December 21

Happy Holidays
Sen. Warren Slams CFPB's Plan To Revisit Enforcement Actions

The Federal Reserve reported Monday (Dec. 18) that it would repeal Regulation C, a regulation pertaining to home mortgage disclosures, and is proposing to limit the reach of Regulation M, pertaining to consumer leasing.

According to U.S. Central Bank data reported by Reuters, the Fed will repeal Regulation C because the rules have been superseded by those set forth by the Consumer Financial Protect Bureau (CFPB). Regulation C requires all depository institution to disclose the communities in which they provide residential mortgages each year.

Meanwhile, the Fed is also proposing the limiting of Regulation M's reach, thanks to a rule put on the books by the CFPB in the past. The Fed wants to keep the part of the leasing rules that have to do with motor vehicle dealers intact, however.

The Fed's comments come as its new head, Jerome Powell, President Donald Trump's selection for Federal Reserve chairman, said at his confirmation hearing that he supports rolling back some bank regulations, but will protect the central bank's political independence. According to the Associated Press, Powell also strongly hinted the Fed would raise rates again in December.

Powell believes the Dodd-Frank Act, passed after the 2008 financial crisis, has succeeded in making the financial system stronger. He also believes that in some areas, such as regulation of smaller banks, the law has imposed unnecessary burdens that should be eased. While many GOP senators were happy to hear Powell's remarks, Democratic senators pressed him to say whether he would cut key consumer protections in the 2010 law. Read more at PYMNTS.COM
Dreher Tomkies LLP
With CFPB in limbo, states take the reins for consumer rights

As the legal fight over leadership of the Consumer Financial Protection Bureau lingers, the states are flexing their muscles and promising to fill the gap.

Last week, a group of 17 attorneys general wrote President Trump and vowed to "vigorously enforce state and federal laws to ensure fairness and deter fraud." The legal chiefs pledged to "redouble our efforts at the state level" if the president impedes the agency from carrying out its mission.

The AGs are on solid ground. In fact, they may have more power than they realize.

When Congress passed the Dodd Frank Act of 2010, the centerpiece of consumer protection was the Consumer Financial Protection Bureau (CFPB), a new agency that would serve as a federal watchdog and protect consumers from predatory practices. Tucked away in the act was an obscure provision that empowered state attorneys general to enforce federal laws protecting consumers in the financial marketplace. These laws include a new prohibition against any "unfair, deceptive, or abusive act or practice" in the offering of any financial product or service, and arguably a long list of consumer finance laws already on the books.

Although occupying no more than a paragraph in the voluminous Dodd Frank Act, this provision was ingenious. With only a few sentences, the drafters ensured that if the agency were ever compromised, another cop would always have authority to enforce the law. Absent permission, states cannot enforce federal law. But here Congress empowered the states to wield the federal sword. Read more at THE HILL
Trump Administration Argues Mulvaney Is Proper CFPB Chief

Mick Mulvaney is the properly appointed interim director of the CFPB, Justice Department attorneys argued Monday.

In documents filed in U.S. District Court for the District of Columbia, the attorneys asked U.S. District Judge Timothy Kelly to reject the argument of agency Deputy Director Leandra English that she should be running the agency.

Mulvaney, the director of the Office of Management and Budget, was President Trump's choice to run the CFPB after Director Richard Cordray resigned. Cordray had tried to install English as acting director before he resigned-citing a section of Dodd-Frank that says the deputy serves when the director is absent or unavailable.

English filed suit in an effort to block Mulvaney from taking control of the CFPB.

However, the Trump Administration has argued that under the Federal Vacancies Act, the president has the power to appoint an acting agency head as long as that person already has been confirmed by the Senate for another position.

Justice Department attorneys Monday accused Cordray of bureaucratic sleight-of-hand, saying that he ran the agency for two years without appointing an executive director. Then in the waning hours of his last day in office, he appointed English, his chief of staff as deputy director.
What The CFPB Leadership Dispute Means For The Prepaid Account Rule

With Office of Management and Budget Director Mick Mulvaney in place as Acting Director of the Consumer Financial Protection Bureau (CFPB) and a legal challenge to his appointment to that position brought by CFPB Deputy Director Leandra English continuing to proceed through the courts, prepaid industry participants are rightly asking what this ongoing leadership dispute means for the CFPB's sweeping Final Rule amending Regulation E and Regulation Z as applied to prepaid accounts.

After a four-year CFPB rulemaking process and a delay earlier this year of the Final Rule's original October 1, 2017 effective date, the legal battle over who will head the CFPB has created additional uncertainty within the prepaid industry regarding the fate of the Final Rule. Although many industry participants have already taken steps to comply with the Final Rule, others continue to express concerns about the time it will take to come into full compliance and are advocating that the CFPB delay for one year the April 1, 2018 effective date. Since taking the helm at the CFPB, Acting Director Mulvaney swiftly instituted a 30-day freeze on new regulations and hiring. Although it is unclear if the Final Rule will be subject to further delay, the temporary rulemaking freeze likely covers the CFPB's pending proposed changes to aspects of the Final Rule related to credit cards linked to digital wallets and to error resolution for unregistered accounts.
CFSA Conference
CFPB's Updated Timeframe for Debt Collection Rulemaking Unlikely as New CFPB Leadership Signals a Stall

Although the CFPB's recently released regulatory agenda predicts a February 2018 timeframe for a proposed debt collection rule, Acting Director Mick Mulvaney has made clear that the rulemaking is on hold as he builds a team to better understand it.

In a recently-released updated regulatory agenda, the CFPB predicts a debt collection proposed rule to be released as early as February 2018. Historically, however, the CFPB has been consistently inaccurate when it comes to estimating the time frame of the debt collection rulemaking.

Now, with new leadership at the bureau under Acting Director Mick Mulvaney, the CFPB will almost certainly fail in its prediction once again.

In response to a question about the status of the debt collection rulemaking during a press roundtable hosted by the CFPB on Dec. 4, Mulvaney said, "We put a hold on all new rules, new rulemaking and regulatory promulgation until I get a chance to look at them on a case-by-case basis ... So I think you can expect the rulemaking to stop for a while."

Although Mulvaney has brought over Brian Johnson, an aide of House Financial Services Committee Chairman Jeb Hensarling, R-Texas, to serve as a senior adviser, Mulvaney told reporters he is "going to need some more firepower from folks here to actually understand the details of the rules and the regs before I have an informed opinion on those."
Financial Wellness: 59% of Employees Say Stress of Finances Negatively Impacts Work Performance.  recommended by David Kilby at FinFit

The financial well-being of U.S. employees reversed direction this year following several years of steady improvement, according to a new survey by Willis Towers Watson, a global advisory, broking, and solutions company. The biennial survey also revealed a large increase in the number of employees who say their financial woes are negatively affecting their lives and who are worried about their future financial situation.

The 2017 Global Benefits Attitudes Survey found that barely one-third of U.S. workers (35%) were satisfied with their financial situation this year, a sharp decline from 48% just 2 years ago. The number of employees who were satisfied with their financial situation had been improving steadily since 2009 when just a quarter were satisfied.

The survey also found more than a third of U.S. workers (34%) now believe their current financial concerns are negatively affecting their lives, compared with just 21% 2 years ago. Additionally, nearly six in 10 employees (59%) worry about their future financial state. Two years ago, just under a half (49%) were worried about their future finances.

"The ongoing financial worries that are plaguing so many employees are taking a toll on their financial confidence," said Vincent Antonelli, senior consultant at Willis Towers Watson-in a press release. "We know from our research that more than half of all workers have experienced a major financial event in the past two years, such as divorce; a significant medical experience; or borrowing money from a friend, family member or payday loan. These factors, combined with growing debt and low wage growth, are leading to heightened worker angst." Read more at HR DAILY
A_S Management
Do consumers have more trust in banks? by Walt Wojciechowski

Totaling 23 million, according to the most recent figures available from the Federal Deposit Insurance Corporation, the nation's unbanked have a variety of reasons for why they're bankless - whether that is a recent or a long-standing status. For most of them, they don't use traditional banking services - such as a checking or savings account - because they don't have enough earnings to necessitate it.

For around 10 percent, though, they're unbanked because they don't trust these financial institutions - perhaps influenced by the financial crisis that sent the U.S. economy into a fiscal tailspin.

Now that reforms are in place - implemented in part by the formation of oversight organizations like the Consumer Financial Protection Bureau, created through the Dodd-Frank Wall Street Reform and Consumer Protection Act - have Americans become any more trusting of banks? New data appears to indicate as much. At the same time, though, the data clearly suggests there's plenty of room for banks to improve to more fully gain their trust and assurance.

Roughly 33 percent of respondents in a Gallup poll conducted in June, said they have confidence in the nation's major financial institutions. That's a rather sharp increase from 2016, when 27 percent had similar sentiment and 28 percent in 2015. Read more at microbilt
Battle Over Bank Watchdog Whiffs on the Law

Trump can pick a Consumer Financial Protection Bureau chief. He just can't pick Mick Mulvaney.

President Donald Trump says he has the legal right to put his budget director in charge of the agency that enforces consumer protection rules for banks. Democrats say that the outgoing director gets to make the choice.

The dispute has turned into a messy partisan fight that's now being waged in federal court. So we'll find out shortly whether the judges can figure out why both sides are wrong

Even if federal law turns out to favor Trump's claim that the president has the authority to pick a temporary director of the bank-regulation agency, the Consumer Financial Protection Bureau, it doesn't let him pick just anybody. It's Trump's particular choice of Mick Mulvaney, the White House budget director, that should hit a legal brick wall.

The bureau lost its director on Nov. 25 when the Obama-era chief, Richard Cordray, left to run for governor of Ohio. There's no dispute that Cordray's permanent successor is Trump's to choose. The question before the court is who can pick an interim director to run the agency before the Senate confirms a permanent White House nominee. Read more at BLOOMBERG
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