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Indiana Enacts Servicemembers Civil Relief Act
On May 4, Indiana Governor Michael Pence signed H.B. 1456 into law, amending the state’s civil relief act to include protections for servicemembers under the federal Servicemembers Civil Relief Act (SCRA). The legislation also requires the Indiana National Guard provide both active and reserve members a list that details the rights a servicemember or a dependent of a servicemember are entitled to under the state and federal SCRA. The law will take effect on July 1, 2015.
Congressman Introduces Legislation to Reform CFPB
On March 4, U.S. House Representative Randy Neugebauer introduced H.R. 1266, a bill to reform the CFPB’s leadership structure to replace its single director with a five-member commission appointed by the President. Representative Neugebauer serves at the Chairman of the Financial Institutions and Consumer Credit Subcommittee.
U.S. House Representatives Reintroduce Bill to Create Independent IG Position at CFPB
On February 12, Congressmen Steve Stivers (R-OH) and Tim Walz (D-MN) re-introduced the Bureau of Consumer Financial Protection-Inspector General Act of 2015, legislation that would create an independent IG position at the CFPB. The IG position would be appointed by the President and confirmed by the Senate. Currently, the CFPB and the Federal Reserve share an IG. The proposed legislation is intended to increase congressional oversight over the CFPB, which has been given “broad authority” to fulfill its mission to protect consumers.
Industry Trade Groups Urge Congress to Pass Legislation to Protect Consumers from Data Breaches
On February 12, seven industry trade associations co-authored a letter to Congress regarding anticipated data breach legislation. The letter urges Congress to protect its constituents from the impact of identity theft and financial fraud resulting from data breaches by (i) considering a national data security and breach standard; (ii) recognizing the existing fraud protection standards (e.g., HIPAA and GLBA) and having them serve as a model for sectors where there are none; and (iii) encouraging shared responsibility between entities, including costs. The letter is the latest effort among the industry to lobby Congress in passing legislation to combat increasing data breaches and fraud.
President Obama Signs Extension of SCRA's One-Year Foreclosure Protection
On December 18, after passing unanimously in both houses of Congress, President Obama signed into law S.3008, the Foreclosure Relief and Extension for Servicemembers Act of 2014. Previously, the SCRA’s protection for servicemembers against foreclosure for one year after the end of active duty was set to expire at the end of 2014. The Act extends this protection until the end of 2015, at which point the foreclosure protection is scheduled to revert to the period of active duty plus 90 days that was in effect in 2008.
President Obama Signs Law Allowing Authority To Implement Ukraine-Russian Sanctions
On December 18, President Obama signed into law H.R. 5859, the “Ukraine Freedom Support Act of 2014.” First introduced in the House on December 11, the bill gives the President the authority to impose sanctions against countries, entities, and individual persons that pose potential threats to financial stability through excessive risk-taking with the Russian market. The bill provides authority for sanctions against foreign persons, including executive officers of an entity, relating to (i) banking transactions; (ii) investing in or purchasing equity or debt instruments; (iii) U.S. property transactions; and (iv) Export-Import Bank of the United States assistance. Finally, the bill directs the President to “use U.S. influence to encourage the World Bank Group, the European Bank for Reconstruction and Development, and other international financial institutions to invest in and stimulate private investment in such projects.”
Congressional Leaders Urge FHFA To Investigate Fannie and Freddie Contractors
On December 11, Representatives Cummings (D-MD), Waters (D-CA), and Moore (D-WI) led the effort to submit a letter to FHFA’s IG requesting that the agency conduct a comprehensive audit to determine if Fannie and Freddie “are taking adequate steps to ensure that preservation companies maintain or service REO properties in compliance with the requirements of the Fair Housing Act.” The letter, which was signed by a total of 26 House Members, suggested that companies contracted by Fannie and Freddie to maintain their REOs provide inferior service within African-American, Latino, and other non-Caucasian communities. The Representatives’ allegations stem from National Fair Housing Alliance (NFHA) research, in addition to complaints filed with HUD and several U.S. banks. Moreover, the letter comes directly after the December 9 Senate Banking Committee hearing, “Inequality, Opportunity, and the Housing Market,” during which Deborah Goldberg, Special Project Director of NFHA, addressed that REOs are managed differently based on the community of the property.
Senator Warren And Congressman Cummings Urge GAO To Study Economic Vulnerability Of Non-Bank Mortgage Servicers, Risks To Consumers
On October 20, Senator Warren and Congressman Cummings co-authored a letter to the GAO requesting that the agency investigate possible effects on the non-bank servicing industry in the event of an economic downturn. In addition, the duo urged the GAO to study the potential risks to consumers should a major non-bank servicer fail. The letter stems from a report recently issued by the FHFA-OIG. The report cites that the rise in non-bank mortgage servicers “has been accompanied by consumer complaints, lawsuits, and other regulatory actions as the servicers’ workload outstrips their processing capacity.”
House Committee On Oversight And Government Reform Request Hearing Regarding Data Security Breach
On October 7, Elijah Cummings, the Ranking Member of the House Committee on Oversight and Government Reform, issued a letter asking committee Chairman Darrell Issa to hold a bipartisan hearing to examine a recent data security breach at a major U.S. financial institution. The breach is believed to have affected approximately 76 million households, in addition to 7 million small businesses. In his letter, Cummings told Issa that he believes an investigation into the breach “will help the Committee learn from [corporations] about security vulnerabilities they have experienced in order to better protect our federal information technology assets.” This is not the first time Cummings has asked Chairman Issa to hold hearings on the issue of data security. Cummings previously called for hearings on the issue in January and September of this year. To date, Chairman Issa has not responded to Cummings’s requests.
House Passes Nonbank Examination Bill; House Committee Approves Mortgage-Related Bills
On July 29, the U.S. House of Representatives passed by voice voteH.R. 5062, a bipartisan bill that would amend the Consumer Financial Protection Act with respect to the supervision of nondepository institutions, to require the CFPB to coordinate its supervisory activities with state regulatory agencies that license, supervise, or examine the offering of consumer financial products or services. The bill declares that the sharing of information with such state entities does not waive any privilege claimed by nondepository institutions under federal or state law regarding such information as to any person or entity other than the CFPB or the state agency. The following day, the House Financial Services Committee approved numerous bills, including two mortgage-related bills. The first, H.R. 4042, would require the Federal Reserve Board, the OCC, and the FDIC to conduct a study to determine the appropriate capital requirements for mortgage servicing assets for any banking institution other than an institution identified by the Financial Stability Board as a global systemically important bank. The bill also would prohibit the implementation of Basel III capital requirements related to mortgage servicing assets for non-systemic banking institutions from taking effect until three months after a report on the study. A second bill, H.R. 5148, would exempt creditors offering mortgages of $250,000 or below from certain property appraisal requirements established by the Dodd-Frank Act.