Financial Services Committee Chairman Calls for Open CFPB Advisory Meetings On March 17, 2014, the Chair of the Financial Services Committee requested that the four advisory groups created by the CFPB open their meetings to the public and to the press. Chairman Jeb Hensarling noted the CFPB claim that “transparency is at the core” of the Bureau’s agenda. To learn more, visit: http://financialservices.house. gov/news/email/show.aspx?ID=U52E63UNHWW7T TJYGQWAWDNKPY CFPB Develops New Prepaid Card Disclosures The CFPB recently announced that it is developing new prepaid card disclosures. Because each prepaid card company’s packaging discloses different fee information, the new proposals would standardize disclosures and thereby facilitate side-by-side comparisons of prepaid card fees. The CFPB is currently testing model disclosures and expects to propose a new rule on these disclosures later in the spring. To learn more, visit: http://www.consumerfinance. gov/blog/prepaid-cards-help-design-a-newdisclosure/ CFTC Requests Comment on Swap Data Reporting Requirements In order to improve data collection and quality standards, the CFTC announced a request for public comment on its swap data recordkeeping and reporting rules. The request for comment seeks input from reporting counterparties and entities on topics related to reporting rules and challenges. The comment period will close on May 27, 2014. To learn more, visit: http://www.cftc.gov/PressRoom/ PressReleases/pr6882-14
Stress Test Results Indicate Success of Large Banking Institutions On March 20, 2014, the Federal Reserve announced the results of the annual Dodd-Frank bank stress tests, noting that banks seem to be in a much stronger position to meet their financial commitments in the event of another downturn than they were at the time of the financial crisis. According to Federal Reserve Governor Daniel K. Tarullo, the “annual stress test is one of the Federal Reserve’s most important tools to gauge the resiliency of the financial sector and to help ensure that the largest firms have strong capital positions.” For more information visit: http://www. federalreserve.gov/newsevents/press/ bcreg/20140320a.htm To read the stress test results, visit: http://www. federalreserve.gov/newsevents/press/bcreg/ bcreg20140320a1.pdf CFPB Releases Third Annual FDCPA Report On March 21, 2014, the CFPB released its annual report on the Fair Debt Collection Practices Act (FDCPA). The report provides background information on the debt collection market, summarizes the CFPB’s consumer response function, provides the number of consumer complaints regarding debt collection received by the CFPB in 2013, describes the CFPB’s debt collection supervision program, outlines developments in law enforcement and advocacy programs, discusses education and outreach initiatives, and discusses the CFPB’s ANPR. To read the report, visit: http://files.consumerfinance. gov/f/201403_cfpb_fair-debt-collection-practicesact. pdf OCC Releases Report on Volcker Rule According to a March 21, 2014 report, the Office of the Comptroller of the Currency (OCC) estimates that the costs associated with Section 619 of the Dodd-Frank Act, also known as the Volcker Rule, will range from $412 million to $4.3 billion. This rule regarding proprietary trading will require an estimated forty-six banks to report metrics, to establish an enhanced compliance program, or to create a core compliance program.
To read the OCC’s report, visit: http://www.occ. gov/topics/laws-regulations/legislation-of-interest/ volcker-analysis.pdf Proposed Rules for State Appraisal Regulations Issued Under the Dodd-Frank Act Federal financial agencies suggested minimum requirements for state supervision of appraisal management companies (AMCs) in a proposed rule on March 24, 2014. The rule would require AMCs operating in states that do regulate AMCs to register, to use only state-certified appraisers for federal transactions, and to ensure independent appraisals. The proposed rule also designates specific powers to state agencies. To learn more, visit: http://www.federalreserve.gov/ newsevents/press/bcreg/20140324a.htm CFPB Releases Report on Payday Loans On March 25, 2014, the CFPB released a report presenting the results of an analysis of consumers’ use of payday loans, focusing on loan sequences. To read the report, visit: http://files.consumerfinance. gov/f/201403_cfpb_report_payday-lending.pdf CFTC Commissioner Discusses Dodd-Frank Impact on Commodity Futures and Swaps CFTC Commissioner Scott O’Malia delivered the keynote address at the 2014 Bank of Canada International Economic Analysis Workshop on Financialization of Commodity Markets on March 21st. The Commissioner discussed the impact of the rapid implementation of the Dodd-Frank Act on swap futures. For more information, visit: http://www.cftc.gov/ PressRoom/SpeechesTestimony/opaomalia-33 OIG Releases CFPB Evaluation Report The Office of Inspector General (OIG) released the results of its evaluation of the effectiveness of the CFPB’s supervision program on March 27, 2014. The Report specifically mentions three areas of improvement: (1) reporting timelines and increased issuance of examination reports; (2) increasing consistency in the use of standard compliance rating definitions in examination reports; and (3) updating the Bureau’s policies and procedures to reflect current practices. Additionally, the Report contains twelve recommendations to improve the CFPB’s supervision program. To read the full report, visit: http://www. federalreserve.gov/oig/files/CFPB-Supervisory- Activities-Mar2014.pdf OCC Releases Summary of TruPS Interim Final Rule On April 1, 2014, the OCC’s interim final rule regarding TruPS went into effect. The rule permits banking institutions to retain investments in TruPS CDOs that invested their offering proceeds in certain securities issued by community banking entities grandfathered under the Dodd-Frank Act. To read the rule, visit: http://www.occ.gov/newsissuances/ federal-register/79fr5223.pdf OCC Adds Asset-Based Lending Booklet The OCC recently released a new booklet entitled Asset-Based Lending. This new booklet addresses the fundamentals and risks of asset-based lending (ABL), including risk management guidance and risk-rating examples. To download the booklet, visit: http://www.occ.gov/ publications/publications-by-type/comptrollershandbook/ pub-ch-asset-based-lending.pdf OCC Releases Quarterly Report on Bank Trading and Derivatives Activity On March 28, 2014, the OCC released its quarterly report on trading revenue and bank derivatives activities. Commercial banks reported total trading revenue of $2.9 billion in the fourth quarter of 2013, a 34% drop from the previous quarter and a 32% drop from the same trading revenue in the fourth quarter of 2012. Full-year trading revenue, however, was 24% higher in 2013 than in 2012.
To read the full report, visit: http://www.occ.gov/ topics/capital-markets/financial-markets/trading/ derivatives/dq413.pdf CFPB Issues Small Entity Compliance Guide for TILA-RESPA Integrated Disclosure Rule On March 31, 2014, the CFPB issued a compliance guide to help small entities understand their new responsibilities resulting from the merger of the mandated disclosures in the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). The TILA-RESPA Integrated Disclosure Rule will merge these mandatory disclosures into two forms, the Loan Estimate and the Closing Disclosure, and will go into effect on August 1, 2015. To read the full compliance guide, visit: http://files. consumerfinance.gov/f/201403_cfpb_tila-respaintegrated- disclosure-rule_compliance-guide.pdf Volcker Rule Took Effect on April 1, 2014 The Volcker Rule, which prohibits banks from engaging in proprietary trading activities and from investing in or sponsoring hedge funds and private equity funds, took effect on April 1, 2014 and extends the conformance deadline to July 21, 2015. For more information on the Volcker Rule, including the ABA’s position on the Rule, visit: http://www.aba. com/Issues/Pages/Volcker-Rule.aspx OCC Publishes New Booklet on Garnishment of Accounts Containing Federal Benefits Payments On April 1, 2014, the OCC published a new booklet to the Comptroller’s Handbook on the garnishment of accounts containing federal benefits payments. The booklet provides background information and examination procedures for regulation of this type of account and explains what financial institutions are required to do upon receipt of a garnishment order against an account holder who receives federal benefits payments via direct deposit. Social Security benefits, Veteran’s benefits, and Federal Employee Retirement System benefits, among others, are subject to the rules outlined in this booklet.
To read the full report, visit: http://www.occ.gov/ publications/publications-by-type/comptrollershandbook/ pub-ch-garnishment-of-accounts.pdf Dodd-Frank Compliance Impacts Small Banks The costs of adhering to new Dodd-Frank regulations are impacting small banks, although the regulations are primarily aimed at larger banks. According to the Wall Street Journal’s Michael Rapoport, the costs of compliance do not decrease as bank size decreases, leading smaller banks to sell themselves to larger banks. The article specifically references the CFPB’s new qualified mortgage (QM) rules as complicated and expensive for small banks. To read more, visit: http://online.wsj.com/news/ articles/SB2000142405270230415720457947391299 5008016 CFPB Expands Non-Bank Supervision On April 2, 2014, CFPB Deputy Director Steven Antonakes addressed the Consumer Bankers Association and discussed the Bureau’s non-bank supervisory role. The expansion of the CFPB’s supervision over non-bank entities includes monitoring student loan servicing, improving debt collection practices, and regulating indirect auto lending. To read the complete version of Deputy Director Antonakes’s remarks, visit: http://www. consumerfinance.gov/newsroom/prepared-remarksof- cfpb-deputy-director-steven-antonakes-at-theconsumer- bankers-association/ Federal Reserve Board Delays CLO Prohibition On April 7, 2014, the Federal Reserve Board announced that it will give banking institutions an additional two years to conform their collateralized loan obligation (CLO) investments to the Dodd-Frank Act’s Volcker rule. To read more, visit: http://www.federalreserve.gov/ newsevents/press/bcreg/20140407a.htm
OIG Releases Work Plan for CFPB On April 11, 2014, the Office of Inspector General released an updated Work Plan for the CFPB as well as for the Board of Governors of the Federal Reserve System. The Work Plan includes completed CFPB projects and notes that the Bureau is in the process of evaluating its compliance with Section 1100G of the Dodd-Frank Act, which mandates that the CFPB evaluate and describe the impact of all proposed rules on the cost of credit for small entities. Additionally, the CFPB is currently auditing its public consumer complaint database. To read the full Work Plan, which is updated every two weeks, visit: http://www.federalreserve.gov/oig/ files/OIG_Work_Plan.pdf New FDIC Rule Restricts Sales of Assets Section 210(r) of the Dodd-Frank Act, which would prevent individuals or institutions that may have contributed or did contribute to the failure of a “covered financial company” to buy a covered financial company’s assets from the FDIC, will become effective on July 1, 2014. To read the final rule, visit: https://www. federalregister.gov/articles/2014/04/14/2014-08258/ restrictions-on-sales-of-assets-of-a-coveredfinancial- company-by-the-federal-deposit-insurance CFPB Proposes Extension to Remittance Disclosure Deadline On April 16, 2014, the CFPB proposed a five-year extension to a temporary exception in its remittance rule. The exception allows covered remittance transfer providers to estimate fees and exchange rates charged by receiving institutions when the exact amounts cannot be determined. The extension would extend the temporary exception to June 21, 2020. The comment period on this proposed rule has been extended to June 6, 2014. To read the full proposal, visit: http://files. consumerfinance.gov/f/201404_cfpb_remittancesproposal. pdf
CFPB Releases Guide for TILA-RESPA Integrated Disclosure Forms In order to increase compliance, the CFPB has released a guide to the new TILA-RESPA Integrated Disclosure rule. The rule takes effect on August 1, 2015 and merges TILA and RESPA real estate disclosures. For a copy of the rule, a plain-language guide to the rule, detailed instructions on completing the disclosures, and sample integrated loan disclosure forms, visit: http://www.consumerfinance.gov/ regulatory-implementation/tila-respa/ CFPB Introduces eClosing Initiative On April 23, 2014, the CFPB announced a new electronic closing pilot program aimed at decreasing the complexity of the closing process for consumers. Relying upon feedback and commentary from consumers and industry stakeholders, the CFPB developed a long-term vision for the closing process as an “empowered, knowledgeable, homebuyer experiencing a more efficient, consumerfriendly process.” The report addresses the complexity of the closing package as well as the high level of variability in the closing process. To read the full initiative, visit: http://files. consumerfinance.gov/f/201404_cfpb_report_ mortgage-closings-today.pdf CFPB Releases Fair Lending Report The CFPB’s Fair Lending Report provides an update on the Bureau’s effort to adhere to its fair lending requirement and identifies several key developments made in the past year: increased efficiency in fair lending activity, guidance on supervisory reviews, outreach to industry and consumers, and interagency collaboration. Additionally, the report identifies supervision and enforcement priorities, including mortgage lending and auto finance. To view the full report, visit: http://files. consumerfinance.gov/f/201404_cfpb_report_fairlending. pdf
New Templates for CFPB Examination Reports and Supervisory Letters The CFPB plans to change the format of its examination reports and supervisory letters by creating a single section in the report including all of the items the Bureau expects the entity to address when a review identifies legal violations or weaknesses in compliance management. To read more about the CFPB’s Supervisory Highlights, visit: http://files.consumerfinance. gov/f/201401_cfpb_supervisory-highlightswinter- 2013.pdf CFPB Implements Regulation Z on eRegulations Platform On May 12, 2014, the CFPB implemented the Truth in Lending Act by posting Regulation Z on its eRegulations platform. All documents related to TILA are posted on this platform, and users can search past and present versions of the regulation, view the text and official interpretations of the regulation, and find guidance and other materials published in the Federal Register. To visit the eRegulation website, visit: http://www. consumerfinance.gov/eregulations/ CFPB Proposes Amendments to Mortgage Rules The CFPB recently published a proposed rule proposing three amendments to the January 2014 final mortgage rules. The proposed rule, which addresses concerns about origination and servicing issues, would impact QM points and fees, would change the definition of “small servicer,” and would increase exemptions from ATR provisions for nonprofit lenders. To read more, visit: http://www.cfpbmonitor. com/2014/05/01/cfpb-issues-proposedamendments- to-mortgage-rules/