In This Issue…
• Greetings from Guy
• S. 2155: Almost home
• Overemphasis on enforcement at CFPB leaders to inefficiency, ABA says
• CFPB finalizes amendments to Federal mortgage disclosure requirements under TILA
• OBA education corner …
Greetings from Guy
All indications are the House will vote on S. 2155 within the next two weeks. This vote represents the final piece needed to get much needed regulatory relief for community banks across the finish line and on to the President for signature.
This has been a long and frustrating journey for many of us in the community banking industry. We began with the Great Recession in 2008; the heated debates in Congress in 2009 over Dodd-Frank and the creation of the CFPB; the final passage of the bill with no support from Republicans in 2010; and the long and painful implementation over the last 8 years. During all of this time many good community bankers have worked diligently to make some common-sense changes to this poor piece of legislation.
Many of us have been involved in this fight since early 2009 when it became evident the Obama administration was going to use the Great Recession as the political catalyst to reshape the financial regulatory environment. It’s fair to say the administration was successful in its goals. It’s also fair to say its goals had many harmful and unintended (or intended) consequences for the community banking industry.
I believe what the community banking industry has lived through over the last eight years is an example of what happens when the political pendulum shifts too far in one direction. I also believe we have been experiencing the same phenomenon in Oklahoma politics recently.
The politically extreme factions on both sides of the political spectrum dominate all of the debate in today’s world. As a banker, all I ask for is a chance to succeed or fail, on a level playing field, with minimal interference from government. I don’t think that’s out of line with the feelings of most American businesses and with most Americans.
This represents my last article for the OBA update and I apologize for the nostalgic political rant above. It has truly been an honor to serve as Chairman of your Association over the past year. I have had the privilege to meet so many wonderful bankers from across the state.
I would ask that we all support the incoming leadership team. Sandy, Frazier and Rick are all outstanding bankers who will serve us well. Let’s get behind Sandy and her team and continue to move our industry forward.
S. 2155: Almost home
As Chairman Sims noted above, we are poised to cross the finish line and see the House approve S. 2155 as it was passed by the Senate. If that happens, the bill will go straight to the President for signature and will not have to be taken up again in the Senate.
“This afternoon I learned that the bill is expected to be considered on the House floor a week from today, which is Tuesday, May 22,” OBA President Roger Beverage said. “That’s right in the middle of the biggest day of our Annual Convention, and it can’t come soon enough.”
Beverage noted the OBA has joined with its sister state bankers associations in signing a letter to the Speaker and the Minority Leader in the House of Representatives. Here’s the draft letter:
Dear Speaker Ryan and Minority Leader Pelosi:
The undersigned state bankers associations, representing banks of all sizes from across the country, write to express our strong support for S. 2155, the Economic Growth, Regulatory Relief and Consumer Protection Act, and to urge bipartisan approval of this legislation.
Over the years, the House has passed many measures that we supported, believing they would help our member banks better serve their customers and communities. The House now has an opportunity to take another major step forward on regulatory reform by passing S. 2155, which contains several measures that either originated in the House or previously cleared the House with bipartisan majorities.
While no piece of legislation is perfect, S. 2155 is a carefully crafted bill that will be vital to assisting small businesses and consumers in our states. It represents the broadest legislative review of our nation’s banking laws in a decade, and we commend House Financial Services Committee Chairman Jeb Hensarling, Ranking Member Maxine Waters and other committee members for working in a bipartisan manner on several of the bill’s provisions.
Banks and regulators alike have acknowledged that some regulations implemented since the financial crisis have overshot their mark in important ways, imposing unintended costs on consumers, businesses and the economy. We support efforts by Congress to identify statutory and regulatory provisions that need revision, and we urge that these provisions be tailored in ways that promote economic activity while preserving safety and soundness. S. 2155 is a productive step in that direction, balancing these two important objectives.
After years of debate, dozens of hearings and hundreds of votes, members of the House finally have an opportunity to reform banking regulation and help many of our members better serve consumers and communities. We strongly urge members of the House of Representatives to support and pass S. 2155.
“We’ll keep watching as the events continue to unfold,” Beverage said. “But we are very, very close to getting something across the finish line that will help millions of consumers across the country. Contrary to the claims made by Sen. (Elizabeth) Warren (D-MA), this bill will provide access to credit for which these millions of consumers do not now and cannot now qualify. We’re about to see what a dramatic economic event looks like.”
Overemphasis on enforcement at CFPB leads to inefficiency, ABA says
Under the leadership of Acting Director Mick Mulvaney, the Bureau of Consumer Financial Protection (CFPB) has sought public comment on various policies and procedures that have earlier been put in place without much of an opportunity for public comment. Several RFIs (Requests for Information) have been published.
One of the most recent RFIs is the enforcement process on which the Bureau has relied to implement its many rules. In a recent comment letter, the ABA’s Ginny O’Neil has noted that “the Bureau’s focus all too often has been on increasing the scope of its authority, rather than on instituting checks and balances to ensure that its authority is exercised wisely and fully for the benefit of consumers and consistent with law and due process. This pervasive problem helps explain why the Bureau has routinely turned to enforcement when other tools might achieve compliance and consumer redress with less cost and controversy, and why the Bureau’s enforcement policies sometimes sacrifice fairness and efficiency in the name of expediency.”
O’Neil points out in her letter the Bureau of Consumer Financial Protection “has to date over-emphasized enforcement activities as part of its regulatory toolbox. As a result, it has too seldom employed less adversarial supervisory solutions that facilitate compliance in a broader way.
“Although the Bureau has a robust supervision program, it has consistently chosen enforcement over supervision to address alleged compliance issues,” O’Neil wrote on behalf of the ABA, noting that over-reliance on enforcement wastes public and defendant resources, risks inadequate consumer redress through the court process and leads to a less transparent financial marketplace.”
Click here to read the letter.
CFPB finalizes amendments to Federal mortgage disclosure requirements under TILA
The Bureau of Consumer Financial Protection (CFPB) recently finalized amendments to Federal mortgage disclosure requirements under the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA) that are implemented in Regulation Z.
These amendments relate to when a creditor may compare charges paid by or imposed on the consumer to amounts disclosed on a Closing Disclosure, instead of a Loan Estimate, to determine if an estimated closing cost was disclosed in good faith.
The final rule is effective 06/01/2018. Click here to view the notice.
OBA education corner …
The OBA Convention next week (have you registered yet?), but it’s not the only thing taking place! Take note of the following:
- Common Pitfalls of ARM Disclosures, May 22, webinar — Many financial institutions have automated the ARM disclosure process, but violations still occur.
- New BSA Officer Training, May 24, webinar — You have been appointed the new Bank Secrecy Officer for your bank. You now feel like a deer caught in the headlights–what to do, where to start, who can help?
- Bank Call Report Preparation for Beginners: Five-Part Series, June 1, 8, 15, 22, 29, webinars — Designed for bankers new to call report preparation, this series will cover basic reporting requirements, operational schedules, loan schedules, maturity and repricing, and Basel III risk based capital, plus recent accounting changes affecting the Call Report.