Regulatory Compliance Update May 2017

Regulatory Compliance Update

By: Hickman Beckner, Vice President

Congress was in recess for two weeks in April, so regulatory activity was minimal.

CFPB – Proposed amendment to Regulation B covering collection of ethnicity, race, and sex information of loan applicants.

Significant Dates:

May 4, 2017 – Comments due for the CFPB proposed changes for Regulation B. See above.

May 23, 2017 – Comments due on the CFPB’s proposal for assessing the rules for consumer remittance transfers.

May 25, 2017 – Comments due on the CFPB’s proposal for technical corrections to the Home Mortgage disclosures.

June 8, 2017 – Comments due on CFPB’s request for information about the consumer credit card market.

September 15, 2017 – Effective date for Phase 2 of NACHA’s same day ACH Processing.

September 29, 2017 – Effective date for NACHA Operating Rules that require registration of third-party senders.

October 19, 2017 – Effective date for CFPB final mortgage servicing rules covering:

  • Definition of delinquency
  • Forced placed insurance notices
  • Early intervention for defaults
  • Loss mitigation
  • Prompt payment crediting
  • Wording changes on statements to reflect successors in interest
  • Small servicers

Emerging Legislation:

The Congress has turned its attention to modifying or repealing Dodd-Frank.

Representative Jeb Hensarling (R-TX), the chair of the House Financial Services Committee has submitted a sweeping bill that would change the structure and funding of the CFPB, repeal sections of Dodd-Frank, change the Federal Reserve’s discount window lending, enhance the Security and Exchange Commission’s authority to levy fines and penalties, and would repeal or revise many regulations enacted during the Obama administration.

We expect that Congress will pass legislation that changes the funding of the CFPB and brings it under the budgetary control of Congress. The rule making authority of the CFPB may also be limited. Legislation will also focus on “Too big to fail” and the rules for winding down failed institutions.

Congress will also seek to repeal some of the contentious rules of the Obama administration such as the Labor Department’s Fiduciary Rule for financial advisors handling retirement funds.

While many of these bills will pass the House of Representatives, the Senate process is more deliberate. The Senate rules give power to individual Senators to delay or halt legislation. This could be important because the driving force behind the creation of the CFPB and its unique funding source, Senator Elizabeth Warren (D-MA), maintains her position in the Senate.