CBA Writes House Leadership on CFPB Consitutionality Case, Need for Bipartisan Commission: CBA wrote Republican and Democratic Leadership of the House of Representatives this week regarding the possibility of the Supreme Court hearing the Seila Law vs. CFPB case. The potential of a court ruling that could install a director, removeable at-will, would bring increased confusion. A lack of certainty and long-term consistency in leadership at the Bureau adversely affects consumers, our economy and the financial services industry.
California AG Unveils Proposed Regulations Under CCPA: On Thursday, California Attorney General Xavier Becerra released the office’s proposed regulations implementing the California Consumer Privacy Act (CCPA). The law provides consumers with new rights on the use of their personal information.
As part of the rulemaking process, the Attorney General’s (“AG”) office will hold four public hearings in early December to allow interested person to present comments, either orally or in writing, on the proposed regulations.
The AG’s office will also accept written comments on the proposed regulations until December 6. CBA will review the proposed regulations and plans to submit comments to the AG’s office.
The report covers the Bureau’s activities from October 1, 2018 to March 31, 2019, including Director Kraninger’s nationwide listening tour and her focus on using all four tools at the Bureau’s disposal – education, regulation, supervision, and enforcement – to protect consumers and prevent consumers.
The report also highlighted issues faced by consumers in shopping for consumer financial products and services, noting matters surrounding natural disasters and credit reporting, first-time homebuying servicemembers, and insights on paying bills.
- For natural disasters and credit reporting, the Bureau found in 2017, roughly 8.3% of consumer credit included a FEMA assistance comment code at least once. This estimate is comparable to FEMA estimates disasters affected roughly eight percent of U.S. residents in 2017.
- On first-time homebuying servicemembers, the Bureau found the share of first-time homebuying servicemembers using VA mortgages increased, from 30 percent before 2007 to 63 percent in 2009. Among non-servicemember first-time homebuyers there was a parallel increase in the use of FHA and USDA mortgages. However, whereas non-servicemembers’ reliance on FHA/USDA mortgages declined after 2009, servicemembers’ reliance on VA loans continued to increase, reaching 78 percent by 2016.
- The Bureau also published a research brief, Consumer Insights on Paying Bills, examining the common challenges related to bill payment. The Bureau touched on a 2015 national survey on financial well-being that showed 43% of people reported covering expenses and bills in a typical month is somewhat or very difficult.
The Bureau also reported on their budget through the second quarter of fiscal year 2019, noting the Bureau had spent $281,851,000, 54% of which was spent on employee compensation for the 1,452 Bureau staff on roll. So far for fiscal year 2019, the Fed has provided the Bureau with $295,700,000 in funds.
Finally, the Bureau outlined the various enforcement actions and supervisory activities it had conducted during the time period, and highlighted consumer complaints by products received from the complaint database. CBA will be touching on many of the issues raised in the report in our letter for the record for Director Kraninger’s testimony, and look forward to further engaging with the Bureau moving forward.
CBA on White House Executive Order on Guidance: This week, President Donald Trump signed an Executive Order on the use of regulatory guidance that limits federal agencies’ use of guidance and also requires input in some instances. While guidance can be a useful tool in clarifying complex rules and regulations, it should not be used as a shortcut to implement new ones. Over the years, some regulatory heads have used the guidance process to achieve ideological goals which often limit choices for American consumers.
It is unfortunate a few individuals pushed the envelope instead of playing by the book and following the Administrative Procedure Act. CBA hopes there can be a balance in the future which allows beneficial guidance while still allowing for smart, efficient regulation.
Sallie Mae Launches Credit Cards Targeting Younger Market: Sallie Mae
this week unveiled three new credit cards specifically designed to promote and reward financial responsibility among college students and young adults in post-graduate life. Of note, the Sallie Mae Accelerate
card is the only cash back credit card offering a bonus when cardholders apply rewards to pay off student loans. As an additional offering, Sallie Mae
automatically enters Sallie Mae Ignite
and Accelerate cardholders to “Swipe Away $10K Sweepstakes
” – the chance to win $10,000 to pay down student loans where one winner is selected each month for a year.
Learn more about the credit cards here and check out CBA’s recommendations for student lending reforms here.
Bank of America to Continue Pittsburgh Retail Expansion: While a lender in Pittsburgh for many years, Bank of America entered the retail banking space last fall with the opening of its first branch in Upper St. Clair. The bank’s local visibility has considerably increased in western Pennsylvania since then and the long-term plan is to further grow the Pittsburgh market along with 25 to 30 additional markets across the nation.
Citizens Bank Looks West: Citizens Bank Looks West:
Rhode Island-based Citizens Bank
recently opened a regional operation office in Los Angeles, Calif., and has already signed 100 corporate clients in California. The bank is one of many looking for business outside of its market area with the intention to follow large clients to newer markets and seek more growth elsewhere. Learn more here
New CBA Associate Members: CBA is excited to welcome the following as new Associate Members for 2020!
- Valuation Partners
- RSM US LLP