Dodd-Frank News Center

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."

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

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."

 

Senate votes to rescind CFPB auto lending guidance

This story appeared in Bank Digest.  

The Senate voted to proceed on a Congressional Review Act resolution to rescind the Consumer Financial Protection Bureau's 2013 Auto Lending Guidance. The measure, S. J. Res. 57, passed by a 51 to 47 vote.

The joint resolution of disapproval applies to the Bureau's 2013 guidance document entitled "Indirect Auto Lending and Compliance with the Equal Credit Opportunity Act." An indirect loan is financing offered to a consumer through an automobile dealer instead of directly from a consumer's bank or credit union.

In prepared remarks on the Senate floor in favor of the resolution, Senate Banking Committee Chairman Mike Crapo (R-Idaho) said the CFPB's guidance was an attempt "to make substantive policy changes through guidance rather than through the rulemaking process governed by the Administrative Procedures Act." He added that the guidance "was also an attempt to regulate auto dealers who were explicitly exempted from CFPB supervision and regulation under the Dodd-Frank Act."

But in his prepared floor speech, Banking Committee Ranking Member Sherrod Brown (D-Ohio) said the resolution "would tell Wall Street banks and shady lenders it's ok to discriminate against borrowers" and that it "threatens thousands more protections for workers and families vulnerable to repeal by Congress."

Senate passes Dodd-Frank reform bill

This story appeared in Bank Digest.   

The Senate has passed the Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155), which would modify provisions of the Dodd-Frank Act and related laws governing financial services, by a vote of 67 to 31. In prepared remarks made on the Senate floor, Senate Banking Committee Ranking Member Sherrod Brown (D-Ohio) said S. 2155 "weakens stress tests for all large banks" and "opens the door to weaker oversight of foreign megabanks operating in the U.S.," among other problems he saw with the bill. In a separate statement released after the bill was passed, he said that in passing the bill, the Senate had "rolled back accountability measures for some of the biggest domestic and foreign banks at the expense of taxpayers." 

Similarly, House Financial Services Committee Ranking Member Maxine Waters (D-Calif) issued a statement saying the bill "takes our financial system in the wrong direction, and serves as a giveaway to banks that are already posting record profits." And House Minority Leader Nancy Pelosi (D-Calif) said the Senate had taken "a giant leap backward towards the freewheeling days of the financial crisis." 

But Treasury Secretary Steven Mnuchin issued a statement saying the Senate had taken "an important step today toward achieving common sense financial regulation" and that the bill would "safeguard American consumers through proper and effective oversight."

Senate debates ‘regulatory relief’ bill

This story appeared in Bank Digest. 

The Senate has begun debate on the Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155), which would modify provisions of the Dodd-Frank Act and related laws governing financial services. According to a prepared floor speech by Senate Banking Committee Chairman Mike Crapo (R-Idaho), the bill “offers much-needed reforms that will reduce unnecessary burdens on smaller financial institutions so that they can use more of their capital serving customers, rather than complying with federal regulations that were never intended for them.” 

But according to Senate Banking Committee Ranking Member Sherrod Brown (D-Ohio), the bill “weakens stress tests for all large banks,” including those designated as global systemically important banks, and “opens the door to a weakening of oversight of foreign megabanks operating in the U.S.” 

Senator Elizabeth Warren (D-Mass) filed 17 amendments to demonstrate what she believes are serious flaws with the bill. In addition, Sens. John Kennedy (R-La) and Brian Schatz (D-Hawaii) introduced an amendment intended to make it easier for consumers to protect their credit and fix mistakes in the wake of the Equifax security breach.

Senators request answers from Mulvaney on actions benefitting payday lenders

This story appeared in Bank Digest.

Senators Elizabeth Warren (D-Mass), Richard Blumenthal (D-Conn), and Jeff Merkley (D-Ore) have sent a letter to Office of Management and Budget Director Mick Mulvaney, whom President Donald Trump has also appointed Consumer Financial Protection Bureau acting director, urging him to provide clarity on the rationale for his recent actions they said benefit payday lenders. These senators were among those who first wrote to Mulvaney on January 31 questioning his actions to benefit the payday industry. The senators said they were "disappointed" by Mulvaney's response to the original letter, which they said did not explain his actions but "raised questions about our motivations for standing up for consumers." The senators sent the January 31 letter to Mulvaney again and called on him to answer all their questions by no later than March 9, 2018.

Brown opposes reported revision in CFPB's mission

This story appeared in Bank Digest.                                     

Senate Banking Committee Ranking Member Sherrod Brown (D-Ohio) has released a statement in response to reports that the Consumer Financial Protection Bureau has decided to revise its mission and vision by "further deterring the agency from pursuing its mission of protecting consumers," according to a committee minority press release. The release said the Bureau is reportedly acting under orders from Office of Management and Budget Director Mick Mulvaney, whom President Donald Trump has also appointed CFPB acting director.                                  

In his statement, Brown said, "Banks and payday lenders have enough lobbyists working on their behalf--the mission of the Consumer Financial Protection Bureau must continue to be fighting for working families." Brown added that the Trump Administration should quickly nominate a permanent CFPB Director "who will have full bipartisan support in the Senate and will protect consumers instead of special interests." He said until then, Mulvaney "must take steps to ensure that consumer laws are enforced."

Equifax releases tools to help servicemembers impacted by data breach

This story appeared in Bank Digest.                                   

Following requests by Sens. Dean Heller (R-Nev) and Joe Donnelly (D-Ind), Equifax has gone live with a website with tools specifically for servicemembers who may have been impacted by the recent data breach at the company. In September 2017, Heller and Donnelly sent a letter to Equifax asking the company to detail actions being taken to protect servicemembers' personal information. The Senators requested specific measures to ensure the financial security of the roughly 1.3 million active-duty U.S. military personnel, including nearly 200,000 stationed overseas, some of whom serve in remote or high-conflict areas in the Middle East and parts of Africa.                                  

In October 2017, after Equifax failed to respond to the senators' letter, the legislators' offices connected Equifax with the Department of Defense and Consumer Financial Protection Bureau's Office of Servicemember Affairs to provide input as Equifax sought to create a new website for servicemembers.                                   

"The Equifax data breach put at risk the personal information of more than 145 million Americans, potentially including 1.3 million military servicemembers," said Donnelly. "Our men and women in uniform deserve to have easy access to information on how they may have been negatively impacted and what tools are available to protect their credit files moving forward." 

Congress members question Mulvaney's actions regarding payday lenders

This story appeared in Bank Digest.                                     

House Financial Services Committee Ranking Member Maxine Waters (D-Calif) and Senate Banking Committee member Elizabeth Warren (D-Mass) have written a letter to Consumer Financial Protection Bureau Deputy Director Leandra English, whom the Congress members regard as the CFPB's acting director, and Office of Management and Budget Director Mick Mulvaney, whom President Donald Trump has appointed CFPB acting director, questioning Mulvaney's recent actions that they believe benefit payday and installment lenders. Representatives Al Green (D-Texas) and Keith Ellison (D-Minn) and Sens. Richard Blumenthal (D-Conn) and Jeff Merkley (D-Ore) also signed the letter.                                  

According to the Congress members, "In the last month, the CFPB halted implementation of the agency's final rule preventing abusive payday lending (the 'Payday Rule'); announced its intention to initiate a rulemaking process that appears designed to weaken the Payday Rule; voluntarily dismissed a case against four payday lenders who had allegedly misled customers and charged interest rates approaching 1000%; and halted an investigation into a high-cost installment lender whose abusive business practices trapped its customers into years of debt."                                  

The letter says these actions "benefit an industry that has close ties to Mr. Mulvaney and that has contributed more than $60,000 to his political campaigns." The Congress members asked for answers to a series of related questions.