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Chopra moves closer to Senate confirmation
On September 21, the U.S. Senate passed a motion, 49-48 along party lines, to discharge Rohit Chopra’s nomination as permanent director of the CFPB from the Senate Committee Banking, Housing, and Urban Affairs. Chopra, currently an FTC Commissioner, was nominated by President Biden in January (covered by InfoBytes here), and now awaits a final confirmation vote. The CFPB is currently led by acting Director Dave Uejio who Biden nominated in June for Assistant Secretary for Fair Housing and Equal Opportunity at HUD.
Biden announces Comptroller of the Currency nominee
On September 22, President Biden officially nominated Saule Omarova for Comptroller of the Currency. If confirmed, Omarova would be the first woman and person of color to serve as Comptroller. Currently Omarova is a professor of law at Cornell University and serves as Director of the Program on the Law and Regulation of Financial Institutions and Markets at Cornell’s Jack Clarke Institute for the Study and Practice of Business Law. Omarova’s academic expertise includes an expertise in issues related to the regulation of systemic risk and structural trends in financial markets. Prior to joining academia, Omarova also, among other things, served at the U.S. Department of Treasury as a Special Advisor for Regulatory Policy to the Under Secretary for Domestic Finance.
President Biden issues executive order addressing crisis in Ethiopia
On September 17, President Biden signed a new Executive Order (E.O.), Imposing Sanctions on Certain Persons with Respect to the Humanitarian and Human Rights Crisis in Ethiopia, that declares a national emergency with respect to the humanitarian and human rights crisis in northern Ethiopia. The E.O. provides the Secretary of the Treasury, in consultation with the Secretary of State, with the authority “to impose a range of targeted sanctions on persons determined, among other things, to be responsible for or complicit in actions or policies that expand or extend the ongoing crisis or obstruct a ceasefire or peace process in northern Ethiopia or commit serious human rights abuse.” Concurrently, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) issued three new general licenses, GLs 1, 2, and 3, which authorize official activities associated with certain international organizations and entities, certain nongovernmental organizations’ activities, and certain transactions associated with the exporting or reexporting of agricultural commodities, food, medicine, and medical items. OFAC also published six related FAQs (see FAQs 922, 923, 924, 925, 926, and 927), which provide additional clarity concerning the non-application of OFAC’s 50 Percent Rule to property and interests in property of persons blocked pursuant to the new E.O., as well as guidance on activities authorized by the new GLs.
Biden announces key FTC, CFTC nominations
On September 13, President Biden nominated Alvaro Bedoya for Commissioner of the FTC. Bedoya would replace FTC Commissioner Rohit Chopra, who was nominated as the permanent director of the CFPB (covered by InfoBytes here). Chopra currently awaits a Senate confirmation vote on his nomination to serve as the Bureau’s director.
Bedoya, a Georgetown University visiting professor of law, also founded the law school’s Center on Privacy & Technology. According to the administration’s announcement, Bedoya previously “co-led a coalition that successfully pressed an Internet giant to drop ads for online payday loans” and served as the first chief counsel to the Senate Judiciary Subcommittee on Privacy, Technology and the Law. FTC Chair Lina M. Khan issued a statement following Bedoya’s nomination praising his “expertise on surveillance and data security.”
Additionally, Biden announced several CFTC Commissioner nominees: Kristin Johnson, Christy Goldsmith Romero, and Rostin Behnam, who currently serves as the agency’s acting chairman and has been nominated to be the permanent CFTC Chair. Behnam’s priorities include safeguarding customer protections, climate-related financial market risk, and diversity, equity, and inclusion in the financial markets.
President Biden issues executive order blocking certain Russian pipelines
On August 20, President Biden signed Executive Order (E.O.) Blocking Property with Respect to Certain Russian Energy Expert Pipelines to take additional steps with respect to the national emergency declared in E.O. 14024 (covered by InfoBytes here) related to specific harmful foreign activities by the Russian government. The new E.O. prohibits, among other things, (i) “the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to this order”; and (ii) “the receipt of any contribution or provision of funds, goods, or services from any such person.” Concurrently, OFAC issued Russia-related General License (GL) 1A, as well as several new and updated FAQs related to the updated designations (see FAQs 894, 919, 920, and 921). Specifically, GL 1A authorizes certain activities involving the Federal State Budgetary Institution Marine Rescue Service (MRS) (“or any entity in which MRS owns, directly or indirectly, a 50 percent or greater interest”) that are not related to the construction of specified pipeline projects. Several individuals and entities have also been added to OFAC’s Specially Designated Nationals List.
President Biden extends student loan moratorium
On August 6, President Biden announced the final extension of the moratorium on collecting student loans until January 31, 2022, which will “give the Department of Education and borrowers more time and more certainty as they prepare to restart student loan payments,” and will “ensure a smoother transition that minimizes loan defaults and delinquencies that hurt families and undermine our economic recovery.” In a statement issued by the Department of Education, Secretary of Education Miguel Cardona stated that it is the “Department’s priority to support students and borrowers during this transition and ensure they have the resources they need to access affordable, high quality higher education.” The moratorium was scheduled to expire on September 30.
Agencies extend Covid-19 eviction moratorium
On July 30, USDA, HUD, the VA, and FHFA extended their foreclosure-related eviction moratoria until September 30. The extensions follow President Biden’s July 29 announcement, which asked federal agencies to extend their respective eviction moratoria through the end of September following the expiration of the CDC’s moratorium on residential evictions on July 31. While Biden called on Congress to pass legislation to extend the eviction moratorium following a recent U.S. Supreme Court ruling, which stated that “clear and specific congressional authorization (via new legislation) would be necessary for the CDC to extend the moratorium past July 31”, emergency legislation to extend the federal eviction moratorium through the end of the year did not pass the U.S. House.
USDA extended its eviction moratorium for homeowners of properties financed or guaranteed by USDA through September 30 and reminded servicers that the single family foreclosure moratorium will expire on July 31. After this date, no new foreclosure filings should occur until homeowners are reviewed for new options to reduce their payments and stay in their homes, USDA noted.
FHA also announced the extension of its eviction moratorium for foreclosed borrowers and their occupants through September 30. The moratorium applies to homeowners with FHA-insured Title II Single Family forward and Home Equity Conversion (reverse) mortgages, excluding legally vacant or abandoned properties (see Mortgagee Letter 2021-19). The extension is intended to ensure borrowers with FHA-insured mortgages are not immediately displaced from their homes. FHA also noted the expiration of the foreclosure moratorium on July 31.
Additionally, VA Circular 26-21-14 extends eviction relief for properties previously secured by VA-guaranteed loans (including properties in VA’s Real Estate Owned (REO) portfolio through September 30, excluding vacant or abandoned properties.
Further, FHFA announced that Fannie Mae and Freddie Mac (GSEs) will extend their moratorium on single-family REO evictions until September 30. The current moratorium was set to expire July 31. The REO eviction moratorium applies only to properties that have been acquired by the GSEs through foreclosure or deed-in-lieu of foreclosure transactions. FHFA also encouraged landlords of Fannie Mae or Freddie Mac-backed properties to apply for Emergency Rental Assistance (ERA) before beginning the process of evicting a tenant for non-payment of rent, and directed tenants and landlords to the CFPB’s online Rental Assistance Finder.
Agencies announce additional actions to prevent Covid-19 foreclosures
On July 23, President Biden announced additional actions taken by HUD, the VA, and USDA, which are intended to ensure stable and equitable recovery from disruptions caused by the Covid-19 pandemic and prepare homeowners to exit mortgage forbearance. According to the Biden administration, the goal of these new measures is to bring homeowners with HUD-, VA-, and USDA-backed mortgages closer in alignment with options provided for homeowners with Fannie Mae- and Freddie Mac-backed mortgages (covered by InfoBytes here). Specifically, mortgage servicers will be required or encouraged to offer new payment reduction offers to assist borrowers.
- HUD. FHA announced enhanced Covid-19 recovery loss mitigation options to help homeowners with FHA-insured mortgages who have been financially impacted by the pandemic. Mortgagee Letter (ML) 2021-18 supersedes previously issued FHA-loss mitigation options, and will, among other things, require mortgage servicers to offer a zero-interest subordinate lien option to eligible homeowners who can resume their existing mortgage payments under the “COVID-19 Recovery Standalone Partial Claim” option. For borrowers that are unable to resume their monthly mortgage payments, FHA established the “COVID-19 Recovery Modification” option, which extends the term of a mortgage to 360 months at market rate and targets a 25 percent principal and interest (P&I) reduction for all eligible borrowers. Servicers may start offering the options as soon as operationally feasible but must begin using the new options within 90 days. These additional options supplement FHA Covid-19 protections published last June (covered by InfoBytes here), which extended the foreclosure and eviction moratorium, expanded the Covid-19 forbearance and home equity conversion mortgage extension, and established the Covid-19 advance loan modification.
- VA. The VA also announced it will offer a new “COVID-19 Refund Modification” option to assist veterans impacted by the pandemic who need a significant reduction in their monthly mortgage payments. Under the plan, the VA will be able to purchase a veteran’s past-due payments and unpaid principal—subject to certain limits—“depending on how much assistance is necessary,” and, in certain circumstances, veterans will be able to receive a 20 percent payment reduction (certain borrowers may be eligible to receive a larger reduction). Mortgage servicers will modify the loan to ensure veterans can afford future mortgage payments. Similar to the VA’s “COVID–19 Veterans Assistance Partial Claim Payment” (covered by InfoBytes here), the deferred indebtedness will be established as a junior lien, which will not accrue interest, will not require monthly payments, and will only become due once the property is sold or the guaranteed loan is paid off or refinanced. The option is available through September 30, 2021.
- USDA. The agency announced new Covid-19 special relief measures, as well as clarifications to existing policies, for servicing borrowers impacted by the pandemic. USDA noted that Chapter 18 Section 5 of Handbook-1-3555 will be expanded to include “COVID-19 Special Relief Alternatives,” which includes an option that targets a 20 percent reduction in a borrower’s monthly P&I payments and offers “a combination of interest rate reduction, term extension and mortgage recovery advance.” These measures are immediately available and will be effective through December 31, 2022. Eligible borrowers must occupy the property, must not be more than 120 days past due on March 1, 2020, and must have received an initial forbearance due to a pandemic-related hardship before September 30, 2021.
Biden orders federal agencies to evaluate banking, consumer protections
On July 9, President Biden issued a broad Executive Order (E.O.) that includes provisions related to the financial services industry.
- CFPB. The E.O. encourages the CFPB director to issue rules under Section 1033 of Dodd-Frank “to facilitate the portability of consumer financial transaction data so consumers can more easily switch financial institutions and use new, innovative financial products.” As previously covered by InfoBytes, last October, the Bureau issued an advanced notice of proposed rulemaking on Section 1033, seeking comments on questions related to consumers’ access to their financial records. The E.O. also instructs the Bureau to enforce Section 1031 of Dodd-Frank, which prohibits unfair, deceptive, or abusive acts or practices in consumer financial products or services, “to ensure that actors engaged in unlawful activities do not distort the proper functioning of the competitive process or obtain an unfair advantage over competitors who follow the law.”
- Treasury Department. The E.O. calls on Treasury to submit a report within 270 days on the effects on competition of large technology and other non-bank companies’ entry into the financial services space.
- FTC. The E.O. tasks the FTC with establishing rules to address concerns about “unfair data collection and surveillance practices that may damage competition, consumer autonomy, and consumer privacy.” The FTC already commenced that process on July 1, when it approved changes to its Rules of Practice to amend and simplify the agency’s procedures for initiating rulemaking proceedings. According to Commissioner Rebecca Kelly Slaughter, “[s]treamlined procedures for Section 18 rulemaking means that the Commission will have the ability to issue timely rules on issues ranging from data abuses to dark patterns to other unfair and deceptive practices widespread in our economy.”
- Bank Mergers. The E.O. encourages the Attorney General, in consultation with the Federal Reserve Board, FDIC, and OCC, to “review current practices and adopt a plan, not later than 180 days after the date of this order, for the revitalization of merger oversight under the Bank Merger Act and the Bank Holding Company Act of 1956.”
Biden announces key nominations
On June 24, President Biden announced his intent to nominate seven individuals to serve in key roles, including two nominations to positions in the Department of Housing and Urban Development. Among them is Dave Uejio, the current acting Director of the CFPB, as the nominee for Assistant Secretary for Fair Housing and Equal Opportunity, Department of Housing and Urban Development. As previously covered by Infobytes, Uejio has been with the CFPB since 2012, and from 2015 to his appointment as acting director to replace Kathy Kraninger, he served as the Bureau’s Chief Strategy Officer. According to the announcement, Uejio also co-chairs the Federal Innovation Council, “a leading federal government interagency body [driving] public sector innovation.” In January, President Biden officially nominated FTC Democratic Commissioner Rohit Chopra as the permanent director of the CFPB (covered by InfoBytes here). He is currently awaiting a Senate confirmation vote on his nomination to serve as the Bureau’s Director. President Biden also announced Julia Gordon, who is the National Community Stabilization Trust President, as the nominee for Assistant Secretary for Housing, Federal Housing Commissioner, Department of Housing and Urban Development.