House of Commons Financial Services Committee Chair Waters sends letter to President-elect Biden with recommended rule cancellations and other actions Ballard Spahr LLP
Earlier this month, House Financial Services Committee Chair Maxine Waters sent a letter to President-elect Joe Biden recommending various actions the Biden administration should take in the area of financial services. President Waters and her staff should have a strong voice in shaping the Biden administration’s approach to financial services regulatory policy. As a result, President Waters’ letter is likely to receive special attention from the President-elect’s agency review teams and influence the priorities of those appointed to lead financial regulatory agencies.
President Waters’ letter sets out a broad agenda for the Biden administration in the areas of COVID-19 assistance, climate change, diversity and inclusion, affordable housing, consumer protection, protection of investors, financial stability and international development. It includes as an attachment a list of regulatory and administrative measures of the Trump administration “which [President-elect Biden’s] the team must prioritize the elimination of the first day of [his] presidency. “
In the area of consumer financial services, President Waters’ recommendations include the following actions “which should be taken to help struggling consumers during the pandemic”:
- CFPB director Kraninger should be fired and a new director appointed “who will fulfill CFPB’s statutory mission of protecting consumers”.
- The CFPB, under new leadership, is expected to be tasked with “aggressively protecting consumers by enforcing the law”.
- CFPB should repeal the July 2020 rule that overruled the underwriting provisions in its 2017 rule on payday, vehicle title and certain high-cost installment loans (2017 payday rule) and reinstate the rule. of 2017 on the payday.
- New CFPB Director Should Restore Role and Responsibilities of Fair Lending and Equal Opportunities Office
- The CFPB is expected to repeal its debt collection rule and reissue it “with significant protections for consumers, as well as the new proposed rule on debt statute of limitations.”
- Once he becomes president, Biden is expected to issue an executive order ordering the Treasury and other federal agencies to immediately suspend collection of debts owed by consumers to the federal government until the end of the pandemic.
Other recommendations in the area of consumer financial services include:
- In addition to reinstating the 2017 payroll rule and rescinding the debt collection rule and re-issuing a collection rule with stricter protections for consumers, the CFPB is expected to publish new rules with stricter guarantees for consumers in areas that include fair loans, credit reports, student loans, and forced arbitration clauses. and overdraft protection.
- the OCC and FDIC should cancel their Madden-fix rules and the OCC should cancel its Rule of the “true lender”.
- The DOJ, CFPB and federal banking regulators should prioritize fair application of loans.
- CFPB is expected to expand mortgage data to be collected by HMDA.
- OCC should cancel his ARC rule and federal banking regulators “should be working on a new plan to strengthen the implementation of ARC to ensure that we can finally end modern redlining.”
- The CFPB should quickly implement Dodd-Frank Section 1071 data collection requirements for small businesses.
- The CFPB should cancel its no-action letter policy, test disclosure program, and compliance support sandbox.
- CFPB should cancel his policy statement on abusive acts or practices.
Among the letter’s recommendations in the area of diversity and inclusion, there is a recommendation involving the Minority and Women’s Inclusion Offices (OMWI) that Section 342 of the Dodd-Frank Act required the CFPB, federal bank agencies and other federal agencies to be created. The letter calls on the Biden administration to make “full use” of Section 342 and, as an example, recommends the Biden administration to require agencies to compel regulated institutions to comply with the Joint standards for assessing the diversity policies and practices of regulated entities, including annual reporting of diversity data. Currently, the use of common standards by regulated entities and the submission of diversity self-assessments to OMWIs are voluntary. The letter also recommends that “given the exacerbated decline of black businesses, in particular, following the COVID-19 pandemic, [the Biden] The administration should ensure that the OMWIs monitor and advise on the consequences and unintended damage that could be caused by the agency’s policies to minority-owned businesses and communities of color.
In her letter, President Waters also calls on the Biden administration to demand that state-owned companies and regulated entities disclose the diversity of their boards of directors, including approving proposals from national stock exchanges to change their listing standards to ” require such disclosure as well as set a minimum diversity on the board of directors. standards. Members of Ballard Spahr’s Diversity and Inclusion team recently posted a legal alert on the proposed rule filed by the Nasdaq Stock Market with the United States Securities and Exchange Commission. If approved, the rule will require listed companies to disclose the race, LGBTQ + status and gender makeup of their boards of directors and to have a minimum number of diverse directors or explain why they do not. have not been able – or have chosen not to – achieve the objectives set.