 2017, shortly after credit reporting agency Equifax publicly announced that the company had allowed a massive data breach that ultimately affected more than 145 million Americans. The release said the GAO recommended that the FTC be given stronger civil penalty authority to enforce laws that protect consumer data and that the CFPB improve its oversight and supervision of CRAs.

Banking Committee holds hearing on CFPB's report to Congress

This story appeared in Bank Digest.                                     

The Senate Banking Committee held a hearing entitled "The Consumer Financial Protection Bureau's Semi-Annual Report to Congress" on March 12, 2019.

The committee received the testimony of Consumer Financial Protection Bureau Director Kathy Kraninger on the Bureau's most recent semiannual report, which "outlines the CFPB's significant work between April 2018 and September 2018, including rulemakings and supervisory and regulatory activities," according to a prepared opening statement by Committee Chairman Mike Crapo (R-Idaho). Crapo said the report "also provides insight into what the CFPB plans to undertake in the coming work period."