Mark up holds plenty of provisions for financial institution regulators

About half of the 23 bills set to be marked up Tuesday by the House Financial Services Committee would have an impact on federal financial institution regulators, particularly the Federal Reserve, according to a committee memo distributed with the bills.

The mark up gets underway by the committee at 10 a.m. in Rayburn House Office Building, room 2128.

At least 12 of the nearly two dozen bills directly affect the regulatory agencies or their rules. Those include H.R. 1153, the “Mortgage Choice Act,” which would amend the Truth in Lending Act (TILA) by modifying the definition of “points and fees” determining whether a mortgage can be a “qualified mortgage.” According to the committee memo, the bill excludes insurance and taxes held in escrow and fees paid to affiliated companies as a result of their participation in an affiliated business arrangement from the calculation of points and fees.

Under the bill, the Consumer Financial Protection Bureau (CFPB) would be required to amend its regulations related to Qualified Mortgages to reflect the new exclusions.

Banks and credit unions have strongly backed the measure, sponsored by Rep. Bill Huizenga (R-Mich.)

Among the other measures affecting federal financial institution regulators to be marked up:

  • H.R. 3093, Investor Clarity and Bank Parity Act: The bill “corrects a statutory error” in the “Volcker Rule” contained in Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). “When the federal regulators adopted the Volcker Rule in December 2013, the final rule limited the ability of bank holding companies and their affiliates, which includes investment advisers, to sponsor hedge funds and private equity funds (also known as covered funds),” the committee memo states. “Consequently, a covered fund cannot use the name of a sponsor. The legislation eliminates this prohibition and amends the Volcker Rule to simply allow an investment adviser to share a similar name with a covered fund.”
  • H.R. 3221, Securing Access to Affordable Mortgages Act: Amends the Truth in Lending Act (TILA) and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) to exempt from property appraisal requirements a mortgage loan of $250,000 or less if it appears on the loan creditor’s balance sheet for at least three years. The measure also exempts mortgage lenders and others involved in real estate transactions from incurring penalties for failing to report appraiser misconduct.
  • H.R. 3299, Protecting Consumers Access to Credit Act of 2017: Amends the Federal Deposit Insurance Act to clarify that bank loans that are valid as to their maximum rate of interest in accordance with federal law when made will remain valid with respect to that rate regardless of whether a bank has subsequently sold or assigned the loan to a third party.
  • H.R. 3978, TRID Improvement Act of 2017: Amends the Real Estate Settlement Procedures Act of 1974 (RESPA), and the “Know Before You Owe” requirements under Truth in Lending-RESPA (TRID) to require the CFPB to allow for the calculation of the discounted rate title insurance companies may provide to consumers when they purchase a lenders and owners title insurance policy simultaneously.
  • H.R. 4270, Monetary Policy Transparency and Accountability Act of 2017: Amends the Federal Reserve Act to provide for the Federal Open Market Committee’s annual adoption of a monetary policy strategy and reference policy rules to facilitate accessible communication of how public data inform the conduct of monetary policy. “This legislation does not restrict either the Federal Reserve’s choice of or deviations from its strategy and reference rules,” the committee memo states.
  • H.R. 4278, Independence from Credit Policy Act of 2017: Provides for the Federal Reserve and the Treasury to engage in asset swaps, whereby the Treasury receives assets from the Federal Reserve that are neither gold nor Treasury securities, nor direct obligations of foreign central banks, or the International Monetary Fund, and in return the Federal Reserve receives Treasury securities of equivalent market value.
  • H.R. 4292, Financial Institution Living Will Improvements Act of 2017: Amends Title I of Dodd-Frank to reform the “living will” resolution plan submission process by restricting the Federal Reserve Board and FDIC from requiring bank holding companies to submit a “living will” resolution plan more than every two years. This bill requires the Fed and FDIC to provide feedback to a submitted resolution plan within six months after a bank holding company submits one, and requires the two agencies to publicly disclose the assessment framework used to review the adequacy of resolution plans.
  • H.R. 4293, Stress Test Improvement Act of 2017: Requires certain bank holding companies to conduct company-run stress tests once a year rather than semiannually. Also obliges the Federal Reserve to issue regulations subject to notice-and-comment for conducting stress tests that set forth economic conditions and methodologies, and to assess the effect of the agency’s stress-testing models and methodologies on financial stability, credit availability, model risks, and investment cycles. This bill also requires the Federal Reserve to issue regulations, subject to notice-and-comment, for its Comprehensive Capital Analysis and Review (CCAR) program, and: provides that the Fed may not subject a bank holding company to its CCAR program more than once every two years; prohibits the Federal Reserve from objecting to a bank holding company’s capital plan based on qualitative deficiencies, and; directs the Federal Reserve to establish procedures to respond to inquiries from bank holding companies subject to the CCAR program.
  • H.R. 4294, Prevention of Private Information Dissemination Act of 2017: Establishes criminal penalties for the unauthorized disclosure of living will and stress test determinations and other individually identifiable information by federal officials, specifically with respect to an officer or employee of a federal financial regulatory agency who willfully makes an unauthorized disclosure of certain individually identifiable information or a person who willfully requests or obtains such information under false pretenses.
  • H.R. 4296, To place requirements on operational risk capital requirements for banking organizations established by an appropriate federal banking agency: Prohibits the establishment of operational risk capital requirements for banking organizations unless they are sensitive to, and based on, an organization’s current activities, businesses or exposures; are determined by a forward-looking assessment of an organization’s potential losses and not based solely on its historic losses; and allow for adjustments based on qualifying operational risk mitigants.
  • (Bill number unassigned), Congressional Accountability for Emergency Lending Act of 2017: Amends the Federal Reserve Act and subjects the Federal Reserve’s Section 13(3) lending to Congressional approval, and provides for ready input to lending decisions from supervisory information about bank liquidity and solvency.

Committee Memorandum: HFSC Nov. 14 markup