Treasury

As the Senate Banking Committee engaged in discussion regarding potential housing finance reforms, President Donald Trump signed a presidential memorandum outlining his administration’s goals for enacting sweeping reforms to the secondary market.

The financial services industry expressed support for the administration’s stated goals of ending the conservatorship of Fannie Mae and Freddie Mac and promoting competition in the secondary market while providing taxpayer protections.

Find out more details about the administration’s reform priorities and the industry’s take on the matter.

The Senate Banking Committee recently heard testimony from two nominees to join the National Credit Union Administration (NCUA) Board of Directors – Rodney Hood and Todd Harper. Both expressed interest in aligning NCUA’s regulatory approach with that of other federal agencies.

The committee also considered Trump’s nominees to become the Treasury Department’s assistant secretary of financial institutions – Bimal Patel – and head up the Federal Housing Finance Agency – Mark Calabria – during the hearing.

Find out what they had to say during the hearing.

By clarifying the terms of its rule implementing statutorily mandated pass-through tax deductions for institutions covered under Subchapter S of the Internal Revenue Service code, the Treasury Department addressed concerns raised by community bank advocates after the release of its previously proposed rule on the matter.

Subchapter S banks and other pass-through entities are allowed to take a 20 percent deduction on “qualified business income” under Section 199A of the Tax Cuts and Jobs Act.

Find out what concerns related to the rule still need to be addressed.

Competition is a main driving force behind the free market. For mortgage lenders, the influx of competition in recent years has been well-documented from a business perspective but the economic implications – particularly to interest rates – could warrant a closer look.   

Fannie Mae Chief Economist Doug Duncan spoke with Dodd Frank Update about factors that could cause rates to increase in the foreseeable future, as well as several factors industry participants should monitor to be as prepared as possible for may be on the horizon. 

Read on to learn more.

The partial federal government shutdown will not directly impact most financial regulatory bodies but will impact various federal lending programs.

Multiple agencies, including the Department of Housing and Urban Development and the Department of the Treasury, have released contingency plans detailing how they will allocate their limited staffs for the duration of the shutdown to ensure fulfillment of essential functions.

Find out more details about the shutdown’s impact on federal agencies.

The Treasury Department recommended against getting the U.S. Postal Service (USPS) involved in the banking business in a report exploring possible methods of generating more revenue for the USPS.

The financial industry long has been among those opposed to postal banking services, which once were standard, whereas some politicians have voiced support for the idea.

Find out why many believe the concept is a bad idea and what arguments its supporters present.

Community Reinvestment Act (CRA) requirements would be strengthened and extended to cover credit unions and nonbank mortgage companies under a new bill sponsored by Sen. Elizabeth Warren (D-Mass.).

The legislation’s introduction comes as financial trade organizations have continued to see progress toward long-advocated CRA updates intended to lessen the regulatory burden it places on financial institutions. A Moody’s study indicated the bill could have positive economic effects in addition to helping low- and middle-income families.

Find out more details about the varied opinions on the new legislation.

Determining that its market activities did not pose significant systemic economic risk, the Financial Stability Oversight Council (FSOC) announced that Zions Bank will not be treated as a designated nonbank financial company upon completion of its merger with Zions Bancorporation.

In its final decision, FSOC noted arguments Zions stressed in a written submission advocating for the regulators not to subject the company to enhanced regulatory scrutiny reserved for large nonbank financial institutions, and argued that any two entities could structure a merger that subverted Section 117 of the Dodd-Frank Act.

Find out more details about the merger and the council’s decision.

State National Bank of Big Spring, Texas, recently joined with the Competitive Enterprise Institute (CEI), and the 60 Plus Association in petitioning the Supreme Court to issue summary judgment regarding a lawsuit initially filed in 2012 against former Treasury Secretary Jacob Lew, making a case for the abolishment of the bureau and every regulation enacted by it.

The fact that D.C. Circuit Court of Appeals Judge Brett Kavanaugh ruled on the case in 2015, gave a dissenting opinion in the PHH Corp. v. CFPB case asserting that the bureau is unconstitutionally structured and is awaiting Senate confirmation to join the Supreme Court adds significant intrigue to the matter.

Get more details about the lawsuit and what Kavanaugh previously said about its merits.

The future of the Consumer Financial Protection Bureau’s (CFPB) payday lending rule has been mired in uncertainty since acting director Mick Mulvaney’s January announcement that he intended to “revisit” it, and seemed quite bleak after Mulvaney filed an amicus brief in June supporting the plaintiffs in a case challenging the rule’s validity.

Independent Community Bankers of America (ICBA) Assistant Vice President and Regulatory Counsel Rhonda Thomas-Whitley told Dodd Frank Update the fact that Kathy Kraninger’s nomination to the director’s chair at the bureau is still pending full Senate approval is reason enough for any interested party reluctant to make any predictions about the likelihood of such a move.

Find out more details about considerations that could work against the rule’s chances of surviving reconsideration by the bureau.