ABA Dodd-Frank Tracker

CFTC Roundtable to Discuss Designated Contract Markets

noreply@blogger.com (ABA Regulatory Policy Staff 2) — Fri, 25 May 2012 16:17:00 +0000

The CFTC today announced it will hold a public roundtable on Tuesday, June 5, 2012, from 9:30 a.m. to 12:30 p.m., to discuss the proposed regulations implementing Core Principle 9 for designated contract markets.

The roundtable discussion will focus on: centralized market trading requirement; certain aspects of the requirements for exchange of derivatives for related position transactions; and reporting time frame for block transactions in futures contracts.

Read more.

Supreme Court Rejects CFPB’s Amicus Brief Arguments

noreply@blogger.com (ABA Regulatory Policy Staff 2) — Fri, 25 May 2012 16:12:00 +0000

The Supreme Court released its unanimous decision yesterday in Freeman v. Quicken Loans.

The case dealt with the issue of whether section 8(b) of the Real Estate Settlement Procedures Act (RESPA) should be interpreted to require the division of a fee between two entities, or whether the language would permit liability on a single party acting alone to charge an unearned fee. The Supreme Court, relying on a plain-language analysis, held that the sharing of a fee was required.

The Court’s decision rejected the CFPB’s amicus brief urging reversal of the Fifth Circuit’s ruling and underscored that administrative agencies are not free to expand federal consumer protection statutes beyond the boundaries established by Congress.

Read the Court’s ruling and opinions.

The Week Ahead: May 28 - June 1

noreply@blogger.com (ABA Regulatory Policy Staff) — Fri, 25 May 2012 16:01:00 +0000

Tuesday

Comments Due FDIC: FDIC Recievership. Read more.
Comments Due FDIC: Large Bank Assessments. Read more.

Wednesday

Comments Due CFTC: Swap Regulation Temporary Exemptive Relief Amendments. Read more.
Final Rule FDIC: Treatment of Mutual Insurance Companies. Read more.

Thursday

9:30 a.m. - 4:30 p.m. Meeting CFTC: Proposed Volcker Rule. Read more.
10:00 a.m. - 11:00 a.m. HFS Markup: Consolidated Assets for Purposes of Exempting Instruments. Read more.

Friday

Comments Due SEC: Investor Advisory Committee Meeting. Read more.

Dodd-Frank Calendar.

ABA Fair Lending Toolbox

CFPB Proposes Rule on Supervising Nonbanks

noreply@blogger.com (ABA Regulatory Policy Staff 2) — Fri, 25 May 2012 14:02:00 +0000

The CFPB is requesting comments on a proposed rule which would set up procedures to supervise nonbanks that may have engaged in activities that pose risks to consumers.

The CFPB is authorized by the Dodd-Frank Act to require reports from and conduct examinations of nonbanks subject to its supervision. The proposed rule sets procedures the CFPB would follow when notifying a nonbank that it is being considered for supervision. The proposal also creates a mechanism for nonbanks to file a petition to terminate supervision authority after two years.

Comment are due to the CFPB on July 24, 2012.

Read more.
View the proposed rule.

CFTC Roundtable to Discuss Volcker Rule

noreply@blogger.com (ABA Regulatory Policy Staff 2) — Fri, 25 May 2012 12:45:00 +0000

The CFTC announced it will hold a public roundtable on Thursday, May 31, from 9:30 a.m. to 4:30 p.m., to discuss the proposed regulations to implement Section 619, the Volcker Rule, of the Dodd-Frank Act.

The roundtable will consist of two panels that are composed of a variety of market participants and members of the public. The first panel, starting at 9:30 a.m., will discuss the various hedging provisions and requirements of the CFTC’s proposed Volcker Rule. The second panel will start at 2:00 p.m., and discuss the market-making sections of the CFTC’s proposed Volcker Rule. The roundtable will help the Commission by providing additional public input for the final rulemaking.

View the meeting agenda.

Cordray: CFPB Has Duty to Ensure Prepaid Cards’ Safety

noreply@blogger.com (ABA Regulatory Policy Staff 2) — Thu, 24 May 2012 12:01:00 +0000

At a field hearing yesterday in Durham, N.C, CFPB Director Richard Cordray said the CFPB has a duty to ensure that prepaid cards are safe.

[I]nnovation can bring great benefits to consumers and can provide those outside the traditional banking system with more access to financial products that meet their needs.

But we have a duty to make sure these products are safe for consumers and that prepaid card issuers do not make money by relying on tricks or traps that are unsustainable for cardholders.

Cordray noted that the unbanked and underbanked have driven the growth in prepaid cards, and they especially need products whose costs and risks are clear upfront.

Yesterday, we posted on the CFPB's filing of an Advance Notice of Proposed Rulemaking (ANPR) requesting comments on general purpose reloadable (GPR) prepaid cards, as the bureau considers extending Regulation E protections to GPR cards. At the field hearing Cordray also spoke of the ANPR.

Read more regarding the ANPR.
Read Cordray’s full speech.
Watch the field hearing on CFPB's blog.

CFTC & SEC Define Swaps Terms

noreply@blogger.com (ABA Regulatory Policy Staff 2) — Wed, 23 May 2012 14:16:00 +0000

The CFTC and SEC are adopting new rules and interpretive guidance under the Commodity Exchange Act (CEA), and the Securities Exchange Act of 1934 (Exchange Act), to further define the terms "swap dealer," "security-based swap dealer," "major swap participant," "major security-based swap participant," and "eligible contract participant" in accordance with the Dodd-Frank Act.

The joint final rule and joint interim final rule are effective July 23, 2012.

Read more.

Extending Regulation E Protection to Prepaid Cards

noreply@blogger.com (ABA Regulatory Policy Staff 2) — Wed, 23 May 2012 12:15:00 +0000

The CFPB filed an Advance Notice of Proposed Rulemaking (ANPR) requesting comments on general purpose reloadable (GPR) prepaid cards, as the bureau considers extending Regulations E protections to GPR cards.

Specifically the CFPB would like information regarding how prepaid cards work, including costs, benefits, and risks to consumers. The ANPR requests comment on ten broad questions regarding GPR cards which fall into four categories: regulatory coverage of products by some or all of Regulation E, product fees and disclosures, product features, and other information on GPR cards.

Comments will be due 60 days from the official publication of the ANPR in the Federal Register.

Read the ANPR.

CFTC O’Malia : Dodd-Frank Rulemakings – We Can Do Better

noreply@blogger.com (ABA Regulatory Policy Staff 2) — Tue, 22 May 2012 15:44:00 +0000

CFTC Commissioner Scott O’Malia spoke at the Annual Nuclear Industry Conference today calling for the CFTC to create “rules more black and white.”

The Commission [the CFTC] needs to make its rules more black and white. We can foster cost-effective compliance by clearly articulating the purpose and desired effect of our regulatory requirements.

The Commission’s objective in implementing the Dodd-Frank Act should be compliance, and not enforcement.

We must look at developing a more thorough process for conducting cost-benefit analyses that appropriately inform our rulemakings of the challenges facing the market.

Read O’Malia’s full speech.

CFTC Outlines Dodd-Frank Efforts

noreply@blogger.com (ABA Regulatory Policy Staff 2) — Tue, 22 May 2012 15:43:00 +0000

CFTC Chairman Gary Gensler wrote to Senate Banking Committee Chairman Tim Johnson (D-SD) last week, outlining the CFTC’s rule writing activities under the Dodd-Frank Act.

To date, the CFTC has completed 32 reforms to bring oversight to the swaps market. The Commission is on track to complete the approximately 20 remaining reforms this year.

Gensler also commented on the CFTC’s international harmonization efforts for swaps regulation, stating “discussions have focused on clearing and trading requirements, clearinghouses more generally and swaps data reporting issues, among many other topics.”

Read the full letter.

SEC & CFTC Implementing Derivatives Reform

noreply@blogger.com (ABA Regulatory Policy Staff 2) — Tue, 22 May 2012 15:02:00 +0000

The Senate Banking Committee will hold an open hearing today at 10:00 a.m. entitled “Implementing Derivatives Reform: Reducing Systemic Risk and Improving Market Oversight.” SEC Chairman Mary Schapiro and CFTC Chairman Gary Gensler will give testimony.

Title VII of the Dodd-Frank Act creates an new regulatory regime for over-the-counter (OTC) derivatives, authorizing the SEC and CFTC to write a number of new regulations.

In her prepared testimony SEC Schapiro stated, in the near term the SEC expects to complete the last of the core elements of the proposal phase, in particular, rules related to the financial responsibility of security-based swap dealers and major security-based swap participants. The SEC also expects to complete joint rulemaking on the product definitions with the CFTC in the “very near term.”

The witnesses also discussed the global impact of these reforms. CFTC Gensler outlined the CFTC’s upcoming proposal on the cross-border application of Dodd-Frank swaps market reforms for the committee. Gensler yesterday introduced the upcoming proposal at the FINRA Annual Conference.

During the Q&A session following the testimony, both Schapiro and Gensler stated it is not their agencies’ desire to remove risk from the banking industry through these regulations, remarking banks have managed risk for the markets for years and do markets a great service by managing this risk.

Watch the hearing live.
Read SEC Chairman Mary Schaprio’s testimony.
Read CFTC Chairman Gary Gensler’s testimony.

FDIC Advisory Committee Meeting on Community Banks

noreply@blogger.com (ABA Regulatory Policy Staff 2) — Tue, 22 May 2012 12:14:00 +0000

The FDIC Advisory Committee will hold an open meeting on community banks Tuesday, June 5, 2012 from 8:30 a.m. to 3:00 p.m.. The Committee will provide advice and recommendations on a broad range of policy issues that have particular impact on small community banks throughout the United States and the local communities they serve, with a focus on rural areas.

Read more.

Treasury Assessment Fee Rules to Fund OFR

noreply@blogger.com (ABA Regulatory Policy Staff 2) — Tue, 22 May 2012 12:13:00 +0000

The Treasury has issued a final rule and interim final rule to implement Section 155 of the Dodd-Frank Act which directs Treasury to establish an assessment schedule for bank holding companies with total consolidated assets of $50 billion or greater and nonbank financial companies supervised by the Federal Reserve to collect assessments equal to the total expenses of the Office of Financial Research (OFR).

Included in OFR’s expenses are expenses of the Financial Stability Oversight Council (FSOC), under Section 118, and certain expenses of the FDIC, under Section 210 of the Dodd-Frank Act.

The assessment schedule for bank holding companies is issued as a final rule. The assessments for nonbank financial companies is issued as an interim final rule.

The rules will allow Treasury to collect semiannual assessment fees from these companies beginning on July 20, 2012.

The final rule will be effective July 20, 2012.
The interim final rule will be effective July 20, 2012.
Comment relating to the nonbank interim final rule are due by September 18, 2012.

Read more.

GAO Identifies CFPB Internal Control Issues

noreply@blogger.com (ABA Regulatory Policy Staff1) — Mon, 21 May 2012 17:27:00 +0000

GAO released a report today on the CFPB. GAO identified seven internal control issues that could adversely affect CFPB’s ability to meet its internal control objectives. These issues increase the risk of CFPB not preventing or promptly detecting and correcting the following:

Misappropriation of assets because of reliance on insufficient internal controls;
Unauthorized access, modification, or both of its data; and
Misstatements in its financial statements.

Read the report.

ABA Telebriefing: Fair Lending - Beyond the Basics

noreply@blogger.com (ABA Regulatory Policy Staff) — Mon, 21 May 2012 16:50:00 +0000

Fair lending is a critical issue for all bankers and they are finding themselves under the microscope more and more each day. Consumer groups and Congress are watching the fair lending arena like hawks. Every banking agency is keeping close tabs on compliance-related issues. And, the Consumer Financial Protection Bureau (CFPB) has devoted a new group to fair lending examinations and requirements.

On Tuesday, May 22 from 2:00 p.m. - 4:00 p.m. ABA will host a two-hour live telephone briefing where a panel of industry leaders will discuss some of the most critical fair lending issues every banker needs to know about. Topics will include:

Fair lending and redlining background and the practices that led to the many laws affecting today's banking industry.
The use of disparate impact and how it affects fair lending, including some pending developments using disparate impact theory.
Non-mortgage fair lending in credit cards and indirect auto lending since fair lending is not just housing and mortgages.

Senate to Hold Derivatives Hearing Tomorrow.

noreply@blogger.com (ABA Regulatory Policy Staff1) — Mon, 21 May 2012 16:39:00 +0000

The Senate Banking Committee will hold an oversight hearing on derivatives regulation tomorrow, Tuesday May 22, at 10:00 a.m. in 538 Dirksen. Securities and Exchange Commission Chairman Mary Schapiro and Commodity Futures Trading Commission Chairman Gary Gensler are scheduled to testify.

Read more.

Gensler Outlines Swaps Cross Boarder Regulation

noreply@blogger.com (ABA Regulatory Policy Staff 2) — Mon, 21 May 2012 12:26:00 +0000

CFTC Chairman Gary Gensler today will outline the CFTC’s upcoming proposal on the cross-border application of Dodd-Frank swaps market reforms as he addresses the FINRA Annual Conference.

Gensler stated the proposal will include interpretive guidance on how the reforms apply to cross-border swap activities and an overview as to when overseas swaps market participants, including swap dealers, can comply with Dodd-Frank reforms through reliance on comparable and comprehensive foreign regulatory regimes, or "substituted compliance."

The main elements of the proposal will likely included:

When a foreign entity transacts in more than a de minimis level of U.S. facing swap dealing activity, the entity would register under the CFTC's recently completed swap dealer registration rules.
What it means to be a U.S. facing transaction.
A tiered approach for requirements for overseas swap dealers.
Entity-level requirements would apply to all registered swap dealers, but in certain circumstances, overseas swap dealers could comply with these requirements through substituted compliance.
Transaction-level requirements would apply to all U.S. facing transactions, but for certain transactions between an overseas swap dealer and counterparties not guaranteed by or operating as conduits for U.S. entities, Dodd-Frank may not apply.

Read Gensler’s full speech.

SEC Names Managing Executive of Division of Trading and Markets

noreply@blogger.com (ABA Regulatory Policy Staff 2) — Fri, 18 May 2012 19:04:00 +0000

Friday afternoon the SEC announced James P. McNamara will be named to the newly-created position of Managing Executive of the SEC’s Division of Trading and Markets.

In the new position, McNamara will be responsible for the administrative and operational aspects of the Division of Trading and Markets, including human resources, budget, information technology, and strategic planning.

Read the SEC press release.

The Week Ahead: May 21 - May 25

noreply@blogger.com (ABA Regulatory Policy Staff) — Fri, 18 May 2012 15:25:00 +0000

Tuesday

10:00 a.m. - 12:00 p.m. SBC Hearing: Derivatives Reform. Read more.

Wednesday

12:00 p.m. - 1:00 p.m. CFPB Field Hearing: Prepaid Cards. Read more.

Friday

Comments Due: FRB Regulation Y Amendments. Read more.

All times in Eastern Standard Time.

See future events on the Dodd-Frank Calendar.

ABA Fair Lending Toolbox
The ABA Toolbox on Fair Lending will help bankers review the systems they have in place to continue their strong record of compliance with fair lending laws and regulations. This set of tools provides a framework for developing your Systems, Monitoring, Assessment, Accountability, Response, and Training needed. The concepts and tools discussed in this toolbox will help banks and their boards realize just how SMAART their programs are—and how little they need to do to adapt to current regulatory expectations.
Read More.

CFTC Approves Final Rule on Historical Swap Data

noreply@blogger.com (ABA Regulatory Policy Staff 2) — Fri, 18 May 2012 14:54:00 +0000

The CFTC approved a final rule on swap data recordkeeping and reporting requirements for counterparties to pre-enactment swaps, those swaps executed prior to passage of the Dodd-Frank Act, and transition swaps, those entered into between the law’s enactment date and the applicable compliance date for swap data recordkeeping and reporting.

The goal of the final rule for these swaps, collectively called historical swaps, is to specify what records must be kept and what data must be reported. The rule is also designed to ensure that historical swap data is available to regulators through swap data repositories (SDRs).

Read more.

CFPB Field Hearing On Prepaid Cards

noreply@blogger.com (ABA Regulatory Policy Staff 2) — Fri, 18 May 2012 13:52:00 +0000

The CFPB will hold a field hearing in Durham, North Carolina on prepaid cards on Wednesday, May 23, 2012, at 12:00 noon. The field hearing will feature remarks from CFPB Director Richard Cordray, as well as testimony from consumer and civil rights groups, industry representatives, and members of the public.

The event is open to the public but requires a reservation.

Read more & RSVP.

Senate Banking Committee to Hold Hearings on Dodd-Frank

noreply@blogger.com (ABA Regulatory Policy Staff 2) — Fri, 18 May 2012 12:12:00 +0000

Senate Banking Committee Chairman Tim Johnson (D-S.D.) announced the committee will hold two hearings, May 22 and June 6, on Wall Street oversight.

Representatives from the SEC and CFTC will testify in the May 22 hearing entitled “Implementing Derivatives Reform: Reducing Systemic Risk and Improving Market Oversight.”

While officials from the federal banking agencies, Treasury Department, and CFPB will testify on June 6.

Read more on the May 22 hearing.
Read Johnson’s press release.

SEC Names Deputy Director in the Division of Trading and Markets

noreply@blogger.com (ABA Regulatory Policy Staff 2) — Fri, 18 May 2012 12:10:00 +0000

The SEC announced that James R. Burns will become a Deputy Director in the Division of Trading and Markets.

Mr. Burns will oversee several of the Division’s core regulatory functions, including market oversight and operations, derivatives policy and trading practices, and chief counsel and enforcement liaison functions. He also will contribute to the Division’s ongoing implementation of key provisions of the Dodd-Frank Act.

Mr. Burns is expected to begin his new role in late May. He fills the Deputy Director position that was vacated by James Brigagliano when he left the agency for the private sector.

Read the SEC press release.

Senate Confirms Fed Board Nominees

noreply@blogger.com (ABA Regulatory Policy Staff 2) — Fri, 18 May 2012 12:09:00 +0000

The Senate yesterday confirmed the nominations of Jeremy Stein and Jerome Powell to the Federal Reserve Board, bringing the seven-member panel to full strength for the first time since April 2006. The chamber confirmed Stein, a Harvard economics professor, by a 70-24 vote, and Powell, a former private equity executive, by a 74-21 tally.

Stein will fill the term vacated by Kevin Warsh’s resignation, which will expire in 2018. Powell will fill the term vacated by Frederic Mishkin’s resignation, which will expire in 2014.

OCC's Curry Says Operational Risk Now OCC’s Top Concern

noreply@blogger.com (ABA Regulatory Policy Staff1) — Thu, 17 May 2012 15:35:00 +0000

Operational risk has eclipsed credit risk as national banks’ chief safety and soundness challenge, Comptroller of the Currency Thomas Curry told the Exchequer Club in Washington, D.C., yesterday.

Operational risk -- the risk of loss due to failures of people, processes, systems and external events -- is “high and increasing,” Curry said. He cited flawed risk models, lack of adequate controls over third-party vendors, and anti-money laundering efficiencies as some examples of operational risk.

“[A]s banks and thrifts face greater resource constraints and higher compliance costs, they may feel greater pressure to economize on systems and processes in order to enhance their income and operating economies … ,” Curry said. “All institutions … must resist the temptation to underinvest in the systems and controls they need to prevent greater risk and larger losses in the future.”

He emphasized that the risk of operational failure is embedded in every activity and product -- from a bank’s processing, accounting and information systems to the implementation of its credit risk management procedures.

“No issues loom larger today than operational risk in all its dimensions, the manner in which all risks interact, and the importance of managing those risks in an integrated fashion across the entire enterprise,” Curry said. “These themes are a supervisory priority for us at the OCC today and they should similarly command the attention of the industry.”

Read Curry’s speech.