Top Story Compliance Related

The Federal Reserve System has released testimony of Vice Chairman for Supervision Randal K. Quarles before the House Committee on Financial Services, in the Board of Governors' semiannual report on supervision and regulation. His presentation (1) reviewed the current condition of the nation's banking institutions; (2) reviewed the Board's regulatory and supervisory agenda in light of the efficiency, transparency, and simplicity principles that enhance effectiveness; and (3) touched upon the Board's engagement with foreign regulators.

The OCC will host two workshops at the Hilton Omaha, May 22 and 23, for directors of national community banks and federal savings associations.

• The Risk Governance workshop on May 22 provides practical information for directors to effectively measure and manage risks. The workshop also focuses on the OCC’s approach to risk-based supervision and major risks in the financial industry.
• The Compliance Risk workshop on May 23 focuses on the critical elements of an effective compliance risk management program. The workshop also covers major compliance risks and critical regulations. Topics of discussion include the Bank Secrecy Act, Flood Disaster Protection Act, Fair Lending, Home Mortgage Disclosure Act, Community Reinvestment Act, and other compliance areas of interest.

As part of its most recent semi-annual report to Congress (see also our earlier Top Story on the report), the CFPB listed its plans for upcoming rules.

• "Payday loans" rule: The Bureau intends to open a rulemaking to reconsider the 2017 final rule. The current rule's applicable compliance date isn't until August 2019.
• Regulation CC: The CFPB intends to work with the Federal Reserve to issue jointly a rule that addresses provisions within the Bureau's purview (those affecting funds availability and disclosures).
• Debt collection: The agency will work toward releasing a proposal concerning FDCPA collectors' communications practices and consumer disclosures.
• HMDA: The Bureau intends to open a rulemaking to reconsider various aspects of the 2015 rule, which could involve issues such as the institutional and transactional coverage tests and the rule's discretionary data points (those not specifically mandated by HMDA as amended by the Dodd-Frank Act).
• Regulation P: The Bureau is working toward finalizing an amendment to the regulation on annual notice requirements.
• Regulation Z: The CFPB also intends to finalize a proposed amendment related to the use of closing disclosures to determine good faith disclosure of estimated closing costs.

No projected dates were included with these objectives.

The Federal Trade Commission has announced that three marketers who allegedly sold phony debt relief services, including fake loans, have agreed to be banned from selling debt relief, credit repair and financial products and services, to be banned from telemarketing, and to turn over assets worth approximately $35 million dollars, under settlements with the Commission and the State of Florida. The settlement orders, if entered by the court, will resolve charges against the marketers, who allegedly convinced people to pay hundreds or thousands of dollars a month by falsely promising to resolve their debts and improve their credit. Over time, victims found their debts unpaid, their accounts in default, and their credit scores lower, some were sued by their creditors, and some were forced into bankruptcy.

OFAC has announced John E. Smith will be leaving his position as its Director in early May 2018. Mr. Smith has served as OFAC's Director or Acting Director since February 2015 and has been with the agency for over 11 years, previously serving as its Deputy Director and as an Associate Director. Following Mr. Smith’s departure, Deputy Director Andrea M. Gacki will serve as the Acting Director of OFAC.

The Fed and the OCC have issued a press release and a proposed rule that would further tailor leverage ratio requirements to the business activities and risk profiles of the largest domestic firms. Currently, firms that are required to comply with the "enhanced supplementary leverage ratio" are subject to a fixed leverage standard, regardless of their systemic footprint. The proposal, which only applies to the eight financial companies designated as global systemically important banking companies, would instead tie the standard to the risk-based capital surcharge of the firm, which is based on the firm's individual characteristics. The resulting leverage standard would be more closely tailored to each firm. Comments will be accepted for 30 days following publication of the proposal.

Update: Published at 83 FR 17317, 4/19/18, with a 32-day comment period ending 5/21/18.

CFPB Acting Director Rick Mulvaney testified before the House Financial Services Committee yesterday, and presented the Bureau's annual report to Congress. In addition to urging that Congress act to restrain the Bureau (see earlier Top Story). Mulvaney said that the Bureau is revisiting several rules as it considers whether they impose "unnecessary burden or restrict consumer choice." He said that, in particular, the CFPB is reviewing the expanded data requirements under HMDA to the extent they are not required by the HMDA amendments in the Dodd-Frank Act, and the Bureau's small-dollar loan rule.

The CFPB has announced the twelfth in its series of a dozen Requests for Information (RFIs) under Acting Director Mick Mulvaney's "Call for Evidence" initiative. This last RFI of the series, which asks for feedback on the CFPB's handling of consumer complaints and inquiries, is scheduled for publication on Tuesday, April 17, with a 90-day comment period ending on July 16, 2018.
UPDATE: Publication date corrected to April 17, and comment period corrected to 90 days.

The full "Call for Evidence" RFI series with comment deadlines:

1. Civil Investigative Demands and Associated Processes - 4/26/18
2. Rules of Practice for Adjudication Proceedings - 5/7/18
3. Enforcement Processes - 5/14/18
4. Supervision Program - 5/21/18
5. External Engagements - 5/29/18
6. Public Reporting Practices of Consumer Complaint Information - 6/4/18
7. Rulemaking Processes - 6/7/18
8. Adopted Regulations and New Rulemaking Authorities - 6/19/18
9. Inherited Regulations and Inherited Rulemaking Authorities - 6/25/18
10. Guidance and Implementation Support - 7/2/18
11. Financial Education Programs - 7/9/18
12. Consumer Complaint and Inquiry Handling Processes - 7/16/18

Federal Trade Commission Acting Chairman Maureen K. Ohlhausen has released the agency’s 2017 Annual Highlights detailing its continued efforts to protect American consumers and promote competition without unnecessarily burdening legitimate businesses. “This year, the FTC has pressed forward with aggressive agendas for enforcing the nation’s consumer protection and competition laws,” said Ohlhausen. “The Commission also made major strides in other key areas, such as promoting economic liberty and helping military consumers and small businesses.”

The Federal Reserve Board has published its annual report to Congress detailing the actions the Fed has taken to fulfill requirements outlined in section 308 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), as amended by the Dodd-Frank Act.