The average 401(k) plan offers a variety of investment options

The average large 401(k) plan offered 27 investment options — including a mix of equity funds, bond funds, and target date funds, according to a recent study by BrightScope and the Investment Company Institute (ICI). © Shutterstock “Employers recognize the importance of being able to customize the design of their 401(k) plans to suit their […]

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The average large 401(k) plan offered 27 investment options — including a mix of equity funds, bond funds, and target date funds, according to a recent study by BrightScope and the Investment Company Institute (ICI).

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“Employers recognize the importance of being able to customize the design of their 401(k) plans to suit their workforces, which is one of the strengths of the 401(k) system,” Sarah Holden, ICI’s senior director of retirement and investor research, said. “Employers use the flexibility of the 401(k) system—including a wide variety of investment options and the structure of employer contributions—to build plans that encourage employee participation and make it easier for participants to plan and save.”

It also found that plan fees continue to decline.

“The 401(k) marketplace is constantly evolving, and with that, the overall costs of 401(k) plans for participants have declined,” Brooks Herman, vice president of data and research at BrightScope, said. “There are a variety of factors contributing to the decrease of fees and expenses in plans, including increased competition and the growing size of the 401(k) marketplace, as well as public disclosure of plan costs. All of these factors benefit participants and help them continue to grow their retirement nest eggs.”

The study also revealed that 85 percent of large 401(k) plans offered employer contributions. Employer contributions most commonly are structured as a simple matching contribution. Additionally, nearly 60 percent of larger 401(k) plans automatically enrolled their participants.

Finally, all large 401(k) plans included domestic equity funds, international equity funds, and domestic bond funds. Also, 80 percent of large 401(k) plans offered target-date funds while 69 percent offered guaranteed investment contracts (GICs) and 65 percent offered other types of balanced funds. In addition, 44 percent offered money funds, and 30 percent offered international bond funds.

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Insurance association commends Senate for holding hearing on terrorism insurance

The leadership of the American Property Casualty Insurance Association (APCIA) recently commended the Senate Banking Committee for holding today’s hearing on the reauthorization of the Terrorism Risk Insurance Program.© Shutterstock The Terrorism Risk Insurance Program was reauthorized in 2015 by President Barack Obama and was extended through Dec. 31, 2020. It was initiated on the […]

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The leadership of the American Property Casualty Insurance Association (APCIA) recently commended the Senate Banking Committee for holding today’s hearing on the reauthorization of the Terrorism Risk Insurance Program.

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The Terrorism Risk Insurance Program was reauthorized in 2015 by President Barack Obama and was extended through Dec. 31, 2020. It was initiated on the idea that sustaining a viable private market for terrorism insurance depends on a federal backstop.

“APCIA commends Chairman Crapo and members of the Senate Banking Committee for holding today’s hearing. APCIA strongly supports reauthorization of the current TRIA program as quickly as possible, for as long a duration as possible, and without changes to the current thresholds,” Nat Wienecke, senior vice president of federal government relations at APCIA, said.

Wienecke said that although the program does not expire until the end of 2020, it is imperative that TRIA is reauthorized this year.

“This fall, insurers will begin to negotiate new policies with durations running past TRIA’s expiration and have provisions ending terrorism coverage should TRIA lapse. Reauthorizing TRIA as soon as possible also will avoid disruptions and confusion in the marketplace for both insurers and their consumers,” Wienecke said. “APCIA will continue to work with Congress on a long-term reauthorization of TRIA.”

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SIFMA offers dissenting view of NJ fiduciary rule

The Securities Industry and Financial Markets Association (SIFMA) is offering a dissenting opinion regarding New Jersey’s proposed rule to create a state fiduciary standard.© Shutterstock “To best protect investors and avoid investor confusion, the optimal approach is to defer to the uniform, nationwide, heightened, best interest standard for broker-dealers which is embodied in the SEC’s […]

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The Securities Industry and Financial Markets Association (SIFMA) is offering a dissenting opinion regarding New Jersey’s proposed rule to create a state fiduciary standard.

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“To best protect investors and avoid investor confusion, the optimal approach is to defer to the uniform, nationwide, heightened, best interest standard for broker-dealers which is embodied in the SEC’s now final Reg BI,” SIFMA officials wrote in their letter to the New Jersey Bureau of Securities. “A state-by-state approach, on the other hand, would result in an uneven patchwork of laws that would be duplicative of, different than, and possibly in conflict with federal standards. It would also heighten investor confusion. We urge the Bureau to pause its rulemaking process, review Reg BI and reevaluate its proposal before deciding whether it is necessary to proceed with an additional state regulation.”

The correspondence also addressed potential broader negative consequences for the state in the wake of its industry footprint.

“The finance and insurance industry has roughly 200,000 employees in the state of New Jersey and accounts for almost 5 percent of all employment in the state,” the letter stated. “Every dollar spent in the securities industry in New Jersey generates an additional $1.22 for the state economy and every job in the securities industry generates an additional 1.34 jobs statewide.”

It is the SIFMA’s position the plan would represent a fundamental change in the way the securities sector operates in the state and would fundamentally alter its relationship with millions of New Jersey investors.

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Measure seeks to expand credit access

A bipartisan group of senators recently introduced a bill designed to expand credit access opportunities for Americans.© Shutterstock Sens. Angus King (I-Maine), Joe Manchin (D-WV), Tim Scott (R-SC), Doug Jones (D-AL), Mike Rounds (R-SD), Jon Tester (D-MT) and Tom Cotton (R-AR) said the Credit Access and Inclusion Act of 2019 addresses circumstances in which Americans […]

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A bipartisan group of senators recently introduced a bill designed to expand credit access opportunities for Americans.

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Sens. Angus King (I-Maine), Joe Manchin (D-WV), Tim Scott (R-SC), Doug Jones (D-AL), Mike Rounds (R-SD), Jon Tester (D-MT) and Tom Cotton (R-AR) said the Credit Access and Inclusion Act of 2019 addresses circumstances in which Americans
do not have a history of traditional loan payments, such as student loans, mortgages, and car loans.

“Oftentimes, Americans who struggle with access to credit are able to pay their bills – but the recurring bills they pay are not included in the credit rating process,” King said. “Maine people who pay their phone and utility bills on time every month should be able to point to these bills as an example of credit because these are the major expenses they incur every month. This bill is about giving people the chance to establish themselves and open up new avenues to success – it doesn’t get more common sense than that.”

In April, King wrote a letter challenging the IRS to refocus its limited resources away from disproportionately auditing lower-income households who utilize the Earned Income Tax Credit (EITC) and co-sponsored the Working Families Tax Relief Act, which expands the EITC and Childcare Tax Credit (CTC).

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House advances IRS reform bill

The U.S. House of Representatives advanced last week the Taxpayer First Act, which proposes several changes to the Internal Revenue Service.© Shutterstock The bill would establish an independent office of appeals within the IRS and require the IRS to redesign the structure of the agency to improve efficiency, modernize technology systems, enhance cybersecurity, and better […]

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The U.S. House of Representatives advanced last week the Taxpayer First Act, which proposes several changes to the Internal Revenue Service.

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The bill would establish an independent office of appeals within the IRS and require the IRS to redesign the structure of the agency to improve efficiency, modernize technology systems, enhance cybersecurity, and better meet taxpayer needs.

The bill was introduced by Senate Finance Committee Chairman Chuck Grassley (R-IA) and Ranking Member Ron Wyden (D-OR).

“This bipartisan, bicameral bill represents years of hard work and consensus building. It’s a big first step toward strengthening taxpayer protections and turning the IRS into the customer service organization it ought to be,” Grassley said. “I look forward to President Trump signing it into law so the IRS can begin implementing long-overdue reforms that will put taxpayers first.”

The legislation also includes several provisions to protect taxpayers from tax ID theft and improve taxpayer interaction with the IRS should they become a victim of this crime. It expands to all taxpayers an IRS program that currently only allows victims of tax ID theft to obtain a personalized PIN that better secures their identity. Further, it improves the IRS whistleblower program by authorizing the IRS to communicate with whistleblowers during the processing of their claims, while also protecting taxpayer privacy and extending anti-retaliation provisions to IRS whistleblowers. It also modifies the private debt collection program to ensure lower-income Americans are not targeted.

The bill already advanced through the Senate and now goes to President Donald Trump to be signed into law.

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Senators urge CFPB not to reduce reporting requirements for HMDA

A coalition of U.S. senators recently demanded that the Consumer Financial Protection Bureau (CFPB) rescind its proposal to reduce reporting requirements under the Home Mortgage Disclosure Act (HMDA). © Shutterstock HMDA requires financial institutions to report and publicly disclose mortgage data, which is used by Federal regulators, local governments, and advocates to ensure that all […]

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A coalition of U.S. senators recently demanded that the Consumer Financial Protection Bureau (CFPB) rescind its proposal to reduce reporting requirements under the Home Mortgage Disclosure Act (HMDA).

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HMDA requires financial institutions to report and publicly disclose mortgage data, which is used by Federal regulators, local governments, and advocates to ensure that all markets have access to mortgage credit and monitor compliance with fair lending laws. However, a proposal to further reduce HMDA data collection would undermine fair lending enforcement and monitoring at the national, local, and institutional level, the senators stated.

“HMDA regulations finalized in October 2015 exempted 22 percent of depositories that were required to report HMDA data prior to the 2015 rulemaking, which resulted in the loss of significant data in certain census tracts,” the senators wrote to CFPB Director Kathy Kraninger. “The latest proposal would reduce data collection beyond these already reduced levels. This would have a disproportionate impact on communities served by smaller lenders, including rural areas.”

The letter was signed by Sen. Sherrod Brown (D-OH), Robert Menendez (D-NJ), Elizabeth Warren (D-MA), Chris Van Hollen (D-MD), Catherine Cortez Masto (D-NV), Tina Smith (D-MN), Tammy Duckworth (D-IL), Kamala Harris (D-CA), Ed Markey (D-MA), Richard Blumenthal (D-CT), Tammy Baldwin (D-WI), Amy Klobuchar (D-MN), Cory Booker (D-NJ), Dick Durbin (D-IL), Ron Wyden (D-OR), Kirsten Gillibrand (D-NY), Patty Murray (D-WA), Mazie Hirono (D-HI), and Brian Schatz (D-HI).

“We are extremely concerned that the Consumer Financial Protection Bureau has once again put the interests the financial industry above those of the consumers it is charged to protect. We urge you to immediately rescind all proposed changes in reporting thresholds for closed-end and open-end mortgage loans,” the senators added.

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Senators applaud CFTC for addressing climate-related financial risks

Members of the Senate Banking Committee commended the Commodity Futures Trading Commission (CFTC) for holding a public meeting on climate-related financial risks.© Shutterstock “Climate change impacts are likely to exacerbate market volatility, erode investor confidence, and increase the risk of financial crashes,” the senators wrote in their letter to CFTC Commissioner Rostin Behnam. “We strongly […]

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Members of the Senate Banking Committee commended the Commodity Futures Trading Commission (CFTC) for holding a public meeting on climate-related financial risks.

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“Climate change impacts are likely to exacerbate market volatility, erode investor confidence, and increase the risk of financial crashes,” the senators wrote in their letter to CFTC Commissioner Rostin Behnam. “We strongly support your decision to assess climate-related risks to our financial markets and the impact on the stability of the global financial system. We encourage you to reach out to other financial regulatory agencies to urge them to follow your lead. We also encourage you to engage with the group of 36 international central banks and bank supervisors working together to develop analytic tools to assess climate-related financial risks.”

The letter was signed by U.S. Sens. Brian Schatz (D-HI), Sherrod Brown (D-OH), and members of the Senate Banking Committee.

“Climate change is increasing the frequency and severity of episodic severe weather events like droughts, floods, and wildfires; it is also changing long-term climate patterns in ways that will lower productivity, devalue and destroy fixed assets, stress agricultural yields, and ultimately affect every sector of our economy. The markets and market participants that the CFTC regulates will not be immune to these risks. Climate change impacts are likely to exacerbate market volatility, erode investor confidence, and increase the risk of financial crashes,” the senators wrote.

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CFPB to hold first symposium on June 25

Consumer Financial Protection Bureau (CFPB) officials said the Dodd-Frank Act’s prohibition on abusive acts or practices would be the prime focus of its first symposium on June 25.© Shutterstock The effort is part of a series announced earlier this year. While the Act authorizes the Bureau to take enforcement, supervision and rulemaking actions concerning unfair, […]

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Consumer Financial Protection Bureau (CFPB) officials said the Dodd-Frank Act’s prohibition on abusive acts or practices would be the prime focus of its first symposium on June 25.

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The effort is part of a series announced earlier this year. While the Act authorizes the Bureau to take enforcement, supervision and rulemaking actions concerning unfair, deceptive, or abusive acts and practices (UDAAP), the meaning of abusiveness is less developed than the meaning of unfair or deceptive, which have been defined substantially by the Federal Trade Commission Act.

The symposium, which officials said is designed to provide a public forum for the Bureau and the public to hear various perspectives on the meaning of abusiveness, will have two panels of UDAAP experts.

The effort will also include remarks by CFPB Director Kathleen L. Kraninger, as well as CFPB Deputy Director Brian Johnson.

The first panel will include a discussion with leading academic experts in the area of Consumer Protection on various policy issues relating to the abusive standard under Dodd-Frank. It will be moderated by Tom Pahl, CFPB’s Policy associate director of Research, Markets, and Regulation.

The second panel will examine how the abusive standard has been used in practice. That panel will be moderated by David Bleicken, CFPB deputy associate director of Supervision, Enforcement, and Fair Lending.

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Sen. Portman applauds House passage of IRS reform bill

U.S. Sen. Rob Portman (R-OH) applauded the passage of a bill by the U.S. House of Representatives that would implement certain reforms to the Internal Revenue Service.© Shutterstock The Taxpayer First Act includes many of the initiatives that Portman included in a bill he introduced last year called the Protecting Taxpayers Act. “The House-passed bill […]

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U.S. Sen. Rob Portman (R-OH) applauded the passage of a bill by the U.S. House of Representatives that would implement certain reforms to the Internal Revenue Service.

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The Taxpayer First Act includes many of the initiatives that Portman included in a bill he introduced last year called the Protecting Taxpayers Act.

“The House-passed bill includes many of the provisions from my Protecting Taxpayers Act, the IRS reform bill I introduced with Senator Cardin last year,” Portman said. “In particular, this bill includes provisions that establish an Independent Office of Appeals and strengthen taxpayers’ right to an appeal, an important taxpayer right first established in the 1998 IRS reform legislation that I authored in the House. The bill also preserves the IRS Oversight Board, giving the IRS and Congress a chance to revitalize the Board so that it may achieve its original purpose, acting as a board of directors for the agency.”

The bill would reconstitute the IRS Oversight Board, establish an Independent Office of Appeals and strengthen taxpayers’ right to an appeal, direct the IRS to develop a comprehensive training strategy for their employees and require the IRS to issue uniform guidance for the use of electronic signatures. The legislation would also reauthorize streamlined critical pay authority for IRS IT employees, protect low-income taxpayers by authorizing additional funding for the Volunteer Income Tax Assistance program, codify low-income taxpayer exceptions from fee waivers and lump sum payments associated with IRS payment plans, direct the IRS to issue procedures for when direct deposits of tax refunds are sent to the wrong account, and modify the IRS’s legal authority to issue a designated summons.

“This bill represents the most significant reform to the IRS in two decades and is an important first step toward restoring full faith in one of our government’s most important agencies,” Portman said. “There is still plenty of work that we can do to continue to modernize and strengthen the agency so that it better serves American taxpayers, and I look forward to Senate Finance consideration of additional IRS reform initiatives now that a new Commissioner is fully in place. I would urge my Senate colleagues to join me in passing this bipartisan, bicameral legislation so that it can be sent to the president’s desk for his signature.”

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Senators urge CFPB director to reverse rule allowing unlimited debt collection calls

A group of U.S. Senators recently called on Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger to reverse a proposed rule that would allow debt collection companies to send unlimited texts and e-mails to consumers. © Shutterstock Abusive and threatening debt collection tactics led to some 82,000 consumer complaints to the CFPB and about 458,000 […]

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A group of U.S. Senators recently called on Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger to reverse a proposed rule that would allow debt collection companies to send unlimited texts and e-mails to consumers.

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Abusive and threatening debt collection tactics led to some 82,000 consumer complaints to the CFPB and about 458,000 to the Federal Trade Commission in 2018.

“By allowing debt collectors to send consumers unlimited text messages and e-mails without first receiving affirmative consent for such a method of communication, the proposed rule permits collectors to overwhelm consumers with intrusive communications,” the senators wrote in a letter to Kraninger. “Furthermore, since the CFPB is not requiring collectors to use free-to-end-user text messaging, the CFPB is placing the cost burden of these text messages on the consumer.”

The senators also objected to the stipulation that would allow a debt collector to call a consumer seven times a week per debt.

“For a consumer with six medical debts, the proposed rule means that the consumer could receive up to 42 calls per week,” the senators wrote. “Given the number of American families harmed by abusive debt collection practices, we request that you reconsider this rulemaking and pursue more meaningful reforms that put consumers, not the debt collection industry, first.”

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