Treasury Echoes Trump: Deregulate to Improve Financial Systems

Shortly after taking office, President Trump issued an Executive Order to establish a policy for regulating the United States financial system under seven "Core Principles," and to order a report from the United States Treasury that assesses financial markets. Last week, Treasury responded with its first 150 page report on the current state of the financial system that outlines proposed regulatory changes. Treasury points the finger at the Obama administration’s 2010 enactment of Dodd-Frank for imposing regulatory requirements insufficiently tailored or coordinated among agencies, unrelated to addressing the problems leading to the great recession, and applied in an overly prescriptive manner. In no uncertain terms, the report concludes that the scope and excess costs imposed by Dodd-Frank have resulted in a slower rate of growth in the financial markets. Unsurprisingly, Treasury’s regulatory recommendations coincide with Congress’ current legislative effort at replacing Dodd-Frank with the Financial Choice Act. More ›

Congress Takes a Significant Step Towards Replacing Dodd-Frank and Gutting the CFPB

On Thursday, as we anticipated in a previous blog post, the House of Representatives voted along party lines to pass the Financial CHOICE ACT ("FCA"), which would repeal Dodd-Frank and strip the CFPB of its authority.

The debate leading up to the vote also appeared to divide sharply along partisan lines, with Republicans urging their colleagues to vote for the Bill, and Democrats insisting that it was the "Wrong Choice" for Americans. Despite their differing opinions, representatives from all parties appeared to articulate the same goal: putting Main Street America ahead of Wall Street.

Supporters of the FCA contend that the purported benefits of Dodd-Frank have never materialized. They argue that due to Dodd-Frank’s excessive and expensive regulatory burdens, small banks and businesses have failed, while big banks have continued to thrive. Imposing the same regulations on every financial institution, they say, has strangled small community banks, and forced many to shut down. This problem triggered another major concern of the bill's supporters, namely an alleged lack of choice of financial products and the increased cost of these same products. More ›

Congress Seeks Dodd-Frank Overhaul and Elephant Dart for Consumer Financial Protection Bureau

On May 4, 2017, the House Financial Services Committee passed HR 10, the Financial CHOICE ACT ("FCA") by a 34-26 vote, with all proposed Democratic redlines rejected. The FCA is expected to go to a full House vote as early as this week. 

The FCA purports to keep the protections Dodd-Frank aimed to enact, while at the same time freeing regulations on the American economy. It promises to "create hope and opportunity for investors, consumers, and entrepreneurs," by, among other things, ending bailouts and "holding Washington and Wall Street accountable."

FCA, as drafted, would repeal the Dodd-Frank Act in its entirety, remove CFPB supervisory authority over financial institutions, and allow the President to appoint, and remove at will, a CFPB director.  Moreover, FCA would remove any authority the CFPB has to investigate actions it deems abusive, but would keep the agency in place, changing its name from the Consumer Financial Protection Bureau to the Consumer Law Enforcement Agency (CLEA). More ›

PHH v. CFPB En Banc Oral Argument Recap: The Skinny on the Scuffle

For more than an hour and half on Wednesday, May 24, lawyers for PHH Mortgage and the Consumer Financial Protection Bureau discussed, debated, and decried the CFPB’s authority before the full D.C. Circuit Court of Appeals. There was minimal discussion of the underlying RESPA claims that formed the basis of the CFPB’s $109 million dollar judgment obtained against PHH. The major debate focused on whether the CFPB’s single director leadership and the President’s limited, for cause removal of that single director violated the Constitution’s separation of powers clause. The parties debated, among other issues, (1) the diminishment, if any, of the President's ability to faithfully execute the laws; (2) the effect and nature of the for-cause removal provisions; (3) the single director structure v. multi-member commission structure; (3) the effect and nature of the Bureau's other structural features, such as budget & appropriations; and, (4) departure, if any, from historical traditions and ideals. More ›

Climate for Student Loan Oversight Gets Hotter with Recommendation of Top CFPB Student Loan Official for FTC Commissioner

While most mainstream media outlets are pulling a Jan Brady and reporting "Comey, Comey, Comey," the consumer financial services community should be chewing on a different name right now: "Chopra, Chopra, Chopra."

U.S. Senate Minority Leader, Chuck Schumer (D, NY), has recommended to the President, Rohit Chopra, former Consumer Financial Protection Bureau Student Loan Ombudsman for an open Democratic seat on the Federal Trade Commission. As the former CFPB Ombudsman, Chopra held a high post in the Bureau, interacting directly and routinely with Director Richard Cordray, and helping to prioritize—and importantly, publicize—student loan policy and enforcement initiatives for the Bureau that have long outlasted Chopra's tenure. Chopra has been known to draw comparisons between the mortgage and student loan industries, calling for greater data transparency in the student loan industry. More ›

No RESPA Claim for Violation of Written Acknowledgement Requirement under Regulation X

Last summer, the Consumer Financial Protection Bureau (CFPB) published its final rule amending existing mortgage servicer rules in Regulation X of the Real Estate Settlement Procedures Act (RESPA). Recently, the Eleventh Circuit Court of Appeals had the opportunity to determine what kind of damages might arise from a violation of Regulation X’s written acknowledgment requirement.

The answer in this case was no concrete harm, with the Court affirming dismissal of a borrower's claim for violations of the 5 day written response acknowledgment provision of 12 C.F.R. § 1024.36(c). The borrower had sued his mortgage loan servicer for RESPA violations after his lawyer sent the servicer a Request for Information certified mail return receipt requested, and the servicer responded by returning the certified mail green card and by providing a substantive response 9 days later. More ›