Effective dates for provisions in the newly enacted “Economic Growth, Regulatory Relief and Consumer Protection Act” (S.2155, signed into law by President Donald Trump last week, May 24) are varied and wide ranging, a review of the final version of the bill shows.
Many provisions took effect upon the president’s signing of the legislation. For example, a provision exempting “community banks” from the so-called Volcker Rule is effective now. Under the bill’s section 203, “Community Bank Relief,” banks with total assets of less than $10 billion, and trading assets and liabilities comprising not more than 5% of total assets, are not subject to the rule. (The rule, part of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, places limits on proprietary trading and hedge fund and private equity investments at banks.)
But other provisions have hard-wired effective dates, allowing for more time in most cases; here’s a sampling:
30 days from enactment date (June):
- Title II (Regulatory Relief And Protecting Consumer Access To Credit), sec. 208: applies the Expedited Funds Availability Act, which governs bank deposit holds, to American Samoa, the Commonwealth of the Northern Mariana Islands, and Guam.
- Title III (Protections For Veterans, Consumers, And Homeowners), sec. 304, “Restoration of the Protecting Tenants at Foreclosure Act of 2009”: permanently restores the Protecting Tenants at Foreclosure Act, which was repealed as a result of a sunset provision that took effect on Dec. 31, 2014.
60 days from enactment date (July):
- Title II (Regulatory Relief And Protecting Consumer Access To Credit), sec. 209, “Small Public Housing Agencies“: Streamlines certain requirements for small public housing agencies operating in rural areas, facilitates consolidated reporting by public housing agencies electing to operate in consortia, and facilitates the voluntary use of shared waiting lists by multiple public housing agencies.
120 days from enactment date (September):
- Title III (Protections For Veterans, Consumers, And Homeowners), sec. 301, “Protecting Consumers’ Credit”: Provides that credit bureaus will be required to include in the file of a consumer fraud alerts for at least a year under certain circumstances and provide a consumer unlimited free security freezes and removals of security freezes. When a security freeze is placed, the consumer will be notified of the right to opt out of personal information being sent to others for marketing purposes. The section preempts a patchwork of state laws to provide specific timelines for placing and removing security freezes, including a requirement that electronic or telephonic requests to remove a security freeze must be fulfilled within one hour of receiving the request. The section requires the Federal Trade Commission to set up a central webpage with links to the webpage at each credit bureau where a consumer may request a security freeze, a fraud alert, or opt out of personal information being sent to others for marketing purposes. The section also provides further protections for minors and individuals who are incapacitated.
180 days from enactment date (November):
- Title III (Protections For Veterans, Consumers, And Homeowners), sec. 310, “Credit Score Competition”: Requires Fannie Mae and Freddie Mac to each establish a process for validating and approving credit score models, and requires FHFA to establish standards and criteria for such processes.
- Title VI (Protections For Student Borrowers), sec. 601, “Protections in the Event of Death or Bankruptcy”: Prohibits private student lenders from declaring a defaultor accelerating a debt against a student borrower on the sole basis of bankruptcy or death of a co-signer; and releases co-signers of private student loans from their obligationsfollowing the death of a student borrower.
1 year from enactment date (May 2019):
- Title III (Protections For Veterans, Consumers, And Homeowners), sec. 302, “Protecting Veterans’ Credit”: Amends the Fair Credit Reporting Act to exclude from consumer report information: (1) certain medical debt incurred by a veteran if the hospital care or medical services relating to the debt predates the credit report by less than one year; and (2) a fully paid or settled veteran’s medical debt that had been characterized as delinquent, charged off, or in collection. It also establishes a dispute process for consumer reporting agencies with respect to such veterans’ medical debt, and requires the Department of Veterans Affairs to establish a database for purposes of verifying medical debt. This section provides free credit monitoring for active duty military consumers and requires the FTC to promulgate a rule setting forth what such credit monitoring shall entail.
- Title III (Protections For Veterans, Consumers, And Homeowners), sec. 306, “Family Self-Sufficiency Program”: Streamlines administration of the Department of Housing and Urban Development’s Family Self-Sufficiency Program (FSS) by allowing participating public housing authorities to combine their public housing and Housing Choice Voucher FSS accounts, broadening the services that can be provided to FSS participants, and extending the program to tenants who live in privately-owned properties backed by project-based rental assistance.
18 months from enactment date (November 2019):
- Title I (Improving Consumer Access To Mortgage Credit), sec. 106, “Eliminating Barriers to Jobs for Loan Originators”: Provides that an individual will be deemed to have temporary authority to act as a loan originator for 120 days under the S.A.F.E. Mortgage Licensing Act of 2008 if such person is: (1) a registered loan originator who becomes employed by a state-licensed mortgage company or (2) a state-licensed loan originator who becomes employed by a state-licensed mortgage company in a different state. It also extends civil liability protection to government officials who make good faith errors related to the collection, furnishing, or dissemination of information with respect to people registered with the Nationwide Mortgage Licensing System (NMLS) and Registry.
- Title IV (Tailoring Regulations For Certain Bank Holding Companies), sec. 401, “Enhanced Supervision And Prudential Standards For Certain Bank Holding Companies”: Raises the threshold for applying enhanced prudential standards from $50 billion to $250 billion. (NOTE: Bank holding companies with total consolidated assets between $50 billion and $100 billion will be exempt from enhanced prudential standards immediately). Bank holding companies with total consolidated assets between $100 billion and $250 billion will be exempt 18 months after the date of enactment. For bank holding companies with total consolidated assets between $100 billion and $250 billion, the Federal Reserve will (1) have the authority to apply enhanced prudential standards after the effective date, (2) be required to conduct a periodic supervisory stress test after the effective date, and (3) have the authority to exempt firms from enhanced prudential standards prior to the effective date. This section also raises the threshold for company run stress tests from $50 billion to $250 billion and requires the tests be conducted periodically.
- Title IV (Tailoring Regulations For Certain Bank Holding Companies), sec. 401 (continued), “Supervisory Stress Test”: The Federal Reserve, on a periodic basis, shall conduct supervisory stress tests of bank holding companies with total consolidated assets equal to or greater than $100 billion and total consolidated assets of less than $250 billion to evaluate whether such bank holding companies have the capital, on a total consolidated basis, necessary to absorb losses as a result of adverse economic conditions.