CFPB – Page 2 – Federal Financial Analytics

5 04, 2024

DAILY040524

Shane Smith2024-04-05T16:15:49-04:00April 5th, 2024|2- Daily Briefing|

CFPB Targets FHA, Refi Discount Points

The CFPB released a report finding that the percentage of homebuyers paying discount points roughly doubled from 2021 to 2023, with the increase more pronounced for buyers with lower credit scores.

Treasury KYC Proposal Coming This Year

In remarks, Treasury Undersecretary Brian Nelson made it clear that, as we anticipated, FinCEN’s pending RFI on KYC procedures will be reflected later this year in formal rulemaking as required by the 2021 law (see FSM Report AML133).

Bowman Focuses on Limited Liquidity-Resilience Reform

Building on her comments earlier this week regarding liquidity regulation, FRB Gov. Bowman said that regulators should “encourage, but not mandate” the exercise of contingent-funding plans, noting a fine line between bank supervision and interfering with bank management.

FSB Secretary General Calls For Tokenization Research

Reiterating the FSB’s ongoing stablecoin and digital-asset work, the Board’s Secretary General, John Schindler, today indicated that it would be useful for researchers to explore the potential use cases, benefits and risks of tokenization.

Daily040524.pdf…

3 04, 2024

DAILY040324

Eliza Allen2024-04-03T17:21:51-04:00April 3rd, 2024|2- Daily Briefing|

Bowman Wants Policy Review, Fed-Operational Improvements Ahead of New Liquidity Regs

Turning from mergers to the Fed’s lender-of-last-resort role, Gov. Bowman today argues that new liquidity policies require careful review before any new rules are adopted.

Fed Treads Carefully in New Global Money-Tokenization Project

The BIS today announced a new program exploring ways in which tokenizing central-bank and bank money for wholesale transactions on programmable platforms would benefit the monetary system.

Powell Defends Independence, Mandate Limits

In remarks today on monetary policy and Fed independence, Chair Powell was at pains to emphasize that climate risk was outside the Federal Reserve’s mandate.

FHFA Treads Cautiously Towards FHLB Reform

Issuing a minor ruling regarding Puerto Rico cooperatives, FHFA today also laid out its 2024 priorities following last year’s report on the Home Loan Bank System.

Barr Stands by CRA Rule

Responding to questions about the court injunction on the CRA rule, FRB Vice Chair Barr today stated that the rules are restated expectations within the boundaries of the Act and Congress intended the agencies to update the 1977 law.

Chopra: Merger Approval Requires Affirmative, Additive Community Benefit

Building on his comments when the FDIC board voted 3-2 to issue its merger proposal (see FSM Report MERGER15), CFPB Director Chopra today doubled down on the view that bank mergers should only be approved if there is demonstrable community benefit over an extended period of time.

Daily040324.pdf…

1 04, 2024

Daily040124

Eliza Allen2024-04-01T16:24:02-04:00April 1st, 2024|2- Daily Briefing|

FRB-NY: Experience Begets Overdraft Fee Knowledge

Perhaps reflecting the Biden Administration’s examination of overdraft fees, a new report from the Federal Reserve Bank of New York staff on overdraft credit found that experienced overdrafters are roughly twice as likely to know their bank’s overdraft fee than customers who have not overdrawn in the past year. The report also finds that half of customers surveyed did not know their bank’s overdraft fee, which the report calls “potentially worrisome,” but notes that 41 percent of respondents are also indifferent to their bank’s overdraft policies.

Barr Takes Over CFPB Card-Fee Fight

As anticipated, HFSC Financial Institutions Subcommittee Chair Barr (R-KY) has introduced H.J. Res. 122, the same CRA resolution overturning CFPB’s late fee rule introduced last week by freshman Rep. Ogles (R-TN). Reports indicate poor communication between the Chair and junior member, and we expect this resolution to be the one that moves forward.

Daily040124.pdf…

26 03, 2024

DAILY032624

Eliza Allen2024-03-26T16:39:52-04:00March 26th, 2024|2- Daily Briefing|

CBO Flags Long-Term Fiscal Risk to Financial Stability

CBO’s latest long-term fiscal forecast now includes a financial-stability warning absent from the Fed’s recent analysis (see Client Report SYSTEMIC97) and FSOC’s annual report (see Client Report FSOC29): the rising U.S. debt burden.

Chopra Expands CFPB Attack to Card Rewards

Undaunted by a CBA audience suing him on many actions, CFPB Director Chopra today gave a rousing defense of his agency’s credit-card late fee rule (see FSM Report CREDITCARD37), making clear he will vigorously defend it in the courts.

CFPB/FTC Press for More Tech-Finance Enforcement

Building on the Bureau’s recent efforts to limit AI use in comparison-shopping and other consumer-finance applications (see FSM Report CONSUMER56), the CFPB joined the FTC today in issuing a statement coordinating federal and state enforcement efforts against generative AI in particular and digital consumer-finance products more generally.

HFSC, AG Republicans Press SEC on Crypto-Custody Standards

HFSC Chair McHenry (R-NC) and House Ag Chair Thompson (R-PA), alongside 46 Republican members today sent a letter to SEC Chair Gensler calling for clarification the position on special purpose broker dealer’s (SPBD) ability to custody non-security digital assets, the agency’s willingness to address SPBD non-compliance, the regulatory classification of ETH, and the SEC’s position regarding Prometheum’s custody services announcement.

Daily032624.pdf…

21 03, 2024

DAILY032124

Eliza Allen2024-03-21T17:00:13-04:00March 21st, 2024|2- Daily Briefing|

FDIC Plans Merger Squelch

Both the policy and politics of the FDIC’s proposed merger policy follow that of its 2022 RFI (see FSM Report MERGER9), a very stringent approach to bank-merger review that split the FDIC 3-2 on party lines. We will shortly provide clients with an in-depth analysis of the proposed approach, approved on a 3-2 vote. It tracks much in the OCC’s proposal (see FSM Report MERGER14) but is still more stringent in several key areas. Notably, it does not rely on qualitative financial-stability considerations, instead setting a $100 billion threshold for additional scrutiny.

Chopra Wants Far Tougher Bank-Merger Policy

CFPB Director Chopra elaborated today on his comments at the FDIC meeting, saying that he thinks the proposal is fine as far as it goes but that federal policy should go considerably further to curtail bank consolidation. Actions he advocates include hard caps on bank growth and size (presumably meaning a limit on organic growth as well as via acquisition) and a roll-back of the systemic exemption in failing-bank acquisitions to block any future JPM/FRC-style transactions.

Daily032124.pdf…

15 03, 2024

Daily031524

Arezou Rafikian2024-03-15T17:22:26-04:00March 15th, 2024|2- Daily Briefing|

Effective Date for Late-Fee Ban Set for May

Publication in the Federal Register today sets the effective date for the CFPB credit-card late fee regulation (see FSM Report CREDITCARD37) as May 14, 2024. The rule sets a controversial $8 safe harbor for late fees by larger issuers and mandates a stringent fee-calculation methodology for smaller issuers. The Bureau did, however, forbear setting limits on other card fees such as those associated with over-limit purchases. Litigation contesting the rule is already in the works along with a GOP resolution to overturn it.

Vance Goes for Nuclear Financial-Market Option vs. China

Sen. Vance (R-OH) has introduced S. 3945, a bill to ban China and entities it governs from U.S. capital, bond, and financial markets if Treasury determines that it has engaged in sovereign-debt restructuring in violation of global law and financial-market practice. The goal here is clearly to force China to cease the practice of throwing emerging-market debtors into default on debt it has extended while securing repayment or other beneficial treatment for itself.

Daily031524.pdf…

15 03, 2024

GSE-031524

Arezou Rafikian2024-03-15T17:20:04-04:00March 15th, 2024|4- GSE Activity Report|

Fees on the Firing Line

If it wasn’t clear before that the CFPB’s blog post targeting “junk” mortgage fees meant business, NEC Director Brainard’s comments endorsing it brought this on home. No matter the controversy and litigation, the Bureau has toppled credit-card late fees at least for now. It clearly plans a like-kind assault on mortgage costs, so we here turn to an analysis of which are on the firing line and how deadly the Bureau’s shots are likely to prove.

GSE-031524.pdf…

14 03, 2024

DAILY031424

Eliza Allen2024-03-14T16:33:10-04:00March 14th, 2024|2- Daily Briefing|

Bipartisan Senators See More ILC Charters

Led by Sen. Romney (R-UT), bipartisan senators generally from states with large ILC presence or interest urged the agency to advance pending ILC charters and consider new ones. The Senators oppose regulatory actions that may “target” ILC charter applications, expressing concerns about delays in the FDIC’s decision process.

Global Supervisors Target Mortgages, BNPL, Fintech as Top NBFI Systemic Priorities

An FSI report today recommends a holistic approach to regulating NBFI retail lenders, urging a policy mix increasing NBFI oversight. This may well be right, but it will take statutory change in nations such as the U.S. to achieve it.

New Open-Standard-Setting for Open-Banking Set for Stringent Eligibility Standards

CFPB Director Chopra now states that the open-banking regulation regarding consumer data rights (see FSM Report DATA4) will be finalized in the fall, with proposed new standards for standard-setters released ahead of time so that the final rule addresses both issues. Mr. Chopra is concerned that some forms of standard-setting organizations “weaponize” data to enhance their competitive position.

Daily031424.pdf…

14 03, 2024

CREDITCARD37

Eliza Allen2024-03-14T15:57:19-04:00March 14th, 2024|1- Financial Services Management|

Credit-Card Late Fee Regulation

Following a very controversial proposal, the CFPB has finalized credit-card late-fee restrictions in a final rule that does not differ significantly from the proposal on its key point: elimination of the manner in which inflation adjustments are now made by credit-card lenders when it comes to late fees. The rule will sharply curtail issuer revenue related to these fees, likely affecting the market as a whole rather than the large issuers expressly covered by the new rule. Although the Bureau did not go as far as proposed in several areas, its core late-fee standard could lead lenders to raise interest rates, curtail rewards, reduce high-risk exposures, or otherwise redesign products with adverse implications for borrowers who meet their monthly-payment requirements in a timely fashion.

CREDITCARD37.pdf…

13 03, 2024

Daily031324

Arezou Rafikian2024-03-13T17:02:16-04:00March 13th, 2024|2- Daily Briefing|

HFSC GOP Slams CFPB Nonbank Payment Company Proposal

As anticipated, today’s HFSC Digital Assets Subcommittee hearing on the CFPB’s proposed standards for certain nonbank payment companies featured a strong GOP attack premised as much on the Bureau’s work to date as on this proposal (see FSM Report PAYMENT27).

Daily031324.pdf…