Skip to main content
Menu Icon
Close

InfoBytes Blog

Financial Services Law Insights and Observations

Filter

Subscribe to our InfoBytes Blog weekly newsletter and other publications for news affecting the financial services industry.

  • Democratic Lawmakers Seek Information Regarding Independent Foreclosure Review Settlements

    Lending

    On January 31, Senator Elizabeth Warren (D-MA) and Representative Elijah Cummings (D-MD), House Oversight Committee Ranking Member, sent a letter to the Federal Reserve Board and the OCC seeking documents and information regarding the regulators’ decision to enter into settlements with certain mortgage servicers subject to consent orders issued in April 2011 to (i) resolve allegations that the firms engaged in improper mortgage servicing and foreclosure practices and (ii) end the Independent Foreclosure Review process established by the prior consent orders. The lawmakers are seeking (i) all documents regarding the performance of the independent consultants engaged by the servicers to conduct the foreclosure reviews, (ii) all documents created by the servicers or the consultants to update the regulators on the status of the foreclosure review process, (iii) all documents compiled by the regulators indicating the total amount of settlement funds paid to each consultant, (iv) the number of borrowers who requested review, by gender, race, zip code, and property value, (v) the total number of reviews initiated by each contractor, and (vi) the average time each contractor required to complete a review of a borrower’s file.

    On the same day, House Financial Services Committee Ranking Member Maxine Waters (D-CA) sent a separate letter requesting that the regulators ensure the final agreements entered in lieu of the foreclosure reviews include certain specific provisions, including (i) reordering of the matrix categories, (ii) requirements that principal reduction be provided as a form of indirect relief, and (iii) appointment of an independent monitor. Representative Waters also seeks information about payments to the consultants and how the regulators decided on the $8.5 billion settlement amount. Finally, a recent report noted that Representative Carolyn Maloney (D-NY) initiated her own inquiry into the settlements and payments to the consultants. According to the report, the letter may be used to support a request that the regulators claw back some of the payments made to the consultants.

    Foreclosure Federal Reserve OCC U.S. Senate U.S. House

  • House Financial Services Committee Membership, Subcommittees Finalized

    Consumer Finance

    On January 22, House Financial Services Committee Chairman Jeb Hensarling (R-TX) announced the subcommittee assignments for the committee’s Republican members. Rep. Garrett (R-NJ) will again lead the subcommittee on Capital Markets and Government Sponsored Enterprises, while Rep. Capito (R-WV) remains as head of the subcommittee on Financial Institutions and Consumer Credit. Ranking Member Maxine Waters (D-CA) also recently announced as Ranking Members of those subcommittees Rep. Maloney (D-NY) and Rep. Meeks (D-NY), respectively, and released the full roster for each subcommittee. The subcommittee rosters reflect the new members joining the committee, including Reps. Barr (R-KY), Cotton (R-AR), Hultgren (R-IL), Mulvaney (R-SC), Pittenger (R-NC), Ross (Fla.), Stutzman (R-IN), and Wagner (R-MO) for the majority; and on the minority side Reps. Beatty (D-OH), Delaney (D-MD), Heck (D-WA), Foster (D-IL), Kildee (D-MI), Murphy (D-FL), Sewell (D-AL), and Sinema (D-AZ). Finally, earlier this month Chairman Hensarling announced majority staff positions, and followed with additional staff announcements on January 25, 2013.

    U.S. House

  • Congress Acts on Several Banking Bills, Two Set for President's Signature

    Consumer Finance

    On December 11, the U.S. Senate passed by voice vote two bills impacting bank supervision and compliance. The first, H.R.4014, amends the Federal Deposit Insurance Act to protect information submitted to the CFPB as part of its supervisory process. The bill provides CFPB-supervised institutions the same non-waiver of privilege protections already afforded to information submitted by supervised entities to federal, state, and foreign banking regulators. For more information about these issues, please see our recent Special Alert. The second bill, H.R. 4367, amends the Electronic Fund Transfer Act to remove the requirement that ATMs have an attached placard disclosing fees. The amended law will require only that fees be disclosed on the ATM screen. Both bills previously were passed by the U.S. House of Representatives and now go to the President. On December 12, the House passed  H.R. 5817, which would exempt from Gramm-Leach-Bliley Act (GLBA) annual privacy policy notice requirements any financial institution that (i) provides nonpublic personal information only in accordance with specified requirements, and (ii) has not changed its policies and practices with regard to disclosing nonpublic personal information from those included in its most recent disclosure. The bill now proceeds to the Senate. A fourth bill, S. 3637, which would extend the Transaction Account Guarantee program for two additional years, was blocked in the Senate on December 13, 2012. The program, which was established by the Dodd-Frank Act to provide unlimited deposit insurance for noninterest-bearing transaction accounts, will expire at the end of 2012 if legislators do not take further action to extend the program.

    CFPB Gramm-Leach-Bliley ATM U.S. Senate U.S. House

  • House Financial Services Subcommittees Hold Joint Hearing on Impact of Basel III Proposals

    Consumer Finance

    On November 29, two Subcommittees of the House Financial Services Committee held a joint hearing regarding the federal banking agency proposals to implement the Basel III international regulatory capital accords. As with a Senate hearing on the same topic last week, committee members focused bipartisan attention on the proposals’ potential impact on community banks and insurance companies that are holders of depository institutions. The committee also explored the interplay between the Basel III proposals and the pending rules to set forth the “qualified mortgage” standard and the “qualified residential mortgage” standard. The regulators promised lawmakers that they would carefully consider the concerns of community bankers. The regulators did not provide a timeline for their final rulemaking.

    FDIC Federal Reserve OCC Capital Requirements U.S. House

  • Republican House Members Elect Representative Hensarling Financial Services Committee Chairman, Representative Waters Expected to Fill Ranking Member Position

    Consumer Finance

    On November 28, the Republican caucus of the House of Representatives elected Representative Jeb Hensarling (R-TX) Chairman of the House Financial Services Committee for the 113th Congress, which will convene next year. Mr. Hensarling has served as the vice-chair of the Committee under Representative Spencer Bachus (R-AL) who could not retain the position due to caucus-imposed term limits. In a statement, Mr. Hensarling expressed his commitment to “end[ing] the phenomenon of ‘too big to fail’ and reinstat[ing] market discipline,” as well as reducing taxpayer risk and cutting the weight, volume, complexity, and uncertainty of federal regulations. Democrats reportedly are expected to elect Representative Maxine Waters (D-CA) to succeed retiring Representative Barney Frank (D-MA) as Ranking Member on the Committee.

    U.S. House

  • Banking Regulators Provide Guidance on Basel III Implementation Timeline, Congress Offers Additional Responses to Basel III Proposals

    Consumer Finance

    On November 9, the Federal Reserve Board, the OCC, and the FDIC announced that proposed rules to implement the Basel III regulatory capital accords will not take effect on January 1, 2013. The agencies cite the large volume of comments received in response to the proposed rules as the reason for the delay. Recently, members of three states’ congressional delegations joined others in submitting letters to the federal banking regulators in response to the proposed Basel III regulations. The letters all raise concerns about the potential disproportionate impact of the proposed rules on smaller, community and regional institutions, and challenge the attempt by regulators to apply international accords to all U.S. institutions regardless of size. Members of the Texas delegation focused on provisions that would require all unrealized gains and losses on available-for-sale securities to flow through to common Tier-1 equity, which the lawmakers believe will require community banks to divert capital resources from customer services and bank growth. Indiana Members added concerns about the effect of proposed excessive risk weighting and restrictions on dividends and discretionary bonuses, while Members from South Carolina echoed general concerns about the impact of the proposals on community banks. These legislators join other federal and state policymakers who have submitted similar comments in recent weeks. Scrutiny of the proposals will continue next week with a Senate Banking Committee hearing planned for November 14, 2012 to review the pending rules with representatives from the Federal Reserve Board, the OCC, and the FDIC.

    FDIC Federal Reserve OCC Capital Requirements U.S. Senate U.S. House

  • House Members Urge CFPB To Adopt QM Rule With Safe Harbor

    Lending

    This week, 90 members of the House of Representatives reportedly sent a letter to CFPB Director Richard Cordray urging the CFPB to include a clear and strong safe harbor in its final “ability to repay” or “qualified mortgage” (QM) rule. The rule would require creditors to verify a consumer’s ability to repay prior to making a residential mortgage loan and would define a QM that has a presumption of compliance with the ability to repay requirement. The letter, which was initiated by Representatives Capito (R-WV) and Sherman (D-CA), adds to a record that some Members of Congress have been building with regard to the QM rule. The Financial Institutions and Consumer Credit Subcommittee of the House Financial Services Committee chaired by Representative Capito held a hearing this week to receive testimony on the rule from stakeholders. While the witnesses generally agreed that the QM rule should be broad and provide clearly defined standards, differences of opinion remain with regard to the safe harbor issue. This week the extended comment period for the rule closed; the CFPB has indicated that it expects to issue its final rule before the end of 2012.

    CFPB U.S. House Qualified Mortgage

Pages

Upcoming Events