CFPB

22 04, 2024

Karen Petrou: Credit-Card Surcharges: One Inflationary Culprit the CFPB Could Catch

2024-04-22T09:29:18-04:00April 22nd, 2024|The Vault|

One could go on – indeed many do – about whether inflation is showing enough signs of a slow-down to warrant lower interest rates.  I’ve said before that lower rates won’t have the housing-affordability benefits advocates expect, but this doesn’t address the underlying issue of just how hot inflation may be running.  I’m not sure if anyone – including the Fed – really knows, but battles on my neighborhood listserv validated by growing data make clear that federal data overlook one hidden price hike driving more and more Americans flat-out crazy:  credit-card surcharges that are nothing but shadow price hikes of as much as four percent.

In fact, card surcharges are the epitome of the “junk” fees the CFPB has vowed to quash.  The credit-card late fees the Bureau lambasts are due to consumer sins of omission or commission – i.e., consumers have the ability – I would say obligation – to keep their card debt within amounts they can honor as well as the choice to pay on time.  How much should be charged for paying late is obviously a point of discussion, but that consumers have a duty to pay on time is indisputable.

In sharp contrast, card surcharges are often unavoidable and ill-disclosed.  The neighborhood listserv is something of a group rant, but it does include interesting illustrations of hidden credit-card surcharges that are often – think car-repair shops – meaningful and material add-on prices discovered only after the fix, quite literally, is in.

D.C. is an …

22 04, 2024

M042224

2024-04-22T09:33:25-04:00April 22nd, 2024|6- Client Memo|

Credit-Card Surcharges: One Inflationary Culprit the CFPB Could Catch

One could go on – indeed many do – about whether inflation is showing enough signs of a slow-down to warrant lower interest rates.  I’ve said before that lower rates won’t have the housing-affordability benefits advocates expect, but this doesn’t address the underlying issue of just how hot inflation may be running.  I’m not sure if anyone – including the Fed – really knows, but battles on my neighborhood listserv validated by growing data make clear that federal data overlook one hidden price hike driving more and more Americans flat-out crazy:  credit-card surcharges that are nothing but shadow price hikes of as much as four percent.

m042224.pdf

19 04, 2024

DAILY041924

2024-04-19T16:22:08-04:00April 19th, 2024|2- Daily Briefing|

GAO Gives CFPB Clear Bill of Financial Health

The GAO today released the report initially scheduled for the Financial Institutions Subcommittee hearing earlier this week convened to discuss CFPB financial management.

Deadline Set for Comment on Controversial FDIC Merger Proposal

The Federal Register today sets the comment deadline on the FDIC’s request for comment on its bank merger policy (see FSM Report MERGER15).

House Bill Revises Exam Appeal Process

HFSC Vice Chair Hill (R-AR) and Rep. Scott (D-GA) yesterday introduced H.R. 8071, a bill to create an FFIEC independent review officer for banks seeking review of supervisory judgements and require supervisors to respond more quickly to bank queries.

FDIC’s Paperwork Request Illuminates Proposed Merger Policy

In conjunction with today’s publication of the FDIC’s proposed merger-policy rewrite (see FSM Report MERGER15) comes a proposed change in the filings that would need to accompany any merger application submitted to the FDIC.

DAILY041924.pdf

17 04, 2024

DAILY041724

2024-04-17T17:36:07-04:00April 17th, 2024|2- Daily Briefing|

Global Regulators Tackle NBFI Margining, Collateral Transformation

As it has long promised, the FSB today issued a consultation on standards designed to buttress derivatives, commodity, and securities-financing markets under stress through more stringent margining and collateral requirements.

Basel Head Says Go Slow re AI Risk, Supervisory Models

Basel’s Secretary General, Pablo Hernández de Cos, today focused on AI’s risk-reward profile in the banking sector, concluding that it raises a series of profound questions global regulators must work cooperatively to address.

Lummis, Gillibrand Begin Senate Stablecoin Debate

As long anticipated, Sens. Lummis (R-WY) and Gillibrand (D-NY) today introduced a significantly revised version of their 2022 Bill (see FSM Report CRYPTO28) laying out U.S. stablecoin standards.

FIO Subpoena Power Faces Rollback

At HFSC’s mark-up today, the committee began with Rep. Fitzgerald’s (R-WI) Insurance Data Protection Act, H.R. 5335, which would repeal the Federal Insurance Office’s authority to subpoena insurance companies for data collection.

HFSC Likely to Pass RegTech Bill

At HFSC’s extended mark-up today, the committee turned to H.R. 7437, a bipartisan bill that would require federal banking regulators to regularly review and report to Congress on their use of technology to ensure they’re equipped to address threats to the financial system.

HFSC Set to Pass AOCI Recognition, Systemic-Risk Designation Study Measures

Continuing our coverage of today’s mark-up, HFSC was generally supportive of the two bills on the agenda from Democrats, H.R. 4206 from Rep. Sherman (D-CA) requiring large banks with available for sale securities to mark to market …

16 04, 2024

DAILY041624

2024-04-16T17:10:39-04:00April 16th, 2024|2- Daily Briefing|

House GOP Takes on New Merger Guidelines

The House Small Business Committee today sent a GOP letter to the FTC and Justice Department  strongly protesting new merger guidelines (see FSM Report MERGER13) on grounds that they sharply curtail needed small-business capital.

House Hikes Iran Sanctions

Working through a series of sanctions bills in the wake of recent geopolitical developments, the House yesterday voted 294-105 to advance H.R. 5921, a bill introduced by Rep. Huizenga (R-MI) that prohibits Treasury from authorizing transactions by U.S. financial institutions in connection with Iranian imports or exports other than food, medicine, and other humanitarian assistance.

House Passes Bill Targeting China-Iran Petroleum Trade

Continuing its response to recent geopolitical events, the House yesterday voted by a 383-11 margin to pass H.R. 5923, a bill from Reps. Lawler (R-NY) and Gottheimer (D-NJ) that would require the President to periodically determine if any Chinese financial institutions have purchased petroleum or petroleum products from Iran, stating that U.S. financial institutions also may not open or maintain certain accounts with Chinese institutions that have done so.

Warren Again Targets OCC Merger Decisions

Continuing recent attacks on the OCC’s approach to mergers, Sens. Warren (D-MA) and Blumenthal (D-CT) yesterday sent a letter to Acting Comptroller Hsu sharply criticizing the agency’s decision first to allow NYCB to acquire Flagstar bank and then do the same shortly thereafter for Signature.

OCC Toughens LCR, NSFR via New Reporting Requirements

The OCC today sought public comment as required by law for …

12 04, 2024

Al041524

2024-04-12T16:37:57-04:00April 12th, 2024|3- This Week|

The CFPB Stand-Off

On Tuesday, the HFSC Financial Institutions Subcommittee holds yet another hearing which Republicans hope will so embarrass the CFPB that their decades-long quest to redesign or even kill it gains traction ahead of critical litigation and the national election.  The nominal topic of the hearing is the Bureau’s financial audit, and Republicans will surely make as much of it as they can to damage Director Chopra’s leadership.  However, the real target is the Bureau’s race to finalize a series of substantive actions ahead of its own political challenges should litigation and the election go against it.  The most immediate rule on the GOP’s firing line is the credit-card late-fee standard (see FSM Report CREDITCARD37), a rule now enmeshed in court decisions and challenges of unprecedented intricacy that nonetheless appear likely leading to a near-term injunction blocking the rule as lenders devoutly desire.

Al041524.pdf

12 04, 2024

DAILY041224

2024-04-12T16:38:09-04:00April 12th, 2024|2- Daily Briefing|

Barr, Tillis Warn CFPB Against Mandatory-Arbitration Ban

HFSC Financial Institutions Chair Barr (R-KY) and Sen. Tillis (R-NC) sent a letter to the CFPB today threatening to invoke the Congressional Review Act to overturn any newly-proposed mandatory-arbitration ban from the CFPB, warning that it would violate the CRA.  This is based on the enactment of a reversal of the agency’s prior ban in 2017 which the Members state now cannot be vitiated by any proposal close to the one revoked.

IOSCO Adds CD, AI Workstreams to Revised Work Plan

IOSCO today announced revisions to its 2024 work plan, adding new workstreams to address opacity and illiquidity in the single-name CDS market as well as the integrity, financial stability and investor protection associated with AI along with monitoring financial-asset tokenization.

Daily041224.pdf

8 04, 2024

DAILY040824

2024-04-08T16:31:06-04:00April 8th, 2024|2- Daily Briefing|

Schumer Weighs In Against CapOne/Discover Deal

Senate Majority Leader Schumer (D-NY) made it clear that the Capital One/Discover merger faces an unusually high hurdle:  strong opposition with the power to pack even more of a political punch than concerns voiced so far by progressive Democrats.

Treasury IMF Presses for Bank Insurance, Pension, Bond-Fund Rules Restricting Private-Credit Interconnection

The IMF continued its pressure on private credit, finding that the sector clocked in last year at $2.1 trillion with three quarters of this in the U.S. and soon to eclipse syndicated lending and high-yield bonds.

GOP Introduces CRA Resolutions Challenging Climate-Risk Rules

Splitting the issue among various GOP sponsors, GOP members have introduced Congressional Review Act resolutions to overturn climate-risk rules finalized by the OCC (H.J. Res 124 by Rep. Donalds [R-FL] et al.), the FRB (H.J. Res 125 by Rep. Fitzgerald [R-WI] et al.), and FDIC (H.J. Res 126 by Rep. Houchin [R-IN] et al.).

CFPB Criticizes Credit Report Inaccuracies for Victims of Human Trafficking, Identity Theft

A CFPB report criticized furnishers for providing false or fraudulent information to consumer reporting companies and accused consumer reporting agencies of failing to ensure the accuracy of credit reports related to victims of human trafficking and identity theft, finding significant non-compliance with its 2022 rule requiring reporting companies to block adverse information.

FRB-NY Finds that Brokers with BHCs are Better, But Are They?

The Federal Reserve Bank of New York’s blog today posted a brief about a May 2021 study …

8 04, 2024

GSE-040824

2024-04-08T15:25:01-04:00April 8th, 2024|4- GSE Activity Report|

Discounting Discount Points

It wasn’t hard for us to forecast that, after NEC Director Brainard endorsed CFPB Director Chopra’s jihad against mortgage “junk fees,” that the discount points that received particular opprobrium would be moved up the priority ladder for federal restriction.  A Friday CFPB report makes clear that this is indeed very much in the works.  We expect new standards to mandate additional protections for borrowers through more complex disclosures, sharp restrictions on comparison-shopping and lead-generation sites, and maybe even a UDAAP edict requiring that discount points be in a borrower’s best interest based on the likely break-even point.

GSE-040824.pdf

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