House Financial Services Committee Advances Legislation that would Amend the Dodd-Frank Act

On April 13, the House Financial Services Committee voted by a 33-20 margin to advance H.R. 1486, the “Taking Account of Bureaucrats’ Spending Act.” The Act would amend the Dodd-Frank Act to strike provisions that allow for direct funding from Federal Reserve earnings to the CFPB. Supporters of the Act comment that it simply holds the CFPB accountable to Congressional oversight, subjecting it to the more conventional appropriations process, while those in opposition to the Act argue that it aims to defund, or dismantle, the CFPB.

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Congress Passes Bill to Extend Foreclosure Protection Element of the SCRA

On March 21, the U.S. House of Representatives passed S.B. 2393, which extends through 2017 the provision of the Servicemembers Civil Relief Act’s (SCRA) that protects servicemembers against foreclosure without a court order or waiver for one year following completion of their service. On January 1, 2016, the foreclosure protection provision reverted back to the period of active duty military service plus 90 days, rather than the period of active duty military service plus one year. Upon the President’s signature, the SCRA’s protection against foreclosure without a court order or waiver will return to the period of active duty military service plus one year through December 31, 2017.       

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Obama Administration’s FY 2017 Budget Proposal Makes Room for Small Dollar Loan Program

This week, the Obama Administration released the Fiscal Year 2017 Budget Proposal. President Obama’s proposed budget for the Department of the Treasury would, through the Community Development Financial Institutions (CDFI) Fund, reserve at least $10 million until September 30, 2018 to provide grants for loan loss reserve funds and to provide technical assistance for small dollar loan programs under section 1206 of the Dodd-Frank Act. The Small Dollar Loan Program, according to the budget proposal, “will support broader access to safe and affordable financial products and provide an alternative to predatory lending by encouraging CDFIs to establish and maintain small dollar loan programs.” Earlier this year, Senator Sherrod Brown (D-OH), in a letter to the President, requested that the FY 2017 budget proposal prioritize funding for small dollar loan programs, as outlined in Title XII – Improving Access to Mainstream Financial Institutions – of the Dodd-Frank Act.     Read more…

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Omnibus Spending Package Affects Cybersecurity Legislation

On December 15, Speaker Paul Ryan (R-WI) unveiled the omnibus spending bill, which includes the Cybersecurity Act of 2015 – legislation that would affect how businesses share information with each other and the government, and establish an information system for the government to share “cyber threat indicators and defensive measures in real time consistent with the protection of classified information” with federal and non-federal entities. The cybersecurity text included in the omnibus bill is a combination of three cybersecurity bills that were under legislative consideration this year, as follows: S. 754 – Cybersecurity Information Sharing Act of 2015; H.R. 1731 – National Cybersecurity Protection Advancement Act of 2015; and H.R. 1560 – Protecting Cyber Networks Act. Designating the Department of Homeland Security as the government’s proxy, the revised legislation provides entities with liability protections to voluntarily share with the government cybersecurity threat information. Specifically, regarding the sharing or receipt of cyber threat indicators, the legislation reads, “[n]o cause of action shall lie or be maintained in any court against any private entity, and such action shall be promptly dismissed, for the sharing or receipt of a cyber threat indicator or defensive measure under section 104(c).” Read more…

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House Report Examines the CFPB’s Methodology in Auto Finance Investigations

On November 24, Republicans on the House Committee on Financial Services issued a report regarding the CFPB’s approach for determining discrimination in the auto lending industry. The report questions the CFPB’s proxy methodology and its authority to bring claims against banks involved in indirect auto lending under the Equal Credit Opportunity Act’s (ECOA) disparate impact theory. According to the report, disparate impact “is a controversial legal theory of liability in discrimination cases.” The report further states that, even if it assumes that the ECOA permits disparate impact claims, the CFPB is nonetheless required to identify the following to establish a prima facie case: (i) a specific policy or practice adopted by the creditor; (ii) disparate impact on a prohibited basis; and (iii) a causal relationship between the challenged practice and the alleged disparate impact. Read more…

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