Banking Industry

  • FDIC Quarterly Banking Profile, available here.

Mortgages

  • Ability to Repay rule: CFPB releases amendments, available here.
    • Banks with less than $2 billion in assets and annually make 500 or fewer first-lien mortgages:
      • Mortgage loans held in portfolio may achieve "Qualified Mortgage" status even if borrowers' debt-to-income ratios exceed 43%.
      • Balloon loans—two-year transition period during which balloon loans may be treated as QMs, if certain conditions are met.
      • Higher annual percentage rates allowed for QMs—350 bps rather than 150 bps over average benchmark.
    • Loan originator compensation—compensation of originator employees not counted toward the 3% points and fees threshold for QMs.
    • Certain nonprofit and community-based lenders exempt from Ability-to-Repay rule.
  • Financing credit insurance premiums
    • CFPB extends effective date of final rule to Jan. 10, 2014, in order to permit CFPB to clarify applicability of rule to transactions other than those in which a single premium is added to loan amount at closing.
  • Making Home Affordable program extended to December 31, 2015.

Preemption

  • National Bank Act preempts state common law tort claims relating to fees on a CashPay card program. Robinson v. Bank of America, N.A., D.C. No. 2:11-cv-03939-GHK-JEM (unpublished mem. op.) (9th Cir., May 22, 2013).

Abusive Practices

  • CFPB files first complaint relying on its new Dodd-Frank powers to halt "abusive" practices: CFPB v. American Debt Settlement Solutions, Inc. Complaint and proposed order are available here.
  • Debt-relief industry a target of CFPB.
  • Per CFPB, abusive practices exist where
    • Company "takes unreasonable advantage of a consumer in certain ways."
    • Company "interferes with a consumer's ability to understand a term or condition of a financial product or service."

Electronic Currency

  • Liberty Reserve and co-founders and managers indicted for money laundering and operation of an unlicensed money transmitter business. Indictment and supporting documents available here.

Too Big to Fail

  • FSOC deems evidentiary record complete in determining whether a set of nonbank financial companies are to be subject to enhanced prudential standards and supervision by the Federal Reserve. Resolution available here.
    • Institutions not publicly identified.
  • Regulatory Landscape: A U.S. Perspective, Speech by Federal Reserve Governor Yellen at the International Monetary Conference (June 2, 2013), available here.

Money Market Funds

  • Proposed rule to be considered at SEC open meeting on June 5, 2013.

Swaps and Security-Based Swaps

  • Antidisruptive Practices Authority, CFTC interpretive guidance and policy statement, 77 Fed. Reg. 31890 (May 28, 2013).

Bank Closing

  • Banks of Wisconsin d/b/a Bank of Kenosha, Kenosha, WI (May 31, 2013).
    • P&A agreement with North Shore Bank, FSB, to assume all deposits.

Federal Reserve Board

  • Closed meeting scheduled for June 3.
    • To consider advance and discount rates to be determined by Reserve Banks.

FDIC

  • Open meeting scheduled for June 4.
  • Discussion agenda
    • Definition of "predominantly engaged in activities that are financial in nature or incidental thereto" for purpose of determining financial institutions that may be subject to Title II orderly liquidation process.

FSOC

  • Open meeting scheduled for June 3.

Regulatory Comment Deadlines

  • June 3 – CFPB: Amendments to the 2013 mortgage rules under RESPA and TILA.
  • June 7 – CFPB: 60-day PRA notice – report of terms of credit card plans.
  • June 7 – CFTC: Swap Dealers and Major Swap Participants – clerical or ministerial employees are not "associated persons."
  • June 15 – Federal Reserve: Annual assessments of bank holding companies and savings and loan holding companies with assets of $50 billion or more. (Regulation TT)
  • July 8 – CFPB: Consumer financial civil penalty fund.
  • July 15 – CFPB: 60-day PRA notice: Truth in Savings Act.
  • July 22 – SEC: all Dodd-Frank Title VII proposed rules on security-based swaps and security-based swap market participants have been reopened for comment.
    • Includes S7-43-10: End-User Exception to Mandatory Clearing of Security-Based Swaps
  • August 21 – SEC: Cross-border security-based swap transactions.

Upcoming Events

  • June 3
    • FSOC and Federal Reserve Board meetings
  • June 4
    • FDIC board meeting
    • Sen. Banking Comm., "Iran Sanctions: Ensuring Robust Enforcement, and Assessing Next Steps"
  • June 5
    • SEC meeting
    • House Fin. Serv. Comm., Subcomm. on Capital Markets and GSEs, "Examining the Market Power and Impact of Proxy Advisory Firms"
    • Sen. Banking Comm., "Long Term Sustainability for Reverse Mortgages: HECM's Impact on the Mutual Mortgage Insurance Fund"
    • Sen. Banking Comm., "State of the American Dream: Economic Policy and the Future of the Middle Class"
  • June 18-19
    • FOMC meeting.