House advances two McHenry bills within NDAA

Two bills sponsored by Rep. Patrick McHenry (R-NC) were included in the fiscal year 2022 National Defense Authorization Act (NDAA), which was approved by the House of Representatives passed. Rep. Patrick McHenry The McHenry-sponsored bills included in the NDAA by the House are the Eliminate Barriers to Innovation Act and the Debt Bondage Repair Act. […]

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Two bills sponsored by Rep. Patrick McHenry (R-NC) were included in the fiscal year 2022 National Defense Authorization Act (NDAA), which was approved by the House of Representatives passed.

Rep. Patrick McHenry

The McHenry-sponsored bills included in the NDAA by the House are the Eliminate Barriers to Innovation Act and the Debt Bondage Repair Act.

“The NDAA is one of the most important pieces of legislation Congress works on each year,” McHenry, the House Financial Services Committee’s lead Republican, said. “It protects our national security and ensures our troops have the resources they need. I’m proud to lead two critical, bipartisan provisions in this year’s package, alongside several Financial Services Committee Republican initiatives.”

The Eliminate Barriers to Innovation Act promotes international competitiveness by preventing jobs in the digital asset industry from being pushed overseas by a lack of domestic regulatory clarity here at home, while the Debt Bondage Repair Act aids victims of trafficking in regaining financial freedom and rebuilding their lives.

Per the legislation, the Eliminate Barriers to Innovation Act requires the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to establish a joint working group on digital assets.

“These provisions show what Congress can achieve when we come together to find targeted, bipartisan solutions to important issues facing the American people,” McHenry said.

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CFPB research identifies trends in the complaints they receive from consumers

The Consumer Financial Protection Bureau (CFPB) released a report last week that examines patterns in the consumer complaints that they receive. © Shutterstock The report, called “Consumer complaints throughout the credit life cycle, by demographic characteristics,” revealed some interesting trends. One of the findings was that complaints from wealthier communities and communities with higher percentages […]

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The Consumer Financial Protection Bureau (CFPB) released a report last week that examines patterns in the consumer complaints that they receive.

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The report, called “Consumer complaints throughout the credit life cycle, by demographic characteristics,” revealed some interesting trends. One of the findings was that complaints from wealthier communities and communities with higher percentages of white, non-Hispanic residents were more frequently about loan origination and performing servicing.

In contrast, complaints from communities of color and lower-income communities were more frequently about credit reporting, identity theft, and delinquent servicing.

The findings are based on the nearly 1 million consumer complaints submitted to the CFPB between 2018 and 2020.

“Today’s report confirms that the experiences and concerns of communities, with consumer financial products and services, vary by race and wealth,” CFPB Acting Director Dave Uejio said. “Our consumer complaint data is a crucial tool for understanding varying consumer experiences, including across racial and economic divides.”

The report also found that Asian American and Pacific Islander communities had higher rates of submitting credit reporting complaints than predominantly white, non-Hispanic communities. However, they also had a lower share of delinquent servicing complaints.

Overall, complaints about loan originations increased by nearly 50 percent over the course of 2020, driven largely by mortgage complaints. This increase was centered in higher-income neighborhoods and neighborhoods with fewer people of color. Neighborhoods with the highest share of white, non-Hispanic consumers submit complaints about loan originations at more than twice the rate of neighborhoods with the highest share of Black consumers.

The findings from this research will help inform the CFPB’s work.

“The CFPB will continue its research into consumer complaint data as part of its larger commitment to put consumers, and their varying experiences with consumer financial products and services, at the foundation of all its work,” officials said.

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JEC hearing examines how residential electrification is key to meeting climate change goals

The congressional Joint Economic Committee (JEC) held a hearing recently that looked at how home and building electrification is critical to addressing climate change and advancing economic growth.© Shutterstock The hearing, “Examining the Economic Benefits of Electrifying America’s Homes and Buildings,” revealed that there is an immediate need to engage in easily deployed, scalable climate […]

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The congressional Joint Economic Committee (JEC) held a hearing recently that looked at how home and building electrification is critical to addressing climate change and advancing economic growth.

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The hearing, “Examining the Economic Benefits of Electrifying America’s Homes and Buildings,” revealed that there is an immediate need to engage in easily deployed, scalable climate action. Further, it found that residential and building electrification is one of the surest, most cost-effective solutions, as American households account for 42 percent of energy-related carbon emissions.

The discussion detailed how the electrification of homes and businesses will reduce the burden of energy costs for families and businesses and improve public health and safety.

“These new electric appliances will be much more efficient than the fossil fuel-powered machines they are replacing. And that means significant savings for these families on their monthly utility bills. Those savings can make an enormous difference for a family living paycheck to paycheck,” said U.S. Sen. Martin Heinrich (D-NM), JEC vice chair, who presided over the hearing. “And, importantly for our climate, all of these electrified machines can be powered by all the new clean and carbon pollution-free electricity that we will generate in our new clean energy economy. This is how we can power our long-term economic recovery and save families money by solving our pressing climate challenge.”

Among the witnesses who testified at the hearing were Ari Matusiak, CEO at Rewiring America; Dr. Leah Stokes, associate professor of Political Science at the University of California, Santa Barbara; and Donnel Baird, founder and CEO at BlocPower.

“Electrifying homes and buildings is an important component of addressing the existential threat of climate change. The benefits of electrification go beyond the environmental and health benefits of lower global temperatures. These technologies help reduce residential energy costs, which boosts household disposable income – a boon to local businesses across the country – and improve public health outcomes,” JEC Chair Rep. Don Beyer (D-VA) said. “The scale of the challenges our planet is facing as a result of climate change is great. We must take this opportunity to deploy every tool at our disposal to meet the moment.”

Matusiak, one of the witnesses, said that to achieve zero emissions by 2050, America must replace or install one billion new clean energy machines across all of those households.

“Every time a water heater needs replacement in America, it presents an opportunity to install an efficient, electric heat pump alternative. Every time that opportunity is missed, we put further pressure on hitting our 2050 target. Every machine counts … We do not need to wait on any moonshot technology: it has all already been invented. We do not need to ask Americans to sacrifice or change their lifestyles to survive: indeed, their lives will improve with efficient, electric appliances and equipment.”

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CUNA voices support for inclusion of SAFE Banking Act in NDAA

The Credit Union National Administration (CUNA) wrote leaders in the U.S. House of Representatives to express its support for the inclusion of the Secure and Fair Enforcement (SAFE) Banking Act into the fiscal year 2022 National Defense Authorization Act (NDAA). © Shutterstock This week, the House Rules Committee approved the amendment to include the SAFE […]

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The Credit Union National Administration (CUNA) wrote leaders in the U.S. House of Representatives to express its support for the inclusion of the Secure and Fair Enforcement (SAFE) Banking Act into the fiscal year 2022 National Defense Authorization Act (NDAA).

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This week, the House Rules Committee approved the amendment to include the SAFE Banking Act into the NDAA. Now the amendment goes to a vote of the full House for inclusion.

The SAFE Banking Act would allow cannabis businesses in states where it is legal to access the banking system. Typically, cannabis business owners use cash in states where it is legal because they can’t get credit. This is not only inconvenient but creates public safety concerns for these owners and the communities they are in. This bill would provide a safe harbor and other protections for financial institutions serving legal, cannabis-based businesses.

“Credit unions operating in states where it is legal have members and member businesses involved in the cannabis market who need access to traditional depository and lending services, the absence of which creates a significant public safety issue,” the letter dated Sept. 21 said.

“Inclusion of the SAFE Banking Act puts in place necessary protections to bring revenue from state-sanctioned cannabis businesses into the financial services mainstream and, as a result, keeping communities safe,” CUNA President and CEO Jim Nussle wrote in a letter to House Speaker Nancy Pelosi (D-CA) and Minority Leader Kevin McCarthy (R-CA).

The amendment was offered by U.S. Reps. Ed Perlmutter (D-CO), Nydia Velázquez (D-NY), Warren Davidson (R-OH), Lou Correa (D-CA), Earl Blumenauer (D-OR), David Joyce (R-OH), and Barbara Lee (D-CA).

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Warner, Himes introduce Portable Retirement and Investment Account Act

A pair of lawmakers have introduced a measure they said seeks to create accessible, universal, portable retirement and investment accounts while also modernizing the nation’s retirement system.© Shutterstock Sen. Mark Warner (D-VA) and Rep. Jim Himes (D-CT) said their bill, the Portable Retirement and Investment Account (PRIA) Act of 2021, would bring more people into […]

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A pair of lawmakers have introduced a measure they said seeks to create accessible, universal, portable retirement and investment accounts while also modernizing the nation’s retirement system.

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Sen. Mark Warner (D-VA) and Rep. Jim Himes (D-CT) said their bill, the Portable Retirement and Investment Account (PRIA) Act of 2021, would bring more people into the retirement system and make it easier for Americans to save.

“Americans are more likely to change jobs and be engaged in non-traditional forms of work than they were a generation ago, but our policies haven’t kept up with these shifts,” Warner said. “As more and more Americans hold multiple jobs across a career, a year, and even a day, PRIA will provide more workers with access to flexible, portable benefits such as retirement savings that will carry with them from employer to employer and gig to gig.”

Via the legislation, each American will receive a PRIA when they receive a Social Security Number and the PRIAs will be administered by an independent board — managed by selected financial institutions.

Upon creation of the initial account, account holders are presented the option of choosing investment opportunities from a qualified financial institution, per the measure.

“The current retirement system isn’t working for all Americans,” Himes said. “The options to which American workers have access can differ significantly based on their area of employment and the systems can be needlessly confusing. In addition, many Americans lose access to retirement savings vehicles if they lose their jobs, and gig, contract, and part-time workers are often ineligible. PRIA changes all of this.”

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Democratic senators voice concerns about Special Purpose Acquisition Companies

Several Democratic U.S. senators are raising concerns about what they call abuses by the creators and operators of Special Purpose Acquisition Companies, or SPACs.© Shutterstock Sens. Elizabeth Warren (D-MA), Sherrod Brown (D-OH), Tina Smith (D-MN), and Chris Van Hollen (D-MD) expressed their concerns via letter to six creators of prominent SPACs, which are publicly traded […]

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Several Democratic U.S. senators are raising concerns about what they call abuses by the creators and operators of Special Purpose Acquisition Companies, or SPACs.

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Sens. Elizabeth Warren (D-MA), Sherrod Brown (D-OH), Tina Smith (D-MN), and Chris Van Hollen (D-MD) expressed their concerns via letter to six creators of prominent SPACs, which are publicly traded shell companies that raise money to buy private companies and take them public.

Their concerns are centered on whether industry insiders may be able to take advantage of retail investors throughout the SPAC process to the benefit of large institutional investors such as hedge funds, venture capital insiders, and investment banks.

“We seek information about your use of SPACs in order to understand what sort of Congressional or regulatory action may be necessary to better protect investors and market integrity and ensure a fair, orderly, and efficient marketplace,” wrote the senators to each of the SPAC creators. “We are concerned about the misaligned incentives between SPACs’ creators and early investors on the one hand, and retail investors on the other.”

The letters were sent to Howard Lutnick, chairman and CEO of Cantor Fitzgerald; Michael Klein, founder of M. Klein & Associates; Tilman Fertitta, chairman and CEO of Fertitta Entertainment; Chamath Palihapitiya, co-founder and CEO of The Social+Capital Partnership; David Hamamoto, CEO and chairman of DiamondHead Holdings; and Stephen Girsky, managing partner at VectoIQ.

Specifically, among the concerns raised by lawmakers is that SPAC creators, or “sponsors,” have incentives to quickly strike merger deals, regardless of the quality of the deal or of the company to be acquired. Another potential issue is that early investors (often investment banks and hedge funds) are essentially guaranteed risk-free investments. In addition, they are worried that both sponsors and early investors profit from hyperbolic, pre-merger claims about the company to be acquired while retail investors who purchase shares based on those hyperbolic claims are often left with devalued shares.

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Sens. Wyden, Crapo target mental health care barriers

A pair of lawmakers are soliciting the input of industry professionals regarding efforts to address mental health care barriers. © ShutterstockRon Wyden Senate Finance Committee Chairman Sen. Ron Wyden (D-OR) and Finance Committee Ranking Member Sen. Mike Crapo (R-ID) are examining methods to develop bipartisan legislation addressing mental health care access barriers amid the COVID-19 […]

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A pair of lawmakers are soliciting the input of industry professionals regarding efforts to address mental health care barriers.

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Ron Wyden

Senate Finance Committee Chairman Sen. Ron Wyden (D-OR) and Finance Committee Ranking Member Sen. Mike Crapo (R-ID) are examining methods to develop bipartisan legislation addressing mental health care access barriers amid the COVID-19 pandemic.

“Far too often, individuals across the country struggle to access timely, quality mental health care and substance use disorder services and the COVID-19 pandemic has exacerbated unmet behavioral health care needs,” Wyden and Crapo wrote. “We seek input from stakeholders across the health care continuum to help us better understand how Congress can address these challenges. Our goal is to develop a bipartisan legislative package before the end of the year addressing many of the behavioral health care challenges currently faced by millions of Americans.”

The solicited input focuses on strengthening the workforce; increasing integration, coordination and access to care; ensuring behavioral and physical health care parity; and advancing implementation of telehealth.

The Finance Committee previously conducted a hearing examining means of improving mental health and substance use treatment. Wyden and Crapo initiated the Finance Committee’s legislative push to improve behavioral health care via correspondence to committee members.

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Bill encourages consumer fraud reporting by whistleblowers

Sen. Catherine Cortez Masto (D-NV) has introduced a bill she said incentivizes consumer fraud reporting to the Consumer Financial Protection Bureau (CFPB).© Shutterstock The Financial Compensation for Consumer Financial Protection Bureau (CFPB) Whistleblowers Act is cosponsored by Senate Banking, Housing, and Urban Affairs Committee Chairman Sen. Sherrod Brown (D-OH) and Sens. Dick Durbin (D-IL), Elizabeth […]

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Sen. Catherine Cortez Masto (D-NV) has introduced a bill she said incentivizes consumer fraud reporting to the Consumer Financial Protection Bureau (CFPB).

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The Financial Compensation for Consumer Financial Protection Bureau (CFPB) Whistleblowers Act is cosponsored by Senate Banking, Housing, and Urban Affairs Committee Chairman Sen. Sherrod Brown (D-OH) and Sens. Dick Durbin (D-IL), Elizabeth Warren (D-MA), Jeff Merkley (D-OR), Richard Blumenthal (D-CT) and Tina Smith (D-MN).

The bill says the CFPB would be able to reward whistleblowers between 10 and 30 percent of a particular settlement award from the Civil Penalty Fund. Additionally, with regard to cases involving monetary penalties of less than $1 million, the CFPB would be able to award any single whistleblower 10 percent of the amount collected or $50,000, whichever is greater.

“Whistleblowers are essential to our democracy,” Brown said. “Whistleblowers risk their career and their reputation to reveal corruption and bad actors seeking to exploit consumers and our government. We must do more to protect them during and after the pandemic to ensure that whistleblowers feel safe coming forward. This legislation does just that by protecting whistleblowers from retaliation and incentivizing them to come forward with their information.”

The legislation seeks to reward whistleblowers with compensation for reporting illegal activities to the CFPB, noting whistleblower statutes protect people from unfair practices, fraud and abuse.

“Whistleblowers play a vital role in protecting consumers from exploitation, risking their careers and livelihoods to report corrupt and unethical business practices,” Cortez Masto said. “Protecting consumers from fraud has been a top priority for me throughout my career, and we’ve got to do more to help vulnerable Nevadans. This legislation will not only make it safer for whistleblowers to report wrongdoing, it will also protect Nevada consumers from bad actors and discourage future misconduct by holding companies accountable.”

The measure would also enable a whistleblower to retain independent counsel and does not require the whistleblower to enter a contract with the CFPB. Further, it protects a whistleblower’s identity.

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Bank Policy Institute issues statement to House on consumer data security

The Bank Policy Institute (BPI), a nonpartisan public policy, research and advocacy group representing banks and their customers, issued a statement this week on consumer data security in advance of a U.S. House Committee on Financial Services Task Force on Financial Technology hearing on Sept. 21.© Shutterstock While consumers should be able to use their […]

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The Bank Policy Institute (BPI), a nonpartisan public policy, research and advocacy group representing banks and their customers, issued a statement this week on consumer data security in advance of a U.S. House Committee on Financial Services Task Force on Financial Technology hearing on Sept. 21.

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While consumers should be able to use their preferred applications to manage spending and other financial matters, they should not have to forfeit data security and privacy, BPI officials said. The group offers three key recommendations: consumer financial data should be safe and secure regardless of who holds it; informed consumer consent should be obtained; and consumers should have control over the type and amount of information shared.

“BPI supports consumers’ ability to access and share their personal financial data,” BPI wrote in the statement. “It is of paramount importance that this data is shared based on informed consumer consent and effective consumer control over the type and amount of information that is shared and that the data is maintained in a safe and secure manner regardless of where, why or with whom that data is maintained.”

There are approximately 120 different data aggregators in the United States, according to BPI. They are in the business of collecting data through a variety of practices, some of which, such as screen scraping, pose data security risks to consumers. Screen scraping allows third parties to harvest a wide swath of consumer data, often far in excess of the information needed to offer a specific service or product. Some estimates indicate that the largest U.S. aggregators may hold in their possession the financial information of millions of consumers, creating a prime target for malicious actors and a significant risk for consumer privacy.

BPI argues that the industry should eliminate screen scraping practices and transfer data more securely via an Application Programming Interface (API). The use of APIs would help to empower and protect consumers by ensuring their control over who has access to their data, how much data is shared and when data sharing authorization is terminated with third parties.

In addition, BPI calls upon the Consumer Financial Protection Bureau to use its authority to apply existing data security and privacy standards to data aggregators. Further, it suggests the FFIEC examination guidance as a useful framework for information security requirements for these providers. These changes would reduce instances of serious fraud and enhance consumer data security.

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Sen. Wyden lauds grant allocations for mental health

Senate Finance Committee Ranking Member Ron Wyden (D-OR) said the recent allocation of state Medicaid program planning grants would aid those suffering from mental health and substance use crises.© ShutterstockRon Wyden Officials indicated the allocations to 20 state programs, via the Centers for Medicare & Medicaid Services, are modeled after the Eugene, Oregon-based CAHOOTS initiative, […]

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Senate Finance Committee Ranking Member Ron Wyden (D-OR) said the recent allocation of state Medicaid program planning grants would aid those suffering from mental health and substance use crises.

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Ron Wyden

Officials indicated the allocations to 20 state programs, via the Centers for Medicare & Medicaid Services, are modeled after the Eugene, Oregon-based CAHOOTS initiative, which enables a multi-disciplinary team to respond to mental health crises as a means of stabilizing and de-escalating situations while helping to connect individuals to needed health care services.

“These grants will kick start the effort to help those experiencing a mental health crisis get the services they need and reduce the prospect of an encounter with law enforcement,” Wyden said. “I’m optimistic that communities around the country will be able to implement mobile crisis intervention services with this major investment from Medicaid. Meanwhile, I continue to work to extend this program and truly reimagine public safety in the United States.”

Under the American Rescue Plan, $15 million will be made available to states, officials noted, detailing an opt-in feature would provide a higher federal Medicaid match, based upon the Federal Medical Assistance Percentage of 85 percent for qualifying mobile crisis services.

Authorities said the Congressional Budget Office (CBO) estimates the match would give states $1 billion in additional federal Medicaid dollars for mobile crisis services in the future.

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