As is often the case, the CFPB has led the way in both the significance for community bankers and the volume of regulatory activity. Last Wednesday, the Bureau released the long-awaited disclosures to mortgage borrowers that integrate disclosures required by RESPA and TILA. The nearly 1,900 page regulation will take some time to digest, but it nearly brings to a close the CFPB’s rulemaking on mortgages. The Bureau also took action against a payday lender. The action is important both for the substance of the violations and for the required restitution and for a hefty civil money penalty of $5 million.

Virtual currency and specifically bitcoins were the subject of the first widely publicized discussions of the risks and merits of these items in hearings before two different Senate committees. Perhaps surprisingly, federal government witnesses were largely positive about virtual currency and felt that the government already has adequate authority to address the risks of the business, particularly its vulnerability to money laundering and related activities subject to the Bank Secrecy Act.

The full range of agency activity is as follows:

The Economy

  • Federal Open Market Committee releases minutes of meeting on Oct. 29-30 (2013). Minutes available here.
    • Members of the FOMC “broadly continued to project the pace of economic activity to pick up. The acceleration over the medium term was expected to be bolstered by the gradual abatement of headwinds that have been slowing the pace of economic recovery – such as household-sector deleveraging, tight credit conditions for some households and businesses, and fiscal restraint – as well as improved prospects for global growth.”
    • “Available information suggested that inflation remained subdued and below the Committee’s longer-run objective of 2 percent. Similarly, longer-run inflation expectations remained stable and, by some measures, below 2 percent.”
  • Senate Banking Committee votes to forward to the full Senate nomination of Vice Chair Yellen to be Chair of the Federal Reserve Board.
  • Monetary policy and the markets: “Communication and Monetary Policy,” Remarks by Chairman Bernanke at the National Economists Club Annual Dinner (Nov. 19, 2013). Text available here.
    • “It is beyond the power of the central bank to set a longer-run target for employment that is immutable or independent of the underlying structure of the economy.”
    • Employment objective of Federal Reserve's monetary policy is the “longer-run normal unemployment rate.” Members of the FOMC estimate this rate to be 5.2 to 6%.

Bank Secrecy Act

  • See Virtual Currencies below.

CFPB

  • Integrated mortgage loan disclosure forms published Nov. 20, available here.
    • Related field hearing in Boston on Nov. 20. Prepared remarks of Director Cordray available here.
    • For discussion, see Mortgages below.  

Capital

  • Community banks – regulatory capital estimation tool made available by federal banking agencies (Nov. 19, 2013).

Community Banking

  • FDIC Advisory Committee on Community Banking met, Nov. 19, 3013. Available here.
  • OCC publishes newsletter reviewing role of banks in rural development.
    • Community Developments Investments (Nov. 2013), available here.

Enforcement

  • Civil money penalties: CFPB. In first enforcement action against a payday lender, CFPB obtains $5 million civil money penalty. Consent order available here.
    • Note civil money penalty of $5 million, probably driven by interference with CFPB examination.
    • Lender barred from seeking tax benefit from payment of penalty.  

Financial Education

  • CFPB Report, Navigating the Market: A comparison of spending on financial education and financial markets (Nov. 18), available here.
    • Education outspent by marketing by 25 to 1.
    • Press call: statements available here and here.

Military Servicemembers

  • Consumer protection and predatory lending: testimony of CFPB Assistant Director Holly Patreaus before the Senate Committee on Commerce, Science and Transportation (Nov. 20, 2013). Written testimony and archived webcast available here.

Mortgages

  • Integrated mortgage loan disclosure forms and related rule and other materials published by CFPB on Nov. 20. Forms and other material available here.
    • 1,888 pages
    • Different templates depending on nature of the loan.
  • CFPB field hearing in Boston, Nov. 20. Remarks of Director Cordray available here.
  • JPMorgan settlement (Nov. 18). Press release, settlement agreement, and related materials available here.
    • $2 billion in civil money penalty
    • $1.9 billion to settle NCUA and FDIC claims
    • $4 billion to settle FHFA claims
    • $1.1 billion to settle state government claims
    • $4 billion in consumer relief

OTS/OCC

  • OCC rescinds several OTS compliance documents, referring federal savings associations to existing OCC guidance. Available here.

Payday Lending

  • First CFPB enforcement action, against payday lender Cash America. Materials available here.
    • Violations included:
      • Destruction of records and other actions that disrupted CFPB compliance exam.
      • Robo-signing of affidavits, pleadings, and documents to be notarized.
      • Loans to servicemembers with APRs in violation of Military Lending Act.
    • Remedies:
      • Restitution: $8 million.
      • Civil money penalty: $5 million.
  • Deposit advance products: Agencies issue final supervisory guidance
    • Guidance on Supervisory Concerns and Expectations Regarding Deposit Advance Products (Nov. 21, 2013), available here.

Payments Systems

  • CFPB to turn its attention to payments systems issues, particularly fraud, predatory practices, and privacy and security.
    • Remarks of Director Cordray at The Clearing House Annual Conference (Nov. 21, 2013). Text available here.

Shadow Banking

  • “Shadow Banking and Systemic Risk Regulation,” Remarks of Federal Reserve Governor Tarullo at the Americans for Financial Reform and Economic Policy Institute Conference (Nov. 22, 2013).

Student Lending

  • “Generation Debt: The Promise, Perils and Future of Student Loans,” Symposium at the Federal Reserve Bank of St. Louis (Nov. 18).
    • Remarks on student lending by CFPB Assistant Director Chopra, available here.

Swaps and Derivatives

  • Over-the-counter market: “OTC Market Infrastructure Reform: Opportunities and Challenges” Remarks by Federal Reserve Governor Powell at The Clearing House 2013 Annual Meeting” (Nov. 21, 2013). Text available here.

Virtual Currencies

  • Two Senate hearings, Nov. 18 and 19.
    • Senate Committee on Homeland Security and Government Security, “Beyond Silk Road: Potential Risks, Threats, and Promises of Virtual Currencies” (Nov. 18).
      • Written testimony and archived webcast available here.
    • Senate Banking Committee, “The Present and Future Impact of Virtual Currency” (Nov. 19)
      • Written testimony and archived webcast available here.

Bank Closings

  • None

Congressional Activity

  • Senate Committee on Homeland Security and Government Security
    • “Beyond Silk Road: Potential Risks, Threats, and Promises of Virtual Currencies” (Nov. 18). For materials, see Virtual Currencies above.
  • Senate Banking Committee hearings
    • “The Present and Future Impact of Virtual Currency” (Nov. 19). For materials, see Virtual Currencies above.
    • “Housing Finance Reform: Powers and Structure of a Strong Regulator” (Nov. 21).
      • Written testimony and archived webcast available here.
    • “Housing Finance Reform: Developing a Plan for a Smooth Transition” (Nov. 22).
      • Written testimony and archived webcast available here.
  • Senate Committee on Commerce, Science & Transportation hearing
    • “Soldiers as Consumers: Predatory and Unfair Business Practices Harming the Military Community” (Nov. 20).
      • Written testimony and archived webcast available here.
  • House Financial Services Committee hearings
    • “A General Overview of Disparate Impact Theory” (before the Subcommittee on Oversight and Investigations) (Nov. 19).
      • Written testimony and archived webcast available here.
    • “Implementation of the Biggert-Waters Flood Insurance Act of 2102: Protecting Taxpayers and Homeowners” (before the Subcommittee on Housing and Insurance) (Nov. 19).
      • Written testimony and archived webcast available here.
    • “A Legislative Proposal to Amend the Securities Investor Protection Act” (before the Subcommittee on Capital Markets and Government Sponsored Enterprises) (Nov. 21).
      • Written testimony and archived webcast available here.

Regulatory Comment Deadlines

  • Nov. 25 – Federal Reserve: Two interim final rules on incorporation of Basel III into stress testing and capital planning, one for bank holding companies with more than $50 billion in total consolidated assets and another for bank holding companies with between $10 and $50 billion in total consolidated assets.
  • Nov. 25 – CFPB: Rules of practice for issuance of temporary cease-and-desist orders.
  • Dec. 2 – SEC: Regulation S-K disclosure of ratio of CEO compensation to median employee compensation.
  • Dec. 10 – Federal Reserve, FDIC, OCC: Loans in areas having special flood hazards.
  • Dec. 24 – CFPB, Federal Reserve, OCC, FDIC, NCUA, SEC: Standards for assessing diversity policies and practices.
  • Jan. 14, 2014 – CFTC: Position limits and aggregation of positions.
  • Jan. 31, 2014 – Federal Reserve (OCC, FDIC): Liquidity coverage ratio.
  • Feb. 3, 2014 -- SEC: Regulation Crowdfunding.
  • Feb. 10, 2014 – CFPB: Debt collection (advance notice of proposed rulemaking).
  • Mar. 17, 2014 – CFPB: Regulation E, list of countries qualifying for safe harbor.