View from CBA - May 15, 2015

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Discussion Draft Released for Senate Regulatory Relief Bill
Last week, we noted the Senate Banking Committee could vote this week on legislation aimed at providing regulatory relief for small and regional banks (among other things). The vote has been postponed until next week, but Senate Banking Chairman Richard Shelby has released draft text of the bill. As suspected, Chairman Shelby's discussion draft appropriately addresses the repercussions of the 'one-size-fits-all' framework implemented by Dodd-Frank. We appreciate the Chairman's thoughtful approach to regulatory relief for U.S. financial institutions and, given the bipartisan support for a number of these provisions in the past, hope Republicans and Democrats can work together in the coming days to advance these reforms. The discussion draft and a section-by-section summary are available for review.
Sens. Vitter and Warren Propose Fed Changes
Late last week, Sens. David Vitter and Elizabeth Warren introduced a Federal Reserve reform bill which would require the seven-member Fed Board to vote on all enforcement actions against banks which result in fines of more than $1 million. The lawmakers cite transparency at the central bank as the nexus for the legislation. Though CBA has not taken a position on the Vitter/Warren bill, we do support an open, transparent process in all aspects of government. Take the CFPB for example, changing the CFPB's leadership structure from a single director to its originally-planned bipartisan commission is a longstanding CBA goal and one which would also lead to greater transparency. Now that Sen. Warren has demonstrated her fondness of boards and greater transparency, we hope she will revive her support for a CFPB Commission.
CFPB Commission Bill Gains Bipartisan Support
Speaking of changing the CFPB's leadership structure to its originally-planned bipartisan commission, we have been hoping Congress would make this change on a bipartisan basis and have been urging Republicans to hold off on advancing this idea until Democrats join the effort. To these ends, we are happy to report two Democrats—Rep. Kyrsten Sinema from Arizona and Rep. David Scott from Georgia—have signed on to this bill. We will continue to urge more Democrats to sign on to the bill in the coming days.
TRID Compliance Systems Not Ready
Congress again heard from experts this week about challenges to meet the TRID deadline. In addition to this hearing, the American Bankers Association released a survey which reported only nine percent of banks surveyed had received or were expected to receive TRID compliance systems by April—79 percent of banks surveyed could not verify a precise delivery date, or were told they would not receive systems before June. This hearing and survey comes on the heels of our discussion with Deputy Director Antonakes at CBA LIVE and numerous board surveys we have provided the Bureau to illustrate our member's concerns.
As we have said many times, this is a colossal undertaking dependent on timely deliverables from outside vendors and significant testing and training. Our members are working very hard to meet the deadline so as not to delay or slow consumers' access to credit. But we are continuing to urge the Director to offer a hold-harmless period for those who are making a good faith effort to comply.
Members-Only Call
On Tuesday, May 19, 2015, please join us for a member briefing on current regulatory and legislative topics, including TRID, short-term liquidity, regulatory relief and consumer complaints, as well as a rapid fire round on other hot topics. More details here...
What We're Reading
The Federal Reserve Asset Bubble Machine – Ruchir Sharma, WSJ
Student Loans and U.S. Prospertiy – Steven Markovich, CFR
Missing in Financial Rules Debate: Hard Numbers – Greg Ip, WSJ
Wells Fargo's Abid Gilani, a Senior Vice President on the bank's Commercial Real Estate Team, was killed in this week's Amtrak crash in Philadelphia. Our thoughts and prayers are with his family and our friends at Wells Fargo.