OCC Consolidates Supervision Support Functions, Announces New Units

The Office of the Comptroller of the Currency today announced realignment of approximately 150 staff members to create two new units, consolidating bank supervision support, risk analysis, and oversight of national trust banks and significant service p…

The Office of the Comptroller of the Currency today announced realignment of approximately 150 staff members to create two new units, consolidating bank supervision support, risk analysis, and oversight of national trust banks and significant service providers.

Read more / Original news source: https://www.occ.gov/news-issuances/news-releases/2019/nr-occ-2019-84.html

OCC Consolidates Supervision Support Functions, Announces New Units

The Office of the Comptroller of the Currency today announced realignment of approximately 150 staff members to create two new units, consolidating bank supervision support, risk analysis, and oversight of national trust banks and significant service p…

The Office of the Comptroller of the Currency today announced realignment of approximately 150 staff members to create two new units, consolidating bank supervision support, risk analysis, and oversight of national trust banks and significant service providers.

Read more / Original news source: https://www.occ.gov/news-issuances/news-releases/2019/nr-occ-2019-84.html?utm_source=RSS_feed&utm_medium=RSS

IRI urges Massachusetts to delay implementation of state fiduciary rule

The Insured Retirement Institute (IRI) is urging the Massachusetts Securities Division to delay action on a proposed state regulation governing professional financial advice to consumers.© Shutterstock The Massachusetts Securities Division is seeking comment on a regulation to apply a fiduciary conduct standard on broker-dealers, agents, investment advisers, and investment adviser representatives when dealing with customers […]

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The Insured Retirement Institute (IRI) is urging the Massachusetts Securities Division to delay action on a proposed state regulation governing professional financial advice to consumers.

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The Massachusetts Securities Division is seeking comment on a regulation to apply a fiduciary conduct standard on broker-dealers, agents, investment advisers, and investment adviser representatives when dealing with customers and clients. The standard requires that recommendations and advice be made in the best interest of customers and clients without regard to the interests of the broker-dealer or advisory firm. It allows for the payment of transaction-based remuneration.

It is similar to the U.S. Department of Labor’s Fiduciary Rule, which was overturned and replaced with the SEC Regulation Best Interest. State officials say the SEC’s Regulation Best Interest fails to define the key term “best interest,” and sets ambiguous requirements for how conflicts in the securities industry must be addressed under the new rule. They say it also fails to indicate whether some of the most problematic practices in the securities industry would be prohibited under the new rule.

“In many instances, it appears that the mitigation of conflicts required under the SEC Regulation Best Interest can be accomplished through disclosure, including disclosure via the new Customer Relationship Summary,” MSD officials state. “This approach contradicts years of data gathered by studies and reports on disclosure and the conduct standards applicable to broker-dealers.”

IRI, which represents the retirement income industry, said the state should wait to see if the new Regulation Best Interest rule leaves any gaps in investor protections. IRI asserts that Regulation Best Interest will address the state’s concerns. Further, IRI called the Massachusetts proposal inconsistent and incompatible with the SEC rules. Further, the group called the proposal “misguided,” adding that it could make it more difficult for some financial services firms to do business in the state.

“For the Division to create a separate regulatory structure that destroys the distinction between brokerage and advisory services is, at its best, misguided, and at worst, contrary to and incompatible with the Final SEC Rules,” Jason Berkowitz, IRI chief legal and regulatory affairs officer, wrote in a comment letter to the Mass Securities Division. “By rejecting the SEC’s approach, the Division threatens to create a regulatory labyrinth for broker dealers (BDs) offering services in Massachusetts. BDs will not only have to comply with the Final SEC Rules but also the Division’s more expansive and inconsistent rules.”

Berkowitz added that there are several vague and confusing elements to the rule.

“The proposed rule includes a number of open-ended, ill-defined and unworkable provisions would make it nearly impossible for broker-dealers to know with any degree of certainty that they are complying with the rule,” Berkowitz said. He added that the proposal’s duty of loyalty provision creates an “impossible” standard” for broker dealers and should be revised. Also, he called the duty of loyalty provision “among the most problematic and unworkable aspects of the proposal.”

IRI also warned that the Massachusetts rule could be pre-empted because it is in direct conflict with the SEC’s regulation best interest.

“The Proposal would undermine the SEC’s attempt to create a federal standard for broker-dealers to follow when making personalized investment recommendations to retail customers,” Berkowitz said. “Allowing each state to promulgate separate and potentially inconsistent standards for broker-dealers would create a patchwork regulatory structure that would be detrimental to investors and to the industry.”

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Read more / Original news source: https://financialregnews.com/iri-urges-massachusetts-to-delay-implementation-of-state-fiduciary-rule/

Bill addresses FHA mortgage foreclosure

Rep. Maxine Waters (D-CA) has introduced the Federal Housing Administration (FHA) Foreclosure Prevention Act of 2019, requiring the Department of Housing and Urban Development to address FHA mortgage foreclosure actions.© Shutterstock “The Federal Housing Administration is critical to our housing market and helps to promote homeownership for underserved borrowers, including first-time and minority homebuyers,” Waters, […]

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Rep. Maxine Waters (D-CA) has introduced the Federal Housing Administration (FHA) Foreclosure Prevention Act of 2019, requiring the Department of Housing and Urban Development to address FHA mortgage foreclosure actions.

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“The Federal Housing Administration is critical to our housing market and helps to promote homeownership for underserved borrowers, including first-time and minority homebuyers,” Waters, chairwoman of the House Committee on Financial Services, said. “Unfortunately, we continue to see significant problems with the servicing of FHA loans that unnecessarily put homeowners at risk of foreclosure. The FHA Foreclosure Prevention Act of 2019 would ensure that FHA servicers help families experiencing financial hardship avoid foreclosure so that they can remain in their homes.”

Sen. Catherine Cortez Masto (D-NV) introduced companion legislation in the U.S. Senate this week.

“As Nevada’s Attorney General during the housing crisis, I held the big banks and mortgage companies accountable for trying to take away the homes of hardworking families in the Silver State,” Cortez Masto said. “Lenders must follow the law before foreclosing on borrowers, and that includes communicating transparently and doing everything possible to avoid eviction. Yet loan servicers and mortgage companies are still not following the law when it comes to helping homeowners, which is why my legislation is so important. This bill ensures lenders put consumers first and take every step possible to keep struggling homeowners in Nevada and across the country in their homes.”

Both measures are supported by the National Housing Law Project (NHLP) and the National Consumer Law Center (NCLC) on behalf of its low-income clients.

The FHA Foreclosure Prevention Act of 2019 (H.R. 3958) would require the Department of Housing and Urban Development to increase its oversight of FHA mortgage lenders to strengthen compliance with the FHA’s loss mitigation requirements. This bill would also establish a robust complaint and appeals process to provide borrowers the ability to voice their concerns about unfair treatment adequately. Ultimately, this bill seeks to ensure that FHA borrowers have a fair opportunity to become current after defaulting on their loan.

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Read more / Original news source: https://financialregnews.com/bill-addresses-fha-mortgage-foreclosure/

CFPB seeking feedback on “GSE patch” rule

The Consumer Financial Protection Bureau (CFPB) is seeking feedback on a proposed rule related to the “GSE patch.”© Shutterstock Specifically, the rule is related to the expiration of the temporary qualified mortgage provision applicable to certain mortgage loans eligible for purchase or guarantee by the Government Sponsored Enterprises (GSEs) in the CFPB’s Ability to Repay/Qualified […]

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The Consumer Financial Protection Bureau (CFPB) is seeking feedback on a proposed rule related to the “GSE patch.”

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Specifically, the rule is related to the expiration of the temporary qualified mortgage provision applicable to certain mortgage loans eligible for purchase or guarantee by the Government Sponsored Enterprises (GSEs) in the CFPB’s Ability to Repay/Qualified Mortgage (ATR/QM) Rule. This provision is also known as the GSE patch. It is scheduled to expire on Jan. 10, 2021.

The CFPB plans to let the GSE patch expire in January 2021, as scheduled, or after a short extension, if necessary, to facilitate a smooth transition away from the GSE Patch.

“Loans backed by Fannie Mae and Freddie Mac make up a large portion of the U.S. mortgage market,” CFPB Director Kathleen Kraninger said. “The national mortgage market readjusting away from the Patch can facilitate a more transparent, level playing field that ultimately benefits consumers through stronger consumer protection. We want to hear all perspectives on how to move beyond the GSE Patch, the impact on credit, the role of the private mortgage market, and possible modifications to the definition of qualified mortgages and the rules governing the documentation of debt and income. The Bureau is committed to ensuring a smooth and orderly mortgage market throughout its consideration of these issues and any resulting transition away from the GSE Patch.”

The CFPB is seeking comments on possible amendments to the ATR/QM Rule, including whether to revise Regulation Z’s definition of a qualified mortgage in light of the GSE Patch’s scheduled expiration. They also seek comment on whether the definition of qualified mortgage should retain a direct measure of a consumer’s personal finances and whether the definition should include an alternative method for assessing financial capacity.

The GSE Patch, adopted in the Ability to Repay/Qualified Mortgage Rule, expanded the definition of qualified mortgage to include certain mortgage loans eligible for purchase or guarantee by the GSEs. Earlier this year, the CFPB assessed the Ability to Repay/Qualified Mortgage Rule and found that GSE QM loans represent a “large and persistent” share of originations in the conforming mortgage market and that creditors generally offered a Temporary GSE QM loan even when a General QM loan could be originated.

Rep. Patrick McHenry (R-NC), minority leader of the House Financial Services Committee, supports the decision to end the Qualified Mortgage (QM) patch for GSEs.

“As I’ve said many times, we need to explore all paths that lead to responsibly ending the government sponsorship of Fannie Mae and Freddie Mac. The CFPB’s decision to end the QM patch for GSEs is a step toward ensuring taxpayers are protected. I look forward to working with this Administration to find a long-term solution that ensures access to affordable housing for all Americans,” McHenry said.

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Read more / Original news source: https://financialregnews.com/cfpb-seeking-feedback-on-gse-patch-rule/

Fintech state regulation proficiency examined

Conference of State Bank Supervisors (CSBS) personnel maintain state financial regulators possess the expertise, data, and real-time insight into how companies are interacting with consumers and functioning in the marketplace.© Shutterstock During a recent task force session Washington Department of Financial Institutions Director Charlie Clark, representing the CSBS on a regulators panel, addressed fintech regulation […]

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Conference of State Bank Supervisors (CSBS) personnel maintain state financial regulators possess the expertise, data, and real-time insight into how companies are interacting with consumers and functioning in the marketplace.

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During a recent task force session Washington Department of Financial Institutions Director Charlie Clark, representing the CSBS on a regulators panel, addressed fintech regulation before the House Committee on Financial Services’ Task Force on Financial Technology.

Clark, who also chairs the CSBS Non-Depository Supervisory Committee, said the current intersection between financial services and technology has accelerated change in the industry and for the state system.

“With industry participation, we are leveraging technology and data to create a more networked system of state regulation that functions more efficiently, with stronger consumer protections,” he said.

Clark noted that in licensing and supervising fintechs, state regulators focus on a firm’s business activities, such as lending or money transmission, and not its technology. Under the Nationwide Multistate Licensing System, state regulators are tracking in real-time the migration of the mortgage and MSB industries from a physical to online presence. Additionally, CSBS and state regulators are implementing Vision 2020, a set of initiatives designed to harmonize multistate licensing and supervision of nonbanks. Through broad use of technology and data, Clark said, state regulators can spot trends early and prioritize resources to address risks.

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Read more / Original news source: https://financialregnews.com/fintech-state-regulation-proficiency-examined/

Community bankers call on Fed to develop payment settlement system

The Independent Community Bankers of America (ICBA) is calling on the Federal Reserve to develop a real-time payments settlement system to avoid a megabank monopoly. © Shutterstock The Federal Reserve is uniquely positioned to provide equitable access to real-time payments, ICBA President and CEO Rebeca Romero Rainey wrote in a letter addressed to Fed Chair […]

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The Independent Community Bankers of America (ICBA) is calling on the Federal Reserve to develop a real-time payments settlement system to avoid a megabank monopoly.

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The Federal Reserve is uniquely positioned to provide equitable access to real-time payments, ICBA President and CEO Rebeca Romero Rainey wrote in a letter addressed to Fed Chair Jerome Powell. This will encourage innovation that will benefit customers, she added.

“Industry-wide ubiquity may never be achieved without the Federal Reserve developing and operating a real-time gross settlement system and interoperating with the private sector,” Romero Rainey wrote. “The Federal Reserve’s development and operation of a real-time gross settlement system would also insert needed competition into real-time payments.”

Having a Fed-run system for real-time payments would avoid the risk of having only one, for-profit settlement service run by the nation’s largest banks. This would prevent a monopoly and give community banks a choice of settlement providers. In turn, it would extend access to payments technology to local communities.

The nation’s community banks have long advocated for a Fed alternative, as have leading consumer groups, technology leaders, and retailers. ICBA will continue working with policymakers to support a real-time payments settlement system at the Federal Reserve. The letter also went to other members of the Federal Reserve Board as well as members of Congress.

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Read more / Original news source: https://financialregnews.com/community-bankers-call-on-fed-to-develop-payment-settlement-system/

ABA encourages cannabis banking reform

During recent testimony before the Senate Banking Committee, the American Bankers Association (ABA) encouraged the Senate to advance legislation providing cannabis-related businesses access to the regulated banking system.© Shutterstock “Because cannabis continues to be illegal at the federal level, handling funds associated with cannabis businesses can be deemed money laundering,” Joanne Sherwood, president and CEO […]

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During recent testimony before the Senate Banking Committee, the American Bankers Association (ABA) encouraged the Senate to advance legislation providing cannabis-related businesses access to the regulated banking system.

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“Because cannabis continues to be illegal at the federal level, handling funds associated with cannabis businesses can be deemed money laundering,” Joanne Sherwood, president and CEO of Citywide Banks in Denver, Colo., and chair of the Colorado Bankers Association, said while testifying on behalf of ABA. “That federal / state divide has particularly severe repercussions for banks and communities like mine, where the cannabis industry is fully operational, but it also impacts banks in every state.”

Sherwood maintains with limited access to banking services available, large amounts of cash remain on-site in many of the cannabis-related businesses, creating significant safety concerns for the communities where they are located.

“Providing a mechanism for the cannabis industry to access the regulated banking system would help those businesses and their surrounding communities by reducing the high volume of cash on hand, reducing instances of cash-motivated crime,” Sherwood said.

The SAFE Banking Act is currently before the Senate Banking Committee for consideration, with proponents maintaining it would specify proceeds from a state-licensed cannabis business would not be considered unlawful under federal money laundering statutes or any other federal law.

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Read more / Original news source: https://financialregnews.com/aba-encourages-cannabis-banking-reform/