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NLRB, CFPB recess appointees asked to resign, reform demanded
Posted Date: Wednesday, January 30, 2013
A U.S. Senator called for the resignations of the Consumer Financial Protection Bureau director and the 2012 National Labor Relations Board appointees, and another lawmaker has made a vociferous appeal for reform of the CFPB structure. The demands came in the wake of a U.S. Court of Appeals opinion that President Obama’s January 2012 NLRB recess appointments were unconstitutional. Read on to learn one lawmaker’s plan for pursuing reform.
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Number, complexity of rulemakings slow Dodd-Frank implementation, GAO says
Posted Date: Wednesday, January 30, 2013
A recent government report outlined the reasons it’s taking regulators so long to implement the Dodd-Frank Act. The study by the Government Accountability Office also noted the efficacy of some of the financial reforms implemented to date remains unclear. Read on to learn the percentage of required Dodd-Frank regulations that have been finalized so far.
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Regulators are ‘listening carefully’ as they work to craft QRM, OCC’s Curry says
Posted Date: Wednesday, January 30, 2013
The Consumer Financial Protection Bureau may have finalized its qualified mortgage definition, but there’s another regulatory definition in the works that could impact the mortgage industry for years to come — the qualified residential mortgage definition. Comptroller of the Currency Thomas Curry recently told industry participants that regulators are “listening carefully” to all stakeholders as they work to finalize the QRM rules. Read on for the details.
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Know your regulator: Sommers to leave CFTC
Posted Date: Wednesday, January 30, 2013
A member of the Commodity Futures Trading Commission, who often found herself at odds with commission leaders over implementation of the Dodd-Frank Act, announced that she will leave the agency. Commissioner Jill Sommers plans to leave the CFTC at the end of the first quarter after five years on the job. Read on to learn about Sommers’ work with the CFTC.
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QM points and fees: Affiliated businesses (Part 1)
Posted Date: Wednesday, January 30, 2013
Despite vocal opposition from some industry participants, the Consumer Financial Protection Bureau’s new ability-to-repay/qualified mortgage rule includes certain loan originator compensation and fees paid to affiliated businesses in QM’s cap on points and fees. Part one of this two-part series examines the rule’s provisions as they relate to lenders’ affiliates. Because these regulations are of such importance to the mortgage and settlement services industries, we’re making the first part of this series available to all readers.
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CFPB Dodd-Frank Rules: The Great Easter Egg Hunt (Part 1)
Posted Date: Monday, January 28, 2013
The Consumer Financial Protection Bureau’s new mortgage rules will shape the industry for years to come. But while many industry participants are focusing on the negative, Howard Lax of Bodman PLC is on the hunt for the rules’ hidden gems. In part one of this series, you’ll learn why Lax says the CFPB’s inclusion of certain loan originator compensation in the qualified mortgage definition’s points and fees cap may not be as troublesome as it first appears.
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Obama re-nominates Cordray to head CFPB
Posted Date: Monday, January 28, 2013
Richard Cordray’s recess appointment to lead the Consumer Financial Protection Bureau expires at the end of the year; however, President Barack Obama re-nominated Cordray to continue to head the CFPB. Obama also nominated former U.S. Attorney Mary Jo White to lead the Securities and Exchange Commission. Read on for the details.
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CFPB delays remittance rule implementation
Posted Date: Monday, January 28, 2013
As expected, the Consumer Financial Protection Bureau delayed implementation of new rules intended to protect consumers who transfer funds internationally. The bureau is also seeking comments on when the rules should go into effect. Read on for the details.
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Appeals court ruling casts doubt on Cordray appointment, CFPB activities
Posted Date: Monday, January 28, 2013
A federal appellate court ruling that invalidated President Barack Obama’s 2012 recess appointment of three members of the National Labor Relations Board doesn’t mention the Consumer Financial Protection Bureau or its director; however, Washington watchers say the decision has potential implications for the CFPB, its leader and industry participants within the bureau’s supervisory and regulatory ambit.
Dodd Frank Update spoke with two top attorneys to get their take on the ruling and its potential impact. Read on to learn why the ruling could raise questions about the CFPB’s rulemaking and other authorities, and what the attorneys we talked to had to say regarding how industry participants should view the ruling from a compliance standpoint.
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QM compliance training available
Posted Date: Wednesday, January 23, 2013
The ability-to-repay rule recently finalized by the Consumer Financial Protection Bureau will be the topic of a 90-minute instructional webinar hosted by Dodd Frank Update. The webinar features two top compliance attorneys who will discuss important rule provisions and provide best practices for complying with the CFPB’s new qualified mortgage standards. Read on for the details.
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Senators say lawsuit challenges congressional power
Posted Date: Wednesday, January 23, 2013
Three U.S. Senators said a lawsuit targeting controversial Securities and Exchange Commission rules promulgated under the Dodd-Frank Act also challenges the powers of Congress.
A group of trade associations launched a legal challenge targeting the SEC’s extraction payments disclosure rules in October 2012, arguing the commission misinterpreted Dodd-Frank’s requirements when it promulgated its final rule. In their amicus brief, the senators said the lawsuit also “implicates the ability of the legislature to make judgments regarding the national and energy security of the United States.”
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CFTC roundtable to consider ‘futurization’ of the swaps market
Posted Date: Wednesday, January 23, 2013
The Commodity Futures Trading Commission will hold a roundtable to discuss the impact of traders’ migration from the swaps market to the futures market. The shift, now commonly known as “futurization,” first occurred in the energy market late last year ahead of the implementation date for new Dodd-Frank swaps rules. One CFTC commissioner said the shift could mark the start of a troubling trend. Read on for the details.
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Know your regulator: FDIC supervision director heading for FHFA
Posted Date: Wednesday, January 23, 2013
A long-time member of the Federal Deposit Insurance Corp’s. management team will leave the agency at the end of the month for a position with the Federal Housing Finance Agency. Sandra Thompson spent 23 years at the FDIC and is currently the corporation’s director of the Division of Risk Management Supervision. Read on to learn about her work with community bankers.
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Fed study to identify current trends in noncash payments
Posted Date: Wednesday, January 23, 2013
The Federal Reserve plans to study Americans’ use of checks and other noncash payment options. The study builds on research conducted by the Fed over the last decade that has played a role in the debate surrounding debit card interchange rules crafted under the Dodd-Frank Act.
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CFPB final rule roundup: Ten days that will change the mortgage industry
Posted Date: Wednesday, January 23, 2013
The Consumer Financial Protection Bureau finalized several important mortgage rules ahead of a Jan. 21 deadline as required by Title XIV of the Dodd-Frank Act. The bureau released eight final rules between Jan. 10 and Jan. 20, and these rules will shape the housing finance sector for years to come. Read on for a brief summary of each rule, including key revisions and exemptions. You’ll also find the implementation date for each rule and links to more information.
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CFPB issues final rule on lender-furnished appraisals
Posted Date: Wednesday, January 23, 2013
Lenders will be required to provide mortgage applicants with free copies of all appraisals and other home-value estimates under final rules officially issued on Jan. 18 by the Consumer Financial Protection Bureau. The rule clarifies what constitutes a “valuation” for the purposes of the disclosure requirement. The rule also discusses what creditors must do when they receive multiple copies of a valuation. Read on for the details.
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Industry groups comment on proposed remittance rule amendments
Posted Date: Monday, January 21, 2013
As expected, community institutions supported the Consumer Financial Protection Bureau’s plan to delay implementation of the agency’s international remittance transfer rule. The rule, which creates certain protections for consumers who transfer money internationally, was slated to take effect on Feb. 7. However, the bureau proposed a set of rule revisions in December 2012. Read on to learn what community institutions had to say about the CFPB’s plans.
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Industry leaders share initial thoughts on CFPB’s servicing rules
Posted Date: Monday, January 21, 2013
Trade groups and industry participants have been measured in their response to sweeping new servicing rules issued by the Consumer Financial Protection Bureau. A number of industry associations praised the CFPB for expanding an exemption for smaller servicers; however, some expressed concern that the exemption is still too narrow. They also said other rule provisions could place a significant burden on community institutions. Read on for the details.
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House bill would drop ‘fully amortizing’ requirement for seller carryback financing
Posted Date: Monday, January 21, 2013
A U.S. House Republican proposed legislation that would amend a provision of the Dodd-Frank Act related to owner-provided financing of residential mortgage loans, also known as seller carryback financing. The measure introduced by Arizona Rep. David Schweikert would allow certain loans that are not fully amortizing to be used in seller carryback financing. Read on for the details.
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CFPB shelves ‘zero-zero’ alternative loan requirement in LO comp final rule
Posted Date: Friday, January 18, 2013
The Consumer Financial Protection Bureau’s long-awaited final rule on mortgage loan originator compensation does not include a proposed prohibition on consumer payment of upfront points and fees, according to a rule summary released by the CFPB. The rule, however, will make important changes regarding how loan originators are paid and how they qualify for their jobs. Read on to learn about the final rule.
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CFPB finalizes servicing rules
Posted Date: Thursday, January 17, 2013
The Consumer Financial Protection Bureau released two key mortgage servicing rules. The final rules, which implement provisions of the Dodd-Frank Act, are intended to protect consumers from “detrimental actions” by mortgage servicers and provide consumers with tools and information when dealing with servicers. The final rules expanded the scope of a proposed exemption for small servicers. Read on to learn about the final rule and its exemptions for small servicers.
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FDIC approves appraisal requirements for higher-priced mortgages
Posted Date: Tuesday, January 15, 2013
Lenders will be required to obtain a written appraisal from a certified or licensed appraiser and meet other requirements before making a higher-priced mortgage loan under a joint rule approved by the Federal Deposit Insurance Corp. Read on to learn about the final rule and important changes regulators made in response to public comments.
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Know your regulator: Leadership changes continue at SEC
Posted Date: Tuesday, January 15, 2013
The Securities and Exchange Commission announced more changes to its leadership team. The agency recently hired a new general counsel. The SEC also said Enforcement Director Robert Khuzami plans to leave the agency. Read on for the details.
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CFTC extends comment period for proposals to protect customers, funds
Posted Date: Tuesday, January 15, 2013
The Commodity Futures Trading Commission extended the comment period for proposed rules intended to enhance protections for customers and strengthen the safeguards surrounding the holding of money, securities and other property deposited by customers with futures commission merchants and derivatives clearing organizations.
The agency said it extended the comment period to give industry participants additional time to evaluate the rule’s costs and benefits and propose alternative measures to provide increased customer protection and enhanced monitoring of FCMs.
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OCC’s Curry: Any Dodd-Frank tweaks probably won’t impact major rules
Posted Date: Tuesday, January 15, 2013
The leader of the Office of the Comptroller of the Currency Thomas Curry said Congress may make substantive corrections to Dodd-Frank, but any such changes will likely have little impact on some forthcoming major rules. Curry recently told California bankers that regulators are “nearing the finish line” as they work to finalize two important rules. He also said OCC examiners are noticing some troubling trends. Read on for the details.
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Ability-to-repay rule will have unintended consequences, Hensarling warns
Posted Date: Tuesday, January 15, 2013
Some industry participants may be greeting the Consumer Financial Protection Bureau’s new ability-to-repay final rule with cautious optimism, but a top U.S. House Republican made it clear he is not a fan of the bureau’s most important mortgage rule to date. Rep. Jeb Hensarling, chairman of the House Financial Services Committee, promised the panel would examine the rule’s impact.
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Industry groups, consumer advocates weigh in on CFPB’s ability-to-repay rule
Posted Date: Monday, January 14, 2013
The Consumer Financial Protection Bureau received some instant feedback on its new ability-to-repay final rule during a Jan. 10 mortgage policy field hearing in Baltimore. Industry participants and some consumer advocates responded favorably to the final rule and its qualified mortgage provisions. However, one consumer advocate warned that the structure of QM could lead to abuses in the prime lending market. Read on for the details.
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Rules are ‘issued’ when they are published on the CFPB’s website, bureau says
Posted Date: Monday, January 14, 2013
The Consumer Financial Protection Bureau is expected to finalize a number of important mortgage rules this month, and the bureau let the public know that a final rule released on the CFPB’s website is considered officially issued even if the rule has not been released by the Federal Register. Read on for the details.
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Banking group critiques stay-at-home spouse CARD Act rule
Posted Date: Monday, January 14, 2013
A major banking trade group signaled support for a Consumer Financial Protection Bureau proposal intended to ensure that stay-at-home spouses have access to credit cards. The American Bankers Association said it “strongly approves the direction of the proposal.” However, the ABA offered a number of suggestions the group said would address practical considerations and facilitate compliance.
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Key Basel III liquidity measure revised to include residential MBS
Posted Date: Monday, January 14, 2013
The Basel Committee on Banking Supervision revised a component of its Basel III reforms, permitting banks to include certain residential mortgage backed securities in the calculation of a key liquidity measure. Read on for the details.
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CFPB finalizes escrow requirements for higher-priced mortgages
Posted Date: Monday, January 14, 2013
The Consumer Financial Protection Bureau finalized rules requiring creditors to establish escrow accounts for certain mortgage transactions. The rule implements provisions of the Dodd-Frank Act intended to help ensure that consumers set aside funds to pay property taxes, and premiums for homeowners insurance, and other mortgage-related insurance required by the creditor.
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Bureau finalizes rule to expand HOEPA protections
Posted Date: Friday, January 11, 2013
The Consumer Financial Protection Bureau finalized key rules implementing Dodd-Frank’s expansion of the types of mortgage loans that are subject to the protections of the Home Ownership and Equity Protection Act.
When the rule was proposed last year, industry participants voiced concern that a separate proposal regarding the manner in which APR is calculated could further broaden HOEPA coverage and restrict borrowers’ access to credit. Read on to learn about the final rule and what the bureau said about the HOEPA/APR issue.
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CFPB releases QM final rule
Posted Date: Thursday, January 10, 2013
The housing finance sector’s long wait for one of Dodd-Frank’s most highly-anticipated final rules is at an end. The Consumer Financial Protection Bureau released its ability-to-repay rule on Jan. 10. The rule implements Dodd-Frank provisions requiring mortgage lenders to verify and document their customers’ ability to repay before extending credit. Read on to learn about the CFPB’s solutions to questions regarding the structure of QM.
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CFPB, FTC receive authority to enforce Military Lending Act provisions
Posted Date: Tuesday, January 8, 2013
A defense spending package recently signed into law by President Barack Obama includes enhanced protections for service members who use payday loans and other higher-cost credit products. The amendments to the Military Lending Act empower the Consumer Financial Protection Bureau and the Federal Trade Commission to enforce a 36-percent rate cap and include other protections for loans made to service members. Read on for the details.
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OCC extends compliance date for portions of its lending limits rule
Posted Date: Tuesday, January 8, 2013
The Office of the Comptroller of the Currency is extending the compliance date for the application of its lending limits rule to certain credit exposers arising from derivatives and securities financing transactions.
The OCC initially said banks would be expected to comply with certain Dodd-Frank mandated changes by Jan. 1. The agency later announced plans to set an April compliance date. However, a final rule released on Dec. 31 established an even longer compliance period. Read on to learn about the new compliance date.
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CFPB releases updated rulemaking agenda
Posted Date: Tuesday, January 8, 2013
The Consumer Financial Protection Bureau made public its target date for the completion of final rules integrating the mortgage disclosures required under the Real Estate Settlement Procedures Act and the Truth in Lending Act. Read on for the date and to learn about other CFPB rulemaking initiatives.
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Durbin Amendment’s impact on community institutions discussed in government report
Posted Date: Tuesday, January 8, 2013
The Federal Trade Commission found no evidence that payment network companies have taken steps to diminish community institutions’ ability to compete with larger issuers in the wake of Dodd-Frank’s new debit card rules, the agency said in a recent report. However, the commission said it will watch for any potential instances where large institutions collude with the networks to hamper such competition. Read on to learn about the FTC’s efforts to implement Dodd-Frank’s debit card provisions.
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Court considers regulatory cost-benefit obligations
Posted Date: Tuesday, January 8, 2013
A regulator that has come under fire for its assessment of the costs and benefits associated with its rulemakings scored a legal victory. Two business associations challenged a Commodity Futures Trading Commission rule related to commodity pool operators and commodity trading advisors, arguing the agency extended its regulatory reach to certain derivatives trading firms without sufficient explanation. Read on to learn what a federal judge said about the CFTC’s cost-benefit analysis obligations.
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Banks may apply for Section 716 transition periods under OCC guidance
Posted Date: Tuesday, January 8, 2013
Banks that are or may become swap dealers can request transition periods to comply with Dodd-Frank’s swaps entity bailout provisions under guidance issued by the Office of the Comptroller of the Currency. The transition periods are mandated by Section 716 of the Dodd-Frank Act, which is better known for its provisions requiring banks to “push out” certain swaps to affiliates.
Section 716(f) provides that regulators shall permit an initial transition period of up to two years, as appropriate, for insured depository institution swap entities to divest or cease certain swap activities. The OCC’s notice said the agency will consider such requests favorably if those requests meet certain requirements.
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Broker-dealers to search for lost holders of securities under SEC rule
Posted Date: Tuesday, January 8, 2013
The Securities and Exchange Commission unanimously approved new rules requiring broker-dealers to conduct searches for holders of securities with whom they have lost contact.
A similar rule already applied to recordkeeping transfer agents, who are the intermediaries between the clearing house and the broker-dealer. The Dodd-Frank Act tasked the SEC with extending the application of this rule to broker dealers so that broker-dealers have the same obligation.
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2013 sees dawn of swap dealer registration, real-time reporting
Posted Date: Friday, January 4, 2013
Both real-time public reporting of swap transactions and swap dealer registration began as 2012 came to a close, the Commodity Futures Trading Commission said. Implementation of these Dodd-Frank requirements represents a milestone for the CFTC.
As of Dec. 31, 65 entities –– including the largest domestic and international financial institutions dealing in swaps with U.S. firms –– had submitted applications and became provisionally registered as swap dealers.
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CFTC final rule softens futures market tape recording requirements
Posted Date: Friday, January 4, 2013
The Commodity Futures Trading Commission approved a final rule extending debated swaps recordkeeping requirements to the futures market. As proposed, the rule would have required industry participants to record and retain oral communications that lead to the execution of a transaction in a commodity interest or a cash commodity. Read on to learn what changes the CFTC made in the final rule.
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Card Act gets a closer look from CFPB
Posted Date: Friday, January 4, 2013
The Consumer Financial Protection Bureau is seeking public comment on how the Credit Card Accountability Responsibility and Disclosure Act has impacted the daily lives of consumers and the behavior of the credit industry. Read on to learn what information the bureau is seeking.
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Risks facing community banks outlined in new report
Posted Date: Friday, January 4, 2013
A report from the Office of the Comptroller of the Currency finds that banks continue to suffer from the collapse of the housing market and new demands arising from increased regulation. The OCC’s Semiannual Risk Perspective Report warns that the search for profitability may lead institutions of all sizes to assume inappropriate levels of risk. Read on for the details.
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Divided CFTC goes back to work on cross-border policy
Posted Date: Friday, January 4, 2013
The Commodity Futures Trading Commission must smooth numerous internal and external divisions as it works to reach firm conclusions about the cross-border application of certain Dodd-Frank swaps provisions ahead of a July deadline.
Dodd-Frank’s cross-border application has been a source of concern for industry participants and lawmakers who urged the CFTC to harmonize its rules with similar reforms being crafted by international regulators. The CFTC approved an exemptive order providing temporary relief from certain cross-border applications of Dodd-Frank requirements on Dec. 21, just days ahead of a Jan. 1 deadline. Commission leaders said the relief period provides time for the CFTC to work with foreign regulators as they implement comparable requirements.
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CFPB seeks comment on proposed consumer survey
Posted Date: Friday, January 4, 2013
The Consumer Financial Protection Bureau is soliciting comments concerning its proposed information collection titled, “Clearance for Consumer Attitudes, Understanding, and Behaviors with Respect to Financial Services and Products.” Read on for additional information and comment deadline.
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Benefits of regulatory coordination, cost-benefit analysis extolled in GAO report
Posted Date: Wednesday, January 2, 2013
Federal agencies working to implement provisions of the Dodd-Frank Act generally consider, but typically do not quantify or monetize the benefits associated with their rules, a Government Accountability Office survey determined. The GAO’s review of 54 regulations also found that while most agencies profess a desire to adhere to the spirit of certain non-mandatory guidelines intended to ensure comprehensive cost-benefit analysis, the rule makers often fail to follow key elements of this guidance in their regulatory analyses.
The report reiterated the GAO’s call for federal regulators to more fully incorporate guidance from the Office of Management and Budget into their rulemaking policies. The government’s watchdog agency also urged the Financial Stability Oversight Council to work with federal financial regulators to establish formal interagency coordination policies for rulemaking.
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HMDA asset-size exemption threshold increased
Posted Date: Wednesday, January 2, 2013
The Consumer Financial Protection Bureau issued a final rule adjusting the asset-size exemption threshold for banks, savings associations and credit unions under Regulation C, which implements the Home Mortgage Disclosure Act.
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CFPB to scrutinize student lenders
Posted Date: Wednesday, January 2, 2013
Student lenders are the subject of the Consumer Financial Protection Bureau’s latest examination field guide. The CFPB has authority to supervise large banks and nonbanks that make private student loans. The agency said the procedures released on Dec. 17 apply to both types of lenders.
In addition to the release of its student lending examination manual, the bureau said it is developing a suite of consumer tools intended to help students and families shop for loans, compare aid offers, manage money while in college and navigate repayment options.
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Federal court enters order in case against debt-relief service provider
Posted Date: Wednesday, January 2, 2013
A federal district court entered a stipulated final judgment and order against a debt-relief service provider, after a Consumer Financial Protection Bureau investigation found evidence the company had violated the Federal Trade Commission’s Telemarketing Sales Rule, the Dodd-Frank Act and the laws of various states.
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Lawmakers, industry experts sound off on Volcker Rule as final regulations loom
Posted Date: Wednesday, January 2, 2013
Republicans and industry participants took parting shots at Dodd-Frank’s ban on banks’ proprietary trading during the House Financial Services Committee’s final hearing before representatives headed home for their holiday break. Opponents of the Volcker Rule –– named after former Federal Reserve Chairman Paul Volcker –– said Dodd-Frank’s provisions could ultimately harm financial markets, businesses, investors and job creation.
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International remittance transfer rule revisions proposed
Posted Date: Wednesday, January 2, 2013
The Consumer Financial Protection Bureau published a proposal in the Federal Register on Dec. 31 to refine a final rule issued by the bureau earlier in 2012 that implements section 1073 of the Dodd-Frank Act regarding remittance transfers. The proposal amends subpart B of Regulation E, which implements the Electronic Fund Transfer Act. Read on to learn what the bureau targeted in its proposed revision.
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