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News By Edition
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Dodd Frank Update Monthly Edition
Dodd Frank Update November 2016
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Industry reacts as PHH wins appeal over CFPB
Posted Date: Tuesday, October 11, 2016
It took more than six months from the time of oral arguments for the D.C. Circuit Court of Appeals to hand down its decision in PHH Corp. v. Consumer Financial Protection Bureau, but the court’s ruling turned heads across the industry.
In its 110-page ruling the court deemed the bureau to be unconstitutionally structured, and moved to remedy the situation rather than halt its operations. In addition, the court sided with PHH Corp. on other aspects of its appeal.
Read on for details of the decision, along with reaction from the CFPB and the industry.
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Warren: That's not what I said about CFPB
Posted Date: Tuesday, October 11, 2016
Sen. Elizabeth Warren (D-Mass.) responded to the D.C. Circuit Court of Appeals’ ruling that determined the CFPB was unconstitutionally constructed.
Warren, one of the architects of the bureau, is cited in the court’s ruling, which says “As proposed by then-Professor and now-Senator Elizabeth Warren, the CFPB was to be another traditional, multi-member independent agency.”
But that isn’t what she said, Warren claims. Read on for the details.
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Wells Fargo CEO Stumpf resigns
Posted Date: Wednesday, October 12, 2016
Wells Fargo CEO John Stumpf has resigned, a month after the bank settled with federal and Los Angeles officials over the fraudulent opening of unauthorized consumer accounts.
The bank announced the move late Wednesday and said its board of directors had elected President and Chief Operating Officer Tim Sloan to succeed Stumpf as CEO.
Stephen Sanger, the lead director of the board, will serve as the board’s non-executive chairman, while independent director Elizabeth Duke will serve as vice chair.
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Legislators react to Stumpf retirement
Posted Date: Thursday, October 13, 2016
Across the aisles, legislators who began investigating Wells Fargo for its fraudulent sales practices have been reacting to the announcement that CEO John Stumpf is retiring.
Leading the way was Sen. Elizabeth Warren (D-Mass.), who was the first on Capital Hill to call for Stumpf to resign.
Read on to see what Warren and other congressional members have to say.
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Sloan, Wells try to pivot
Posted Date: Friday, October 14, 2016
Wells Fargo announced its third-quarter earnings Friday, with new CEO Tim Sloan on a call with analysts of the company to discuss results.
The bank’s earnings improved from the previous quarter, but the majority of the discussion centered on the path forward for the bank in the way of fraudulent sales practices which led to the unauthorized opening of as many as 2 million customer accounts.
The question-and-answer session got testy at times. Read on for details.
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New Wells CEO: ‘I feel sorry’ for Stumpf
Posted Date: Thursday, October 13, 2016
In his first interview after being named CEO, Wells Fargo’s Tim Sloan told CNBC that the decision of former CEO John Stumpf to resign was a sad one, and that he felt sorry for his friend.
Sloan also said he was disappointed with the House and Senate hearings at which Stumpf was grilled over the fraudulent sales practices that led to nearly 2 million unauthorized accounts being opened for customers. And while it is a sad moment when Stumpf is retiring, Sloan is looking forward to being CEO.
Read more from the first interview with the new CEO, as well as background on what Sloan knew or didn’t know about the fraudulent sales practices in the departments under his report.
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Fitch downgrades Wells Fargo’s outlook
Posted Date: Wednesday, October 5, 2016
In a potentially damaging blow to its credit standing, Fitch Ratings has downgraded Wells Fargo’s outlook, as a result of the “potential reputational damage” from the recent fraudulent action by its employees.
Although Fitch affirmed Wells’ current AA- rating, it warned of the potential for a downgrade, which would be the first time since 1996 that the bank had fallen below the coveted AA status.
Read on for more details from Fitch’s report.
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Jamie Dimon defends Stumpf, rips media
Posted Date: Monday, October 3, 2016
In an interview with CNBC, JPMorgan Chase CEO Jamie Dimon called Wells Fargo CEO John Stumpf “a quality human being,” and asked for cooler heads to prevail in issues surrounding big banks.
Dimon also took a shot at the media, blaming them for fueling the Wells Fargo controversy.
Read on for the details.
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Ranking member says she'll work to break up Wells
Posted Date: Thursday, September 29, 2016
After spending three hours in front of the Senate Banking Committee last week, Wells Fargo CEO John Stumpf was back on Capital Hill on Thursday for a four-hour session of questioning from the House Financial Services Committee.
And while the general tone of the congressional members was more congenial than a week earlier, the CEO and his bank found itself in as much hot water as ever.
Ranking member Maxine Waters (D-Calif.) said she would work to break up the bank, while two Republicans called on Stumpf to resign. Read on for more details.
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Fed launches big bank probe in wake of Wells
Posted Date: Wednesday, September 28, 2016
Federal Reserve Chairwoman Janet Yellen told a House Financial Services Committee hearing that the regulator has launched a probe into all of the largest banking organizations of their compliance regimes in the wake of the recent Wells Fargo enforcement.
The announcement came as one Democratic representative pushed Yellen to break up Wells Fargo, saying too big to fail was too big to exist.
As the Financial Services Committee prepares to host Wells Fargo CEO John Stumpf on Thursday, read on for details of Yellen’s appearance and her reaction to the Wells Fargo actions.
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Another rough day for Wells Fargo
Posted Date: Wednesday, October 5, 2016
Nearly a month after Wells Fargo announced a settlement with regulators and Los Angeles officials over fraudulent actions concerned unauthorized accounts, the news continues to roll out.
Another city suspended business with the bank, this time Chicago, while a senator called for an investigation into fraudulent unauthorized business accounts, and a group of senators asked the attorney general’s office to hold individual senior executives criminally liable if they were found to have broken the law.
Read on for more details from the day.
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Clinton doubles down on Wells Fargo
Posted Date: Monday, October 3, 2016
Democratic presidential candidate Hillary Clinton stepped up her pressure on Wells Fargo with a speech Monday chastising the bank for bullying employees and its outrageous behavior in opening as many as 2 million unauthorized accounts for its customers.
In a speech that tied the corporate abuses to taxes and the report of Republican nominee Donald Trump’s 1995 federal tax filing, Clinton said she would press for more reforms to address corporate abuses and too big to fail.
Read on for details of the speech and a California House member calling on CEO John Stumpf to resign.
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Seattle latest to break with Wells Fargo
Posted Date: Monday, October 10, 2016
The news continues to roll in for Wells Fargo, as another city announced its was severing business dealings with the bank, a group of religiously affiliated investors called on the company to make executive changes, and a group of senators pressed the company for more details on its recent enforcement action over repossessing servicemembers cars illegally.
Seattle joins states such as California and Illinois and cities such as Chicago and Philadelphia in canceling business with the bank.
Senators writing on the servicemember violations asked whether anyone had taken personal responsibility for the violations, among other questions.
Read on for all the details.
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CFPB fines for-profit college $8 million
Posted Date: Tuesday, September 27, 2016
Bridgepoint Education Inc., allegedly deceived students into taking out private student loans that cost more than they were advised, the bureau said. The consent order, issued via administrative proceeding, is the bureau’s third enforcement action against a for-profit educational institution.
The Bridgepoint consent order marks the CFPB’s third major action against a for-profit educational institution, and things ended badly for the previous two respondents.
Read on for details of the latest enforcement and what might be in store in the future for Bridgepoint.
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Embattled Wells settles with DOJ
Posted Date: Friday, September 30, 2016
Wells Fargo Bank has agreed to a settlement with the Department of Justice over allegations that it repossessed cars from servicemembers without first obtaining a court order.
The announcement comes just three weeks after Wells Fargo was penalized by federal and Los Angeles authorities for defrauding customers by opening an estimated 2 million unauthorized accounts.
Read on for details of the latest settlement by the bank.
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ABA picks new chairman, officers
Posted Date: Wednesday, October 19, 2016
At its annual convention in Nashville, Tenn., the American Bankers Association named a new chairman, along with other officers for the board of directors.
Dororthy Savarese, the president and CEO of Cape Cod Five Cents Savings Bank in Massachusetts, takes over as chairman from Georgia Bank & Trust CEO R. Daniel Blanton.
Read on for more about Savarese and the rest of the board.
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Reputational risk hurting Wells Fargo
Posted Date: Wednesday, October 19, 2016
Analysts are taking a cautious to dim view of Wells Fargo’s future in the wake of the enforcement action against fraudulent sales practices at the bank.
Analysts aren’t concerned so much with the balance sheet for Wells Fargo as they are about the potential reputational risk that the company could incur as fallout from the enforcement continues.
Read on for all the details.
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2015 HMDA data paints picture of rosy mortgage market
Posted Date: Tuesday, October 18, 2016
Home Mortgage Disclosure Act data for last year is in, and although mortgage originations and refinances, home prices, credit conditions and new housing construction continued their upward swing thanks to the general housing market recovery, disparities among racial and ethnic borrowers persist, and obtaining credit remains a challenge for borrowers with low credit scores.
Here’s what the Federal Financial Institutions Examination Council had to say about 2015’s HMDA data.
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Wells competitors discuss sales practices
Posted Date: Tuesday, October 18, 2016
In the wake of the enforcement action against Wells Fargo for fraudulent sales practices, two of its competitors were asked about their sales practices as they announced quarterly earnings.
Bank of America and JPMorgan both addressed their practices and whether there should be concern that they might end up in similar situations to Wells Fargo.
Read on for details from their calls.
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Fintech Playbook unveiled at ABA convention
Posted Date: Monday, October 17, 2016
The American Bankers Association (ABA) and Accenture released a Fintech Playbook for the industry at the ABA convention in Nashville, Tenn.
The playbook is designed to help bankers build and executive a strategic plan to leverage new technologies and remain competitive, ABA said in a news release.
Read on for more details.
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Lenders One survey identifies top TRID challenge
Posted Date: Monday, October 17, 2016
A year after the implementation of the TILA-RESPA Integrated Disclosure (TRID) rule, a survey conducted by the Lenders One Cooperative found the top challenge with TRID compliance.
The survey was conducted in August at the Lenders One 2016 Summer Conference. At that time, 58 percent of respondents were concerned about the impact of the presidential election on the mortgage industry.
Read on for details of the TRID findings, as well as other insight from the survey.
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Ohio, Sacramento break with Wells
Posted Date: Monday, October 17, 2016
Ohio became the fifth state, and the first under a Republican administration, to suspend business dealings with Wells Fargo.
Gov. John Kasich said the bank’s culture “was compromised by greed” in announcing a one-year ban on debt offerings and financial services contracts with the bank.
Sacramento became the fourth city government to do likewise, joining Chicago, Philadelphia and Seattle. Read on for all the details, including reaction from California and Connecticut on whether the recent CEO resignation changes their business suspensions with Wells Fargo.
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How to stop the CFPB from functioning
Posted Date: Friday, October 14, 2016
The D.C. Circuit Court of Appeals’ ruling that the Consumer Financial Protection Bureau (CFPB) is unconstitutionally structured has made the CFPB director now directly responsible to the president.
By doing so, the president can bring the CFPB and its activities to halt, and much more easily than you might think. Although the idea that the president who appointed Richard Cordray as the first director of the CFPB might make the idea laughable, a change in the Oval Office could bring the bureau to a halt.
Read on for details of how easily the wheels of the CFPB could be ground to a halt.
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TRID comment deadline is Tuesday
Posted Date: Friday, October 14, 2016
The deadline for submitting comments on the re-proposal of the TILA-RESPA Integrated Disclosure (TRID) rule is Oct. 18, so any interested parties are encouraged to make their voice heard quickly. Read on for details on how to make and submit comments to the rule.
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Hubzu adds RentRange rental income estimates
Posted Date: Wednesday, October 12, 2016
Hubzu, a leading real estate auction marketplace, has launched a new feature to support investors seeking to purchase rental properties. The Hubzu Real Estate Marketplace now displays low, median and high estimates of potential rental income through its integration with RentRange, one of the premier providers of market data and analytics for the single-family rental industry.
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ICBA: Ruling is good first step
Posted Date: Tuesday, October 11, 2016
News of the D.C. Circuit Court of Appeals’ decision that the Consumer Financial Protection Bureau (CFPB) was unconstitutionally structured was received well by the community banking industry.
Joe Gormley, Independent Community Bankers of America assistant vice president and regulatory counsel, told Dodd Frank Update that the court’s ruling fit with the association’s position.
Read on for details of what ICBA had to say.
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Congressional leaders weigh in on CFPB ruling
Posted Date: Tuesday, October 11, 2016
Congressional leaders from both sides of the aisle responded to the news that the D.C. Circuit Court of Appeals had ruled the Consumer Financial Protection Bureau was unconstitutionally structured.
Rep. Jeb Hensarling (R-Texas) called it a good day for democracy and the Constitution, while Sen. Sherrod Brown (D-Ohio) said evidence of the bureau’s structure working could be seen in its recent Wells Fargo enforcement action.
Read on for more details.
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Fed may lighten CCAR burden for smaller banking firms
Posted Date: Tuesday, October 11, 2016
The Board of Governors of the Federal Reserve System is seeking public comment on a proposed rulemaking that is intended to relieve some of the regulatory burden of its annual Comprehensive Capital Analysis and Review process for some financial institutions.
Read on to find out how the Fed plans to tweak some CCAR requirements for certain firms, and how you can comment on its proposal.
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NAFCU, CUNA team up to fight ICBA lawsuit
Posted Date: Tuesday, October 11, 2016
Two of the leading trade associations in the credit union industry announced they would work together to fight a community banking association’s lawsuit against the credit union regulator.
The National Association of Federal Credit Unions and the Credit Union National Association recently announced they would join forces to challenge a lawsuit filed by the Independent Community Bankers of America against the National Credit Union Administration over its recently adopted member business lending rule.
Read on for the details.
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House Democrats press for strong final payday rule
Posted Date: Tuesday, October 11, 2016
As the comment period for the Consumer Financial Protection Bureau’s (CFPB) proposed rule on small-dollar and payday lending came to a close last week, more than 100 House Democrats, led by Rep. Maxine Waters (D-Calif.) sent a letter to the bureau urging it to adopt a strong final rule and close loopholes that harm consumers.
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Industry survivor shares her story
Posted Date: Tuesday, October 11, 2016
For the fifth consecutive year, October Research, LLC is raising money for the Stefanie Spielman Fund for Breast Cancer Research at The Ohio State University Comprehensive Cancer Center –Arthur G. James Cancer Hospital and Richard J. Solove Research Institute. 10 percent of revenue from new subscriptions to all of our publications will be donated to the fund through Oct. 17. To help us with this worthy cause, industry friend Leslie Wyatt, a breast cancer survivor, shared her story.
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Wells realigns management, creates new payments group
Posted Date: Monday, October 10, 2016
Wells Fargo announced Monday its first executive changes since settling an enforcement action in September for fraudulent actions by some employees.
Highlighting the announcement are three new senior executive appointees to Wells Fargo’s Operating Committee.
The bank also announced it will create a new group focused on digital payments. Read on for the details.
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Survey: ‘Beat of regulatory drum’ slows for community banks
Posted Date: Friday, October 7, 2016
Community bankers remain concerned about their regulatory burden, but there are hints of a possible plateau.
That's the findings of the fourth annual survey of community bankers recently conducted by the Federal Reserve System and the Conference of State Bank Supervisors.
Find out which regulations posed the most burden for community banks in the last year.
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Wells: We’ll work with officials, agencies
Posted Date: Thursday, October 6, 2016
Wells Fargo told Dodd Frank Update that business accounts which might have been fraudulently opened without authorization were contained to the bank’s retail banking unit.
But after a call from Sen. David Vitter (R-La.) and Rep. Steve Chabot (R-Ohio) for a federal investigation, the bank said it was ready to work with officials and agencies “to address requests in a timely manner.”
In other news, a Charlotte newspaper and a Texas businessman suggested the fraudulent activities could have occurred in the Wells Fargo Advisors business unit as well, while House Democrats asked federal regulators to strengthen clawback rules in light of Wells Fargo’s activities.
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Vitter: Wells fraud spilled into small businesses
Posted Date: Wednesday, October 5, 2016
Sen. David Vitter (R-La.) has launched an investigation into potential fraudulent activity by Wells Fargo employees that led to unauthorized accounts being opened for small businesses, in addition to consumers.
Vitter asked Wells Fargo CEO John Stumpf at a Senate Banking Committee hearing about the potential for fraudulent activities in business accounts, and Stumpf said, to the best of his knowledge, that fraud was limited to consumer accounts.
Vitter wrote Stumpf to request information on business activity and has asked the Small Business Administration’s (SBA) inspector general to investigate Wells Fargo’s participation in SBA lending programs. Read on for the details.
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Two years later, prepaid card rule looks same
Posted Date: Wednesday, October 5, 2016
Though it took nearly two years to finalize, the rule for prepaid card accounts issued today by the Consumer Financial Protection Bureau looks substantially like the proposal issued in November 2014.
The bureau said it listened to the more than 65,000 comments it received on the proposal, and did make substantive changes to aspects of its disclosure forms. Yet much of the policy decisions that drove the rule through its proposal remain intact.
Read on for a look into the rule, with insight from the CFPB about its decision-making for the prepaid card industry, particularly in light of high-profile outages over the past two years.
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Brown to offer bill keeping Wells from enforcing arb clauses
Posted Date: Tuesday, October 4, 2016
Sen. Sherrod Brown (D-Ohio) said he will introduce legislation designed to prevent Wells Fargo from enforcing arbitration clauses for customers who want to sue the bank over unauthorized accounts.
The legislation would provide existing Wells customers to sue the bank even if they previously signed contacts with arbitration clauses in past legitimate accounts.
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Illinois suspends $30 billion in Wells Fargo business
Posted Date: Monday, October 3, 2016
Illinois State Treasurer Michael Frerichs announced plans to suspend $30 billion in investment activity with Wells Fargo for one year, along with the use of the company as a broker-dealer for investments.
Calling Wells Fargo's actions "downright shameful," Frerichs said he ordered an audit into whether other illegal activities by Wells Fargo violated Illinois’ unclaimed property laws.
Read on for all the details.
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It’s October, and there’s still no PHH ruling
Posted Date: Friday, September 30, 2016
In a potentially landmark case for the Consumer Financial Protection Bureau (CFPB), PHH Corp. appealed a decision by CFPB Director Richard Cordray that penalized the company $109 million.
The appeal was heard in April by the District of Columbia Circuit Court of Appeals, and was expected to be issued by the end of the summer. Yet as October begins, the industry is still awaiting a decision on the case from the three-judge appellate court.
How important is the ruling? Will it come soon? Read on for details.
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More states, cities to push Wells for reform
Posted Date: Friday, September 30, 2016
Days after California’s state treasurer announced he was suspending some business with Wells Fargo for a year, other state treasurers have announced that are taking measures to handle business with Wells Fargo, as well. Read on for the details.
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California treasurer cuts off Wells Fargo
Posted Date: Wednesday, September 28, 2016
California State Treasurer John Chiang said his office was suspending some transactions with Wells Fargo following its recent enforcement action over fraudulent activities involving 2 million customer accounts.
The treasurer also said he would use his position on the board of the nation’s two largest pension funds to agitate for changes at Wells Fargo, including executive clawbacks for those involved with recent fraudulent actions, and the separate of the CEO and chairman of the board positions.
Read on for more details.
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NCUA settles with Royal Bank of Scotland for $1.1 billion
Posted Date: Tuesday, September 27, 2016
The National Credit Union Administration announced it had reached a settlement with Royal Bank of Scotland for $1.1 billion to settle legal claims arising from the sale of faulty mortgage-backed securities to two corporate credit unions.
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Stumpf back on Hill, regulators are not
Posted Date: Tuesday, September 27, 2016
Wells Fargo CEO John Stumpf is back on Capital Hill tomorrow to discuss the practices and enforcement action taken against his bank, but this time he won’t be joined by representatives of federal regulators.
It has been a busy week for the bank since Stumpf went before the Senate Banking Committee. Lawsuits have been filed, additional regulators are discussing investigations into the bank and its practices, and top executives have agreed to forfeit millions in bonuses.
Read on for details of what lies ahead.
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Meet the FDIC’s new Affordable Mortgage Lending Guide
Posted Date: Tuesday, September 27, 2016
The Federal Deposit Insurance Corp. has released the first installment of what will be a three-part guide on affordable mortgage credit options for community banks. Part I covers programs from the Department of Housing and Urban Development, the Federal Housing Administration, the Department of Agriculture, the Department of Veterans Affairs, the Treasury Department’s Community Development Financial Institutions Fund and Fannie Mae and Freddie Mac.
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Subcommittee examines NAR, ICBA-backed bills
Posted Date: Tuesday, September 27, 2016
The House Financial Services Subcommittee on Financial Institutions and Consumer Credit conducted a hearing Tuesday on access to credit.
The hearing featured a panel of three speakers and addressing two bills backed by the National Association of Realtors and two supported by the Independent Community Bankers of America.
Read on for details of the legislation that addressed the potential access of credit to consumers, among other items.
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