News By Edition

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.

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.

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.”   

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.  

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. 

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.