Mon, Feb 6, 2017
The Trump Administration has had a busy two weeks, with executive orders and other actions moving forward at a breakneck pace.
The key part of the Executive Order regarding Financial Sector Reform is to direct the Treasury secretary to meet with FSOC financial regulators (including NCUA), and then advise the President within 120 days what needs to be done with respect to the Dodd-Frank Act. Related to this, our agency sources have told us that the NCUA is now beginning the process of identifying options for specific regulatory changes to amend or repeal in response to this Executive Order.
Two early possibilities: the mandated stress test and RBC. With respect to RBC however, does it get stopped and studied, repealed and replaced or simply modified. All this remains to be seen and a new Board member (i.e., a second vote) will need to be nominated, Senate approved and in place before anything of note can be done on RBC. While there are lots of unknowns at this point, the Executive Order is a positive starting point.
Also last week, Sen. David Perdue (R-GA) introduced a resolution that would nullify the CFPB regulation on prepaid spending cards. A resolution is different than a bill in that it is used to express nonbinding positions of the Senate. It does not require action by the House of Representatives, and if passed does not change the law. However, this resolution is significant because it marks the Senate's first attempt to use the Congressional Review Act against CFPB.
It could be a barometer of the feelings in the Senate toward CFPB and its rulemakings. The prepaid card rule takes effect in October 2017. The public comments period, generated 65,000 comments and the rule took two years to finalize. It limits consumer liability on lost or stolen cards and standardizes fee disclosures to make consumer comparison shopping easier. A Senate Banking Committee staffer told us that they had expected the mandatory arbitration rule to be the first target, but Sen. Perdue had been persuaded by a pre-paid issuer to focus on this this rule now. The Senate resolution currently has 7 co-sponsors, none from Maryland.
In other regulatory news, the national retailer lobby is ratcheting up their efforts with Congressional offices to get House Financial Services Chairman Jeff Hensarling to remove his ‘Durbin Amendment’ (interchange fees) repeal language from his CHOICE Act (which is expected to be marked up in Committee this month prior to a Committee vote expected later in the spring). The CHOICE Act positively addresses regulatory reform in a number of areas and repeal of the Durbin Amendment language (from the Dodd Frank law) would be a major benefit to credit unions and one we continue to push on Capitol Hill.
Contact: Glen Cooney, 443-325-0775, firstname.lastname@example.org