Friday's News

May 25, 2018

Long-sought reform of the Dodd-Frank Act was signed into law after a years-long national effort. NYBA thanks its many members who dedicated countless hours of grassroots action to ensure this important victory. Our work will continue. There was little to report from the State Capitol this week, as the major political parties held their nominating conventions.

Federal Legislative Developments

• NYBA applauds the passage of S. 2155 as the first meaningful change to the Dodd-Frank Act since 2010.  The legislation has now been signed by the President and will hopefully pave the way for other reforms in the regulation of banking in the aftermath of the financial crisis.  All nine New York Republican House Members voted in favor of the bill, as well as three New York Democrats: Sean Patrick Maloney, Kathleen Rice, and Tom Suozzi. Special recognition goes to all those bankers who participated in our grassroots action campaigns and our Washington and in-district meetings.  Your voices, in concert with your colleagues across the nation, made this result a reality. Key provisions of the bill include:

• Provide Qualified Mortgage designation for most mortgages held in portfolio by banks with less than $10 billion in assets
• Raise the threshold for designation as a systemically important financial institution from $50 billion in assets
• Apply principles of tailored supervision to larger banks
• End mandated stress tests for banks with under $100 billion in assets
• Simplify capital calculations for community banks
• Provide relief from appraisal requirements for smaller mortgages
• Institute longer exam cycles for community banks
• Provide charter flexibility for federal thrifts with less than $20 billion in assets
• Provide relief from the Volcker Rule for most community banks

Federal Regulatory Developments

• President Trump signed a Congressional Review Act resolution blocking the CFPB’s 2013 guidance on indirect auto lending, which sought to impose limits on what indirect lenders pay car dealers who provide loans and how much discretion dealers have to establish loan terms and rates. The rule was controversial when it was created, as the CFPB’s research into industry practices was thought to be flawed.
• The Senate voted to confirm Jelena McWilliams as chairwoman of the FDIC, installing the final major player of President Donald Trump's team of bank regulators. The Senate also voted to confirm Brian Montgomery as head of the Federal Housing Administration. He previously served as federal housing commissioner during the George W. Bush Administration.
• The OCC issued a bulletin encouraging banks to develop short-term, small dollar lending programs that are consistent with safe and sound banking practices. The bulletin also urges banks to report the repayment data to credit bureaus to help borrowers improve credit scores. In related news, the Consumer Financial Protection Bureau announced it will undertake a review of the current rule on payday lending.

State Political Developments

• This week, the state’s major political parties held their nominating conventions. Democrats nominated Governor Andrew Cuomo to run for a third-term as the Party’s standard bearer, with Lt. Governor Kathy Hochul and State Comptroller Thomas DiNapoli easily winning renomination. New York City Public Advocate Letitia James will run on the ticket for Attorney General. Republicans nominated Dutchess County Executive Marcus Molinaro to take on Governor Cuomo. Rounding out the GOP ticket are former Rye Deputy Mayor Julie Killian for Lt. Governor, political newcomer Keith Wofford for Attorney General, and investment banker Jonathan Trichter for State Comptroller.

Resources

• This week, the FDIC updated several chapters of the Compliance Examination Manual:  

Truth in Lending Act:  The Interagency TILA Examination Procedures were updated to reflect the 2016 amendments to the Mortgage Servicing Rule originally issued in 2013. 

Real Estate Settlement Procedures Act:The Interagency RESPA Examination Procedures were updated to reflect the 2016 amendments to the Mortgage Servicing Rule originally issued in 2013.

Questions?
Contact Mike Smith at (212) 297-1699 or msmith@nyba.com, Roberta Kotkin at (212) 297-1684 or rkotkin@nyba.com or Clare Cusack at (212) 297-1664 or ccusack@nyba.com .
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