Issue two of our weekly update, designed to keep NACBA members abreast of any significant and relevant activity on the part of Congress, regulatory agencies and interest groups/think tanks over the week
ON THE HILL This week’s anticipated vote on the continuing resolution (CR) to fund the government past the September 30th expiration of the current fiscal year funding did not happen. However, as of the Thursday, negotiators are said to be just a couple of sticking points (offsets for Zika funding and disaster money for flood-ravaged areas of the county) away from a vote. Given the delays, both Senate Majority Leader Mitch McConnell (R-KY) and Speaker Paul Ryan (R-WI) have refused to commit to a timeline on the passage of a CR, but neither have suggested there is any serious threat of a government shutdown.
Senator Elizabeth Warren (D-MA) made headlines at Tuesday’s Senate Banking Committee hearing when she told Wells Fargo CEO John Stumpf that he should resign in the wake of the $185 million in penalties that Wells Fargo has been assessed as the result of an investigation into its sales practices abuses. And, it wasn’t just Senator Warren who took Stumpf to task; the criticism leveled at both the practices and Wells Fargo’s decision to fire over 5,000 low level employees in response to the investigation was bipartisan. Consumer Financial Protection Bureau Director Richard Cordray also testified at the hearing, and expressed concerns about a bank culture that attempts to “divide and conquer regulators.”
Robocalls are currently the number one complaint to the Federal Communication Commission (FCC) and as such have prompted the House Energy and Commerce’s Communications and Technology Subcommittee to look at whether the Telephone Consumer Protection Act (TCPA) needs to be updated. At a hearing this week, the Subcommittee examined how the law can be amended to continue shielding consumers from invasive and fraudulent phone calls, while ensuring companies can communicate with users without bearing an undue legal burden.
Coming up next week: The House Financial Services Committee will be holding a hearing on Tuesday, September 27th , entitled “Examining Legislative Proposals to Address Consumer Access to Mainstream Banking Services.” The hearing can be viewed on their website. Later in the week, the Committee is expected to hold a hearing on the Wells Fargo abuses.
IN THE AGENCIES A closely watched Federal Reserve’s Federal Open Market Committee met this week and voted to hold its main borrowing rate steady. While acknowledging that the case for a rate increase “has strengthened”, they determined that this was not the right time to increase interest rates. The decision followed lower-than-expected jobs numbers in August.
The Consumer Financial Protection Bureau (CFPB) sued five title lenders operating in Arizona — Auto Cash Leasing, LLC; Interstate Lending, LLC; Oasis Title Loans, LLC; Phoenix Title Loans, LLC; and Presto Auto Loans, Inc. — for failing to disclose the annual percentage rate in online advertisements about title loans. The Bureau alleges that the companies advertised a periodic interest rate for their loans without listing the corresponding annual percentage rate, a violation of the Truth in Lending Act.
In two separate actions, the Federal Trade Commission (FTC) obtained a court order banning mortgage relief scammers from the debt relief business and settled with a debt collections company’s former vice president who is now banned from the debt collection business. You can read about these actions here and here.
FROM THE INTEREST GROUPS A number of consumer groups have sent a letter to the House Energy and Commerce Committee’s Subcommittee, expressing support for their interest in improving consumer protections against unwanted robocalls, but also expressing concerns regarding some of their proposals. You can read the letter here.
In another disturbing look at the savings habits/abilities of Americans, a study from financial services website GoBankingRates found that “Close to half of those who earn from $100,000 to $149,999 a year have less than $1,000 in their savings accounts. Some 18 percent of them have socked away absolutely nothing.” While the study concluded that at all income levels, people have trouble spending less than they make, it will come as no surprise that those who had the hardest time saving are low-income workers.
A coalition of community banks and civil rights groups urged Congress to avoid making big changes to Fannie Mae and Freddie Mac during the omnibus appropriations debate. The group, which includes the Community Mortgage Lenders of America and Leadership Conference on Civil Rights, expressed “strong opposition” to “piecemeal” language attached to must-pass, year-end legislation. They voiced particular concern about any effort to spin off the companies’ system for bundling and selling mortgages. You can read their letter to the leaders of the House Financial Services and Appropriations committees.