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  • House Appropriations Committee Approves Fiscal Year 2018 Funding Bills Affecting Housing and Urban Development, and Cybersecurity

    Federal Issues

    On July 17, the House Appropriations Committee (Committee) approved the fiscal year 2018 transportation, housing and urban development funding bill by a vote of 31-20. Of the total $56.5 billion in funding provided by the bill, $38.3 billion is allocated to the Department of Housing and Urban Development (HUD) for community planning and development, which is $487 million below fiscal year 2017 but $6.9 billion above President Trump’s request. According to Committee Chairman Rodney Frelinghuysen, the bill “includes responsible funding to ensure communities across the nation have access to necessary community development funds, and [will] provide housing to those who need it the most – including the poor, elderly, and disabled.”

    • A summary of the bill is available here.
    • A copy of the legislative text of the bill is available here.
    • A copy of the bill report is available here.

    On July 18, the Committee approved the fiscal year 2018 homeland security bill by a vote of 30-22. The bill allocates $703 million to cybersecurity programs, which is $18 million less than President Trump’s request but $33 million above fiscal 2017 levels.

    • A summary of the bill is available here.
    • A copy of the legislative text of the bill is available here.
    • A copy of the bill report is available here.

    Federal Issues Federal Legislation Financial CHOICE Act HUD Budget House Appropriations Committee Privacy/Cyber Risk & Data Security

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  • President Trump Releases 2018 Budget Proposal; Key Areas of Reform Target Financial Regulators, Cybersecurity, and Student Loans

    Federal Issues

    On May 23, the White House released its fiscal 2018 budget request, A New Foundation for American Greatness, along with Major Savings and Reforms, which set forth the President’s funding proposals and priorities. The mission of the President’s budget is to bring spending under control by proposing savings of $57.3 billion in discretionary programs, including $26.7 billion in program eliminations and $30.6 billion in reductions.

    Financial Regulators. The budget stresses the importance of reducing the cost of complying with “burdensome financial regulations” adopted by independent agencies under the Dodd-Frank Act. However, the proposal provides few details about how the reform applies to federal financial services regulators. Identifying the CFPB specifically, the budget states that restructuring the Bureau is necessary in order to “ensure appropriate congressional oversight and to refocus [the] CFPB’s efforts on enforcing the law rather than impeding free commerce.” Major Savings and Reforms assert that subjecting the Bureau to the congressional appropriations process would “impose financial discipline and prevent future overreach of the Agency into consumer advocacy and activism.” The budget projects further savings of $35 billion through the end of 2027, resulting from legal, regulatory, and policy changes to be recommended by the Treasury once it completes its effectiveness review of existing laws and regulations in collaboration with the Financial Stability Oversight Council. The Treasury review is being performed as a result of the Executive Order on Core Principals.

    Dept. of Housing and Urban Development. As previously reported in InfoBytes, the budget proposes that funding be eliminated for the following: (i) small grant programs such as the Self-Help Homeownership Opportunity Program, which includes, among others, the Capacity Building for Community Development and Affordable Housing Program (a savings of $56 million); (ii) the CHOICE Neighborhoods program (a savings of $125 million), stating state and local governments should fund strategies for neighborhood revitalization; (iii) the Community Development Block Grant (a savings of $2.9 billion), over claims that it “has not demonstrated results”; and (iv) the HOME Investment Partnerships Programs (a savings of $948 million). The budget also proposes reductions to the Native American Housing Block Grant and plans to reduce costs across HUD’s rental assistance programs through legislative reforms. Rental assistance programs generally comprise about 80 percent of HUD’s total funding.

    Cybersecurity. The budget states that it “supports the President’s focus on cybersecurity to ensure strong programs and technology to defend the Federal networks that serve the American people, and continues efforts to share information, standards, and best practices with critical infrastructure and American businesses to keep them secure.” Law enforcement and cybersecurity personnel across the Department of Homeland Security (DHS), Department of Defense, and the FBI will see budget increases to execute efforts to counter cybercrime. Furthermore, the National Cybersecurity and Communications Integration Center—which DHS uses to respond to infrastructure cyberattacks—will receive an increase under the budget.

    Student Loan Reform. Under the proposed budget, a single income driven repayment plan (IDR) would be created that caps monthly payments at 12.5 percent of discretionary income—an increase from the 10 percent cap some current payment plans offer. Furthermore, balances would be forgiven after a specific number of repayment years—15 for undergraduate debt, 30 for graduate. In doing so, the Public Service Loan Forgiveness program and subsidized loans will be eliminated, and reforms will be established to “guarantee that borrowers in IDR pay an equitable share of their income.” These proposals will only apply to loans originated on or after July 1, 2018, with the exception of loans provided to borrowers in order to finish their “current course of study.”

    Dept. of the Treasury. The budget proposes to, among other things: (i) eliminate funding for new Community Development Financial Institutions Fund grants (a savings of $220 million); and (ii) reduce funding for the Troubled Asset Relief Program by 50 percent, “commensurate with the wind-down of TARP programs” (a savings of $21 million).

    Response from Treasury. In a statement released by the Treasury, Secretary Steven T. Mnuchin said the budget “prioritizes investments in cybersecurity, and maintains critical funding to implement sanctions, combat terrorist financing, and protect financial institutions from threats.” Furthermore, it also would “achieve savings through reforms that prevent taxpayer bailouts and reverse burdensome regulations that have been harmful to small businesses and American workers.”

    Federal Issues Department of Treasury HUD Budget Privacy/Cyber Risk & Data Security Student Lending Bank Regulatory FSOC Trump

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  • President Trump Releases Budget Plan Proposal; HUD and Treasury Among Many Who Would Face Significant Cuts

    Federal Issues

    On March 16, the White House released its budget blueprint America First: A Budget Blueprint to Make America Great Again, which sets forth the President’s discretionary funding proposals in advance of the “full Budget”—scheduled for release later this spring. Among the many agencies and programs that would experience substantial cuts under the President’s budget are both the Department of Housing and Urban Development and the Department of the Treasury.

    Department of Housing and Urban Development (“HUD”). For HUD, the President’s 2018 budget requests $40.7 billion in gross discretionary funding for HUD, which is a $6.2 billion or 13.2 percent decrease from the 2017 annualized continuing resolution level. The White House budget also proposes that: (i) funding be eliminated or redirected to the State and Local level for the Community Development Block Grant program, which the White House estimates would save $3 billion from 2017 levels; (ii) funding be eliminated for “lower priority programs,” which the White House says include “the HOME Investment Partnerships Program, Choice Neighborhoods, and the Self-help Homeownership Opportunity Program”; (iii) funding be eliminated or redirected to the State and Local level for Section 4 Capacity Building for Community Development and Affordable Housing (at an estimated savings of $35 million from 2017 levels); (iv) support be provided for “homeownership through provision of Federal Housing Administration mortgage insurance programs.”

    Dept. of the Treasury. And, as for Treasury, the White House is proposing that the Department be granted $12.1 billion in discretionary resources. This proposal represents a $519 million or 4.1 percent decrease from the 2017 levels. Specifically, the White House’s budget proposes to, among other things: (i) preserve key operations of the Internal Revenue Service (“IRS”) to ensure that “the IRS can continue to combat identity theft, prevent fraud, and reduce the deficit through the effective enforcement and administration of tax laws,” while diverting resources away from “antiquated operations” that still rely on paper-based reviews;  (ii) “strengthen cybersecurity in a Department-wide plan to strategically enhance existing security systems and preempt fragmentation of information technology management across the bureaus”; (iii) “prioritize funding for Treasury’s array of economic enforcement tools”; (iv) “eliminate funding for Community Development Financial Institutions Fund grants”; (v) “empower the Treasury Secretary, as Chairperson of the Financial Stability Oversight Council, to ‘end taxpayer bailouts and foster economic growth by advancing financial regulatory reforms that promote market discipline and ensure the accountability of financial regulators;’” and (vi) “shrink the Federal workforce” while increasing its efficiency by redirecting resources away from "duplicative" policy offices.

    In response to the proposed budget, Treasury Secretary Steven T. Mnuchin released the following statement:

    "President Trump’s discretionary budget plan released today focuses Treasury on our core missions of collecting revenue, managing the nation’s debt, protecting the financial system from threats, and combating financial crime and terrorism financing. It will ensure that we have the resources we need to enforce the nation’s tax laws, while investing in cybersecurity and prioritizing resources on initiatives that promote technology, efficiency and modernization across the agency."

    Federal Issues Trump Budget HUD Department of Treasury

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  • House Financial Services Committee Approves Budget Views and Estimates for FY2018

    Federal Issues

    On March 1, the House Financial Services Committee met in open session and voted, along party lines, to approve its Budget Views and Estimates for Fiscal Year 2018. Among other things, the plan calls for advancing “legislative proposals—including the Financial CHOICE Act—to replace the failed aspects of the Dodd-Frank Act with free-market alternatives that end bailouts, restore market discipline, ensure that the financial system is more resilient, pare back unnecessary and burdensome regulations, encourage capital formation and economic growth, and protect consumers by preserving financial independence and consumer choice.” In addition, the Committee intends to advance legislation to place the non-monetary policy activities of the independent agencies within the Committee’s jurisdiction on the appropriations process. The Committee voted down, along party lines, a series of amendments submitted by the Democratic members.

    Federal Issues Consumer Finance Budget Dodd-Frank House Financial Services Committee UDAAP

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  • FDIC Approves Seventh Consecutive Reduction in Annual Operating Budget

    Federal Issues

    On December 13, the FDIC announced that its board of directors has approved a $2.18 billion operating budget for 2017, representing a 2.4 percent decrease from 2016 and a 46 percent decrease from its peak funding in 2010 at the height of the financial crisis. Commenting on the budget and staffing levels, FDIC Chairman Martin J. Gruenberg said, “This is the seventh consecutive reduction in the FDIC’s annual operating budget. These reductions are made possible by continuing steady improvement in the health of the U.S. banking industry.”

    Federal Issues FDIC Mortgages Budget

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