The Consumer Financial Protection Bureau (CFPB) and Trump Administration remain at odds. This is particularly evident from the recent activity in an area at the intersection of the powers of the independent agency and an agency controlled by a Trump appointee—student loans. In the last two weeks Betsy DeVos, Department of Education Secretary, has issued memorandums rolling back Obama Administration protections for student loan borrowers, all while the CFPB continues its pursuit of one of the largest student loan servicers, Navient (formerly Sallie Mae). In the face of these mixed messages, student loan servicers have chosen to maintain the status quo. In a sector of the lending industry valued at 1.3 trillion dollars with 43 million borrowers, lenders do not appear interested in rolling back changes they only recently implemented as potential for litigation with the CFPB looms.
In a rare move, the Justice Department reversed course, filing an Amicus Brief in support of a ruling by a panel of the DC Circuit Court declaring the current structure of the Consumer Financial Protection Bureau (CFPB) to be unconstitutional. Although the CFPB is an independent agency which may represent itself in court, for this litigation, which began during the Obama administration, the CFPB was being supported by the Justice Department—a clear sign of the administration’s support. This unprecedented change of course is a sign of the current administration’s disdain for Richard Cordray and the agency itself. It may also be a message to Congress to enact measures to eliminate or at the least, minimize the impact of the CFPB.
With two releases, Trump made good on his promise to reform regulation of the financial industry. However, the nature of agencies regulating the sector requires that he receive an assist from Congress to effectuate real change. On February 3, the industry saw its first simultaneous act to dismantle the Dodd-Frank Act. President Trump issued an Executive Order on Core Principles for Regulating the United States Financial System and a Presidential Memorandum on the Fiduciary Rule. The Administration has indicated that at least one more order is forthcoming. On that same day, in a vote of 52 to 47, the Senate voted to repeal the Security and Exchange Commission’s (SEC) foreign payments rule requiring companies to state the taxes and other fees they pay to foreign governments that was included in the 2010 Dodd-Frank Act. Although the new law and executive orders are not related to the same Dodd-Frank initiatives, they indicate a desire by both branches of government to dismantle the impact of the Act.
During President Donald Trump’s campaign he promised to shake up business by streamlining the regulatory system. The financial sector, still adapting to the changes imposed by The Dodd–Frank Wall Street Reform and Consumer Protection Act (Pub.L. 111–203, H.R. 4173) (“Dodd-Frank”), has had mixed reactions to the possibility of yet another regulatory scheme. While many would welcome a less complicated regulatory scheme, most recognize that rapid changes can be more detrimental than the current structures. Thus, many have spent the first weeks of the Trump Administration monitoring Trump’s Executive actions. The good news for the financial sector is that many of the agencies are beyond the reach of the Executive Branch acting alone. Like the Dodd-Frank Act, future changes to financial regulations will take an act of Congress.
Compliance teams have a difficult job. Resources are tight but the amount of new regulations is constantly increasing, which places more and more demands on compliance team members. Even in previous periods of deregulation, the number of regulatory updates has tended to steadily increase. The restrictions on business may shrink during these times, but the burden on compliance teams continues to grow.
Jurispect has examined debt collection statistics across the 50 states to determine which states have the highest percentage of their population with debt in collections, the average amount of collections debt, and the states with the highest overall amount of collections debt. In Part 2, we will analyze how debt collection laws and regulations in the five states with the highest amounts of debt in collection have influenced the characteristics of debt collections in those states.
The Office of the Comptroller of the Currency (OCC) recently released its list of priorities for bank supervision, and put a heavy emphasis on regulatory change management. In addition to making sure that banks are following all existing regulations, the OCC will also seek to ensure that banks under its supervision have processes in place to handle regulatory changes as they happen.
The Department of Labor published a much-discussed conflict of interest (fiduciary) rule on April 8, 2016. This post covers the basics of the DOL’s new fiduciary duty rule and its key implications for RIA compliance.
The Consumer Financial Protection Bureau (CFPB) outlined new proposals regarding debt collection practices in July, including important limitations that will impact banks and other debt collectors. Financial institutions should proactively factor these proposals into their strategic planning around debt collections.
The U.S. Department of Defense (DoD) and the Consumer Financial Protection Bureau (CFPB), the DoD published a Final Rule amending the Military Lending Act (MLA) in July of 2015. These new rules went into effect on October 3, 2016 and include three key areas of note.