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  • Rep. Cummings Calls for House Oversight Committee to Assert Jurisdiction Over Financial CHOICE Act

    Federal Issues

    As  covered in last week’s InfoBytes, on May 4 the House Financial Services Committee approved the revised Financial CHOICE Act of 2017, H.R. 10, in a party-line vote, 34-26. In a May 3 letter to House Oversight and Government Reform Committee Chairman Jason Chaffetz, Rep. Elijah Cummings (D-Md.), the Ranking Minority Member on that Committee,  urged the Committee “not to waive its jurisdiction over the Financial CHOICE Act, H.R. 10”—which he argues includes “numerous provisions that clearly fall within the legislative jurisdiction of the Committee.” Rep. Cummings also states in his letter that the proposed legislation would “destroy key financial regulations and consumer protections” and “place our economy at greater risk of another crisis.” Accordingly, he argues that “[i]t is imperative that the Committee review and vote on [H.R. 10’s] dangerous proposals.”

    Federal Issues Congress Financial CHOICE Act House Oversight Committee House Financial Services Committee

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  • Fannie and Freddie Open Records Act of 2017 Passes House, Forwarded on to the Senate

    Federal Issues

    On April 27, the House passed (by a vote of 425 to 0), the Fannie and Freddie Open Records Act of 2017 (H.R. 1694). The proposed measure—sponsored by House Oversight and Government Reform Committee Chairman Jason Chaffetz (R-UT)—would subject Fannie Mae and Freddie Mac to the transparency requirements applicable to federal agencies under the Freedom of Information Act (“FOIA”) for the duration of the time the enterprises remain under FHFA conservatorship. Pursuant to FOIA, the public has presumptive access to agency records unless the material falls within any of FOIA’s nine categories of exception. Having passed in the House, the bill was subsequently forwarded on to the Senate, where it has been assigned to the Senate Judiciary committee. An April 24 Committee Report on the bill provides some explanatory background on the issue addressed by the bill and the bill’s intentions.

    Federal Issues Fannie Mae Freddie Mac FOIA House Oversight Committee

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  • House Oversight and Investigations Subcommittee Explores Dodd-Frank’s “Too Big to Fail” Designation Process

    Federal Issues

    On March 28, the House Oversight and Investigations Subcommittee held a hearing that examined the processes used by the Financial Stability Oversight Council to designate nonbank financial companies under Section 113 of Dodd-Frank. As discussed in a memorandum issued prior to the hearing by the House Financial Services Committee, the hearing was also scheduled to go over the findings of a recent Financial Services Committee Staff Report, including concerns over whether FSOC has acted inconsistently in exercising its power to designate certain nonbank companies as “too big to fail.”  During the hearing, the subcommittee heard from the following witnesses:

    In a press release available on the Financial Services Committee webpage following the hearing, the majority members of the subcommittee identified the “Key Takeaways from the Hearing,” as: (i) “[t]he Dodd-Frank Act created an arbitrary threshold that the FSOC uses to designate systemically important financial institutions (SIFIs); (ii) “FSOC’s process for designating SIFIs in essence codifies "too big to fail" and poses a threat to the U.S. economy”; (iii) “[t]he Financial CHOICE Act, the Republican plan to replace Dodd-Frank and promote economic growth” would “end[] ‘too big to fail’ and bank bailouts.”

    Federal Issues House Oversight Committee Financial Stability Board Dodd-Frank House Financial Services Committee

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  • House Oversight Committee to Hold Hearing on March 21 Examining CFPB’s “Unconstitutional Design”

    Consumer Finance

    On March 16, the U.S. House of Representatives Subcommittee on Oversight and Investigations announced it will hold a hearing on Tuesday, March 21, at 10:00 a.m., entitled “The Bureau of Consumer Financial Protection’s Unconstitutional Design.” According to a March 16 Committee Memorandum, the hearing—which will be held in room 2128 of the Rayburn House Office Building—will examine, among other things, “whether the structure of the CFPB (Bureau) violates the Constitution as well as structural changes to the Bureau to resolve any constitutional infirmities.” The following witnesses are scheduled to testify:

    • The Honorable Theodore Olson, Partner, Gibson, Dunn & Crutcher LLP
    • Professor Saikrishna Prakash, James Monroe Distinguished Professor, University of Virginia School of Law
    • Mr. Adam White, Research Fellow, Hoover Institution
    • Ms. Brianne Gorod, Chief Counsel, Constitution Accountability Center

    Consumer Finance Federal Issues House Oversight Committee CFPB

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  • House Oversight Committee Seeks DOJ Documents On RMBS Settlements

    Financial Crimes

    On July 24, House Oversight Committee Chairman Darrell Issa (R-CA) sent a letter to Attorney General Holder raising questions about the DOJ’s “inclination to enter into settlement agreements with respect to mortgage securities fraud” claims. The Chairman notes that large RMBS settlements to date have been predicated on violations of FIRREA, which allows the DOJ to initiate lawsuits seeking civil money penalties. The letter suggests the DOJ’s decision not to litigate or secure a criminal plea diverges from the agency’s strategy in other contexts. Chairman Issa asks the DOJ to produce, by August 14, all documents and communications since January 2011 referring or relating to two recent major RMBS settlements, as well as any policies in effect during that time governing the decision to conclude pre-suit negotiations.

    RMBS DOJ Enforcement Financial Crimes House Oversight Committee

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  • House Oversight Committee Choke Point Inquiry Shifts To FDIC

    Consumer Finance

    On June 9, Darrell Issa (R-CA), Chairman of the House Oversight Committee, and Jim Jordan (R-OH), an Oversight subcommittee chairman, sent a letter to FDIC Chairman Martin Gruenberg that seeks information regarding the FDIC’s role in Operation Choke Point and calls into question prior FDIC staff statements about the agency’s role. The letter asserts that documents obtained from the DOJ and recently released by the committee demonstrate that, contrary to testimony provided by a senior FDIC staff member, the FDIC “has been intimately involved in Operation Choke Point since its inception.” The letter also criticizes FDIC guidance that institutions monitor and address risks associated with certain “high-risk merchants,” which, according to the FDIC, includes firearms and ammunition merchants, coin dealers, and payday lenders, among numerous others. The letter seeks information to help the committee better understand the FDIC’s role in Operation Choke Point and its justification for labeling certain businesses as “high-risk.” For example, the letter seeks (i) all documents and communications between the FDIC and the DOJ since January 1, 2011; (ii) all FDIC documents since that time that refer to the FDIC’s 2012 guidance regarding payment processor relationships; and (iii) all documents referring to risks created by financial institutions’ relationships with firearms or ammunition businesses, short-term lenders, and money services businesses.

    FDIC Payday Lending DOJ U.S. House Payment Processors House Oversight Committee Operation Choke Point

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