Sen. Dodd rolled out his vision of consumer financial services regulatory reform this week and, among other things, it threatens to further consolidate oversight of banks into a single federal agency.
Maloney-Frank bill will implement credit card reforms immediately upon enactment
The Credit Card Act of 2009 was set to go into effect in February, 2010, but Congressman Frank and Congresswoman Maloney want it to go into effect December 1, 2009.
Continue Reading...The Federal Reserve announced last week that it would begin examining nonbank subsidiaries of bank holding companies for compliance with consumer protection laws. A September 14 letter from Sandra F. Braunstein, the agency's Director of Consumer and Community Affairs states:
This letter establishes, effective immediately, a policy for conducting risk-focused consumer compliance supervision of, and the investigation of consumer complaints against, nonbank subsidiaries of bank holding companies (BHCs) and foreign banking organizations (FBOs) with activities covered by the consumer protection laws and regulations the Federal Reserve has the authority to enforce. This policy is designed to enhance our understanding of the consumer compliance risk profile of nonbank subsidiaries and to guide our supervisory activities for these entities. It leverages existing consumer compliance supervision policies and procedures as well as the existing prudential supervision processes for Large Complex Banking Organizations (LCBOs), FBOs, Regional Banking Organizations (RBOs), and Community Banking Organizations (CBOs).
The consumer compliance and full-scope examinations of nonbank subsidiaries will result in ratings based on the "Consumer Compliance Risk Management rating system (Strong, Satisfactory, Fair, Marginal, or Unsatisfactory) that is included in the draft Risk-Focused Consumer Compliance Supervision Program," according to the letter.
The Feds announced this move a day after President Obama publicly reiterated his support for a new consumer protection enforcement agency.
Rep. Barney Frank, the sponsor of H.R. 3126, has sent a memo to House Democrats outlining his proposals for amendments to the proposed Consumer Financial Protection Agency Act.
Continue Reading...In a highly anticipated decision, a divided U.S. Supreme Court authorized states to investigate national banks for lending discrimination, thus rejecting the OCC's position that its regulatory authority preempted states' enforcement powers. In the 5-4 opinion authored by Justice Scalia, the high court in Cuomo v. Clearing House Association, LLC held that federal banking regulations did not pre-empt states from enforcing their own fair-lending laws.
The ruling decided a dispute between the OCC and the
CNN reported the mixed reactions to the ruling. The American Bankers Association issued a statement contending that the ruling "changes over 140 years of settled law," and expressed concern that national banks will "face a patchwork of duplicative and conflicting federal and state regulation and enforcement actions." On the other hand, current New York Attorney General Cuomo said the ruling "reaffirms the vital role state attorneys general play in protecting consumers from illegal and improper practices by our country's biggest and most powerful banks." Similarly, the Lawyers' Committee for Civil Rights Under Law applauded the decision, stating in a press release that the the decision "will unshackle the oversight muscle of state attorneys general whose attempts to enforce fair lending laws against national banks were thwarted when most needed."
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