Dodd-Frank

Yesterday, on Sunday, March 22, 2020, U.S. Senate Republicans released the latest version of their COVID-19-related stimulus bill, the Coronavirus Aid, Relief, and Economic Security Act or CARES Act.  The bill contains several measures intended to provide relief to banks, their customers, and broader financial markets.

The latest version of the CARES Act includes the…

Yesterday, on Sunday, March 15, 2020, in response to the COVID-19 pandemic’s impact on U.S. and global economic activity, the Federal Reserve’s Federal Open Market Committee (“FOMC”) cut the target range of the federal funds rate to 0 to 1/4 percent until such time as the FOMC is “confident that the economy has weathered recent…

On November 6, the Consumer Financial Protection Bureau (“CFPB”) held a symposium on the prospective implementation of Section 1071 of the Dodd-Frank Act, codified as 15 U.S.C. § 1691c-2, which requires financial institutions to inquire about and report to the CFPB whether a business credit applicant is a women-owned, minority-owned, or small business. The CFPB may make such information available to the public. Section 1071 is often viewed as HMDA for small business, a reference to the Home Mortgage Disclosure Act, which requires financial institutions to collect and report information about mortgage applicants to the CFPB, some of which is made public.

Section 1071 amended the Equal Credit Opportunity Act of 1974 in 2010 to “facilitate enforcement of fair lending laws” and to “enable communities, governmental entities, and creditors to identify business and community development needs and opportunities of women-owned, minority-owned, and small businesses.” In 2011, the CFPB announced that financial institutions’ obligations to collect information under the law would not go into effect until it issued implementing regulations. To date, however, the CFPB has not issued proposed or final regulations to implement Section 1071.

In her prepared remarks, CFPB Director Kathy Kraninger reassured symposium participants that Section 1071 rulemaking will be done with “care and consideration,” and with the goal of maintaining access to credit for small businesses, suggesting that the CFPB will exercise caution as it seeks to implement the law. Earlier this year, Director Kraninger and the CFPB were named as defendants in a lawsuit alleging a violation of the Administrative Procedures Act because the CFPB has not yet issued Section 1071 implementing regulations.…

Continue Reading CFPB Holds Symposium on Section 1071 of Dodd-Frank

On Tuesday October 2, leaders of the federal prudential regulators testified before the Senate Committee on Banking, Housing, and Urban Affairs (“Banking Committee”) on their agencies’ efforts to implement the Economic Growth, Regulatory Relief, and Consumer Protection Act (“EGRRCPA” or the “Act”). All of the regulators expressed support for the goals of EGRRCPA, particularly with respect to tailoring regulations, and highlighted the steps being taken to implement the law.

The witnesses at the hearing were: Joseph Otting, Comptroller, Office of the Comptroller of the Currency (“OCC”); Randal Quarles, Vice Chairman for Supervision, Board of Governors of the Federal Reserve System (“FRB”); Jelena McWilliams, Chairman, Federal Deposit Insurance Corporation (“FDIC”); and J. Mark McWatters, Chairman, National Credit Union Administration (“NCUA”).

This post summarizes below, as highlighted in the witnesses’ testimony:

  • some of the key steps these agencies have taken to implement the Act, which include the release of a number of proposed and interim final rules; and
  • the steps the agencies intend to take next, including tailoring enhanced prudential standards for larger bank holding companies (“BHCs”).

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Continue Reading After Senate Banking Committee Testimony, Where Does Dodd-Frank Reform Stand?

The Financial Stability Oversight Council (“FSOC”) has announced that on Thursday, April 12, 2018, it will consider a “potential application” from a bank holding company or its successor to be de-designated as a systemically important financial institution under section 117 of the Dodd-Frank Act.

Sometimes known as the “Hotel California” provision,[1] section 117 of Dodd-Frank provides that any institution that was a bank holding company with $50 billion or more in total consolidated assets as of January 1, 2010, participated in the Capital Purchase Program of the Troubled Asset Relief Program, and ceases to be a bank holding company, will presumptively be treated as a nonbank systemically important financial institution (“nonbank SIFI”) and continue to be supervised and regulated by the Federal Reserve.  Such an institution may appeal its designation as a nonbank SIFI to FSOC, which may grant the appeal by a vote of two-thirds or more of its voting members, including an affirmative vote by the Chairperson (the Secretary of the Treasury).…

Continue Reading FSOC to Consider First Case Under Dodd-Frank’s Hotel California Provision

Today the Federal Reserve issued its semiannual regulatory flexibility agenda for fall 2017, which lists regulatory matters the agency anticipates having under consideration during the period from November 1, 2017 through April 30, 2018.

The agenda is notable in two respects.  First, the Federal Reserve anticipates issuing, together with the Office of the Comptroller of…

On July 14, 2017, the Consumer Financial Protection Bureau (“CFPB”) issued a proposal to ease, at least temporarily, the reporting requirements for community banks and credit unions under the Home Mortgage Disclosure Act (“HMDA”). The proposed rule would raise the threshold at which financial institutions have to report on home equity lines of credit for…

On Friday, April 21, President Donald Trump signed two presidential memoranda, directing the Secretary of the Treasury (the “Secretary”), Steve Mnuchin, to review two major provisions of the Dodd-Frank Act: orderly liquidation authority (“OLA”) for financial companies under Title II, and the decision-making processes of the Financial Stability Oversight Council (“FSOC”). Consistent with the Trump Administration’s February Executive Order ordering the Secretary to review financial regulations—which we discussed in a client alert—these memoranda highlight the Administration’s concerns with certain provisions of Dodd-Frank but will not effect major changes on their own.
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Continue Reading Trump Directs Treasury to Review Dodd-Frank Orderly Liquidation Authority and FSOC Processes

Throughout his campaign, President Donald Trump promised to curtail financial regulations, particularly those promulgated under the Dodd-Frank Act.  President Trump argued frequently that the regulations issued under the act have proven overly burdensome and, among other things, limited job growth.  This afternoon, the President took his first formal step in implementing his deregulatory agenda.  He …