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  • Senators Introduce Joint Resolution to Overturn CFPB's Prepaid Rule; CFPB Releases Prepaid Rule Compliance Guide on Same Day

    Federal Issues

    On February 1, Sen. David Perdue (R-Ga.), and six fellow GOP lawmakers introduced a joint resolution proposing to overturn the CFPB’s final rule on prepaid accounts (Prepaid Rule) before it goes into effect on October 1. The proposed resolution calls for applying the Congressional Review Act to set aside the regulation—which, procedurally, would require only a simple majority vote in the Senate and House and approval by President Trump.

    As previously covered by InfoBytes, the Prepaid Rule amends Regulations E and Z to extend disclosure requirements and consumer protections to certain government benefit cards and mobile wallet accounts, payroll cards, Visa- or MasterCard-branded cards sold in retail outlets for general use, and other types of prepaid products. Generally, the Prepaid Rule becomes effective October 1, 2017. The Prepaid Rule does, however, contain certain exceptions and accommodations related to the October 1 effective date.

    Earlier that same day, the CFPB issued a small entity compliance guide, which provides a summary of the Prepaid Rule and highlighting information that may be helpful when implementing its various provisions. Among other things, the compliance guide covers: definitions of various prepaid accounts, exclusions in the rule, entities subject to the rule, required disclosures, change-in-terms notices, limited liability and error resolution, periodic statements, receipts at electronic terminals, access devices, compulsory use, account agreements, overdraft credit features, remittances, and record retention. The compliance guide also discusses the exceptions and accommodations related to the effective date noted above, which are also listed in the Prepaid Rule’s Effective Dates Factsheet.

    Federal Issues Consumer Finance CFPB Regulation Z Regulation E Congress Prepaid Rule

  • Midnight Rules Relief Act of 2017

    Federal Issues

    On January 4, the U.S. House of Representatives approved the Midnight Rule Relief Act—legislation that would allow Congress to repeal in a single vote any rule finalized in the last 60 legislative days of the Obama administration. The GOP-backed measure, was approved largely along party lines by a vote of 238-184 on the second day of the new Congress. If passed by the Senate and signed into law by the new President, the legislation would amend the Congressional Review Act (CRA) to allow lawmakers to bundle together multiple rules and overturn them “en bloc” with a joint resolution of disapproval. While the CRA only requires a simple majority to pass, current law requires Congress to review regulatory resolutions of disapproval one at a time. The legislation is presently pending before the Senate Homeland Security and Governmental Affairs Committee.

    Federal Issues Trump Congress

  • Senate Banking Committee Announces Subcommittee Assignments for 115th Congress

    Federal Issues

    On January 17, the Senate Committee on Banking, Housing and Urban Affairs Chairman Mike Crapo (R-Idaho) and Ranking Member Sherrod Brown (D-Ohio), announced subcommittee assignments for the 115th Congress. The Senators named to head each subcommittee are listed below:

    • Dean Heller of Nevada will be the new chairman of the Securities, Insurance and Investment subcommittee. Sen. Mark Warner of Virginia will continue to serve as ranking member.
    • Pat Toomey of Pennsylvania will remain chairman of the Financial Institutions and Consumer Protection subcommittee. Sen. Elizabeth Warren of Massachusetts will be the new ranking member.
    • Tom Cotton of Arkansas will become chairman of the Economic Policy subcommittee. Sen. Heidi Heitkamp of North Dakota will be the new ranking member.
    • Ben Sasse of Nebraska will chair the National Security and International Trade and Finance subcommittee. Sen. Joe Donnelly of Indiana will serve as ranking member.

    Sen. Tim Scott of South Carolina will continue to chair the Housing, Transportation and Community Development subcommittee. Sen. Robert Menendez of New Jersey will remain ranking member.

    Federal Issues Banking Mortgages U.S. Senate Congress

  • Rep. Wilson Introduces Bill to Delay Fiduciary Rule

    Federal Issues

    On January 6, Rep. Joe Wilson (R-S.C.) introduced the Protecting American Families’ Retirement Advice Act, a bill that would delay by two years the effective date of the Department of Labor’s “fiduciary rule.” As discussed previously on InfoBytes, the fiduciary rule—which is presently set to take effect in April 2017—expands the definition of “investment advisor” to include a “wider array of advice relationships,” thereby imparting new standards on financial advisors and brokers handling retirement accounts. In a statement, Rep. Wilson described the Fiduciary Rule as “one of the most costly, burdensome regulations to come from the Obama Administration.” Wilson’s proposed legislation seeks to delay the rule’s implementation in order to “giv[e] Congress and President-elect Donald Trump adequate time to re-evaluate.”

    Federal Issues Banking President-Elect Congress Fiduciary Rule Agency Rule-Making & Guidance

  • Senate Republicans Announce Three New Banking Committee Members

    Federal Issues

    On January 3, 2017, Senate Republican leadership released committee assignments for the 115th Congress, and in the process, announced the addition of three new Republican members of the Banking, Housing, and Urban Affairs Committee. Specifically, Sens. David Perdue (R-Ga.), Thom Tillis (R-N.C.) and John Kennedy (R-La.) have been assigned to the Committee, replacing Sens. Jerry Moran (R-Kan.), who was reassigned, David Vitter (R-La.), who retired last year, and Mark Kirk (R-Ill.), who lost his re-election bid. Looking ahead, committee chairs will be selected next week following a vote of the members of each respective committee and then ratified by the Senate Republican Conference.

    Federal Issues Banking U.S. Senate U.S. House Congress

  • OFR Releases 2016 Annual Report to Congress; Reveals Credit Extended Through "Shadow Banking" Exceeds That of Traditional Banks

    Federal Issues

    On December 13, the Office of Financial Research (OFR) announced the release of both its 2016 Annual Report to Congress and its 2016 Financial Stability Report. The reports met the reporting requirements of the Dodd-Frank Act, including an analysis of: (i) threats to U.S. financial stability; (ii) key findings and insights from the OFR’s research; and (iii) the status of OFR efforts in meeting its mission. Among other things, the report noted the increasingly prominent role of shadow banking — “the extension of credit by nonbank companies, or credit funded by liabilities susceptible to runs because they are payable on demand and lack a government backstop.” According to the OFR, credit provided by the so-called shadow banking sector is presently higher than that of established banks. Indeed, OFR research indicates that credit from nonbank companies reached about $15.1 trillion as of the first quarter of 2016, thus making it "the major source of credit to U.S. businesses and households" — providing 38 percent of credit compared with banks' 32 percent.

    Federal Issues Banking Dodd-Frank OFR Congress

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