NEWS: December 26

For Trump's man at CFPB, emphasis is on ditching rules, not enforcing them

If you've been wondering how the Consumer Financial Protection Bureau will change now that President Trump has installed as interim director a man who has called the agency a "sick, sad joke," wonder no more.

Mick Mulvaney, who also continues to serve as White House budget director, said a few weeks ago he'd halt CFPB business for 30 days while getting his bearings.

But that hasn't stopped him from quietly making a change to the wording that appears at the bottom of bureau press releases and announcements - a change that reveals the scope of the decidedly more business-friendly agency Mulvaney envisions.

First, here's what used to appear on all CFPB press releases, before Mulvaney showed up:

"The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives."

Note the emphasis on enforcing rules and empowering consumers. Is it any wonder the banking industry has been at war with the bureau since its establishment in 2011?

Here's what you'll now find:

"The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by regularly identifying and addressing outdated, unnecessary or unduly burdensome regulations, by making rules more effective, by consistently enforcing federal consumer financial law and by empowering consumers to take more control over their economic lives."
Dreher Tomkies LLP
The CFPB Will Delay Implementation Of New Prepaid Card Rule

The CFPB has released its updated regulatory agenda for 2018 - and it looks like the prepaid card final rule passed earlier this year will not be on it.

The consumer watchdog - now under new leadership - formally announced that it will be delaying implementation of a 2016 regulation governing prepaid accounts, on the grounds that it needs more time to study the rule before it can be implemented.

The announcement isn't a total surprise, as interim director Mick Mulvaney made it clear earlier this month that his intention is to slow down rulemaking at the federal regulator's rulemaking apparatus.

"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," Mulvaney noted in a December 4 meeting.

The CFPB further noted that comments it received regarding the rule indicated a need to delay its implementation - and that the time would be used to revise the rule.

"The Bureau proposed making changes to the prepaid rule in June; the comment period on the proposal ended in August, and the record is now closed for public input," it said. "As part of that process, the Bureau expects, based on its review of the comments received, to further extend the effective date of the 2016 rule to allow additional time for implementation of the final rule," the CFPB announced.

CFPB officials say they will be able to issue a finalized version of the new rule "after the new year" though when exactly that might occur remains a bit up in the air. The regulator - long a thorn in the side of republican lawmakers - has recently come under the control of the Trump administration with Mulvaney, following the departure of Richard Cordray. Read at PYMNTS.COM
Mick Mulvaney tells CFPB staff he's bringing 6 Trump loyalists  on-board

Mick Mulvaney, whose ability to direct the Consumer Financial Protection Bureau is still an open legal question, told the agency Thursday afternoon that he plans to bring in six loyalists from the Trump administration, according to agency sources, as well as a review of a memo Mulvaney circulated.

The new staff will include John Czwartacki, who does public relations for the Office of Management and Budget, which Mulvaney also leads. Czwartacki will now do the same job at the CFPB, which, by statute, is supposed to be an independent agency that was created in the aftermath of the 2007-08 financial crisis.

Emma Doyle, Mulvaney's chief of staff, will also be on detail to the CFPB, as will James Galkowski, a special assistant to Mulvaney at the agency. (Mulvaney helpfully noted to the staff that he is "known by his last name, 'Galkowski.'")

Eric Blankenstein, a lawyer coming from the Office of the United States Trade Representative, is also part of the new team, as is Brian Johnson, a staffer at the House Financial Services Committee, chaired by hard-line CFPB opponent Rep. Jeb Hensarling, R-Texas.

Sheila Greenwood, an official at Ben Carson's Department of Housing and Urban Development, has also been detailed to the CFPB, Mulvaney told the staff. Read more at THE INTERCEPT
CFSA Conference
A_S Management
Scott Tucker, recently convicted payday loan businessman, faces new criminal charges

Leawood businessman Scott Tucker, already convicted of criminal charges of running an illegal payday loan business, faces a new indictment for not reporting millions in income.

Tucker, 55, was charged with one count of filing a false tax return, U.S. Attorney Tom Beall in Kansas announced Wednesday. He also faces a conspiracy charge along with his accountant.

W. Brett Chapin, 46, of Shawnee, prepared Tucker's tax returns for 2008 through 2011, Beall's announcement said. He faces charges of aiding and abetting the filing of a false tax return and the conspiracy charge.

According to an indictment unsealed Wednesday, Tucker signed a 2008 tax return prepared by Chapin that failed to report $42.5 million in income from payday lending businesses Tucker owned. A tax return from 2011 did not report $75 million in income, according to the grand jury indictment. Read more at THE KANSAS CITY STAR
Advance Financial
Advance Financial's Cief Experience Officer Tina Hodges sent a welcome email on 
Friday to employees in all 84 of the company's locations in Tennessee.
The email announced that due to President Trump's successful passage of tax reforms and cuts, the company will be sharing the considerable corporate tax savings with its employees in the form of increased 401(k) contributions, profit sharing, and for their local communities, increases in donations to their charity, the Advance Financial Foundation.
We've decided on three specific ways to pass along the tax savings to our team 
and the communities we serve.
(1) We will increase our 401k match from 3% to 5% for all employees.
(2) We will increase the profit share potential for front-line retail employees from 3% to 5%.
(3) We will increase our Advance Financial Foundation giving by 8%."

"The net effect will be an additional $500,000 to employees in 2018 and over $550,000 in total giving to our communities."        Read more at THE TENNESSEE STAR
CFPB Will Not Assess Penalties for 2018 HMDA Data Submissions

In a major win for the industry, the Consumer Financial Protection Bureau announced today that it will not assess penalties with respect to errors in Home Mortgage Disclosure Act data collected in 2018 and reported in 2019, and will not require banks to resubmit data for that period unless errors are found to be material. Banks must begin submitting HMDA data collected in 2017 and beyond using the CFPB's new online platform on Jan. 1.

"The bureau recognizes the significant systems and operational challenges needed to meet the impending requirements under the rule," the CFPB said, noting that its decision to not assess penalties on 2018 data will "provide financial institutions an opportunity to focus on identifying any gaps in their implementation of the additional requirements and making improvements in their HMDA compliance management systems for future years." CFPB added that it "expects that any supervisory examinations of 2018 HMDA data will be diagnostic, to help institutions identify compliance weaknesses, and will credit good-faith compliance efforts."

The bureau also announced that it is opening a rulemaking to consider various aspects of the 2015 HMDA Rule, including the institutional and transactional coverage tests and the rule's discretionary data points. ABA has long called on the CFPB to make modifications to the HMDA rules, and welcomed today's announcement by the bureau. The OCC and the FDIC also made similar statements regarding their treatment of HMDA data. For more information, contact ABA's Rod Alba. Read more at ABA BANKING JOURNAL
Too Many Americans Suffer from Financial Instability. Their Employers Can Help Fix It. recommended by David Kilby at FinFit

If it was ever true that "a rising tide lifts all boats" in an economic sense, it is clearly not true in modern America. Since 1980 half of Americans have been stuck in place-their wages in real terms haven't budged-while the top 20% have seen large gains.

Rising inequality of income and of wealth undermines much of the narrative about opportunity in America-that it's a country where anyone can pull themselves up by their bootstraps. In fact, today the U.S. has a lower rate of intergenerational economic mobility than France, Germany, or even Sweden.

Another form of economic inequality has been rising as well. Though it's garnered less attention, it undermines not just families' dreams for their children but hopes for their own lifetimes. It's the gap between people with financial stability and those without it.

Our research has found that even those with long-term, "steady" jobs cannot count on financial stability because of the volatility and unpredictability of their incomes and expenses. The major source of income volatility we found was due not to job changes, but to changing income from the same job. In other words, our households had steady jobs without steady pay.

Taken together, these two forms of inequality mean that some households have incomes that are the worst combination of stagnant (over decades) and volatile (on an annual and even a monthly basis). Read more at HARVARD BUSINESS REVIEW
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