Washington Report 360 | January 18, 2019
Washington Report 360 | January 18, 2019
Insight

Washington Report 360 | January 18, 2019

In this issue....

Key Highlights

  • The U.K. Parliament voted against the proposed Brexit deal; failure to reach an agreement could result in a “disorderly” transition with “immediate and significant spillover effects” into the U.S.
  • The new Chair of the House Financial Services Committee, outlined the Committee’s focus on consumer protection, diversity and inclusion, and oversight of the federal financial regulators.
  • Federal and State financial regulators encourage financial institutions to assist consumers impacted by the government shutdown with financial hardships.

Financial services legislative and regulatory news

The House Financial Services Committee Chair outlined the Committee’s priorities in the 116th Congress, including:

  • Increasing the focus on consumer protections, including affordable housing, credit reporting, and the role of the CFPB, in addition to diversity and inclusion, and oversight of federal financial regulators.
  • Introducing bipartisan legislation for long-term reauthorization of the National Flood Insurance Program and Terrorism Risk Insurance, as well as transparent standards for corporate insiders.

The Basel Committee’s oversight body has endorsed revisions to the market risk framework that will take effect January 1, 2022; the group also endorsed the Basel Committee’s 2019 strategic priorities and work programs to evaluate post-crisis reforms.

The Supreme Court refused to take up a case challenging the constitutionality of the CFPB; a U.S. Court of Appeals affirmed the CFPB’s constitutionality in June 2018. (The Hill, Reuters)

Financial services policy news

The U.K. Parliament voted down a proposed Brexit deal, casting uncertainty around the U.K.’s departure from the EU on March 29; the FSOC has stated “a no-deal Brexit could have immediate and significant spillover effects” into the US, including financial contracts, central counterparties, and international trade. The CFTC Chairman recently said “the uncertainty has the potential to create instability in the global derivatives market.”

Five federal financial regulators and the Conference of State Bank Regulators jointly released a statement encouraging financial institutions to consider “prudent” efforts to modify terms on existing loans or extend new credit to assist consumers affected by the federal government shutdown. News report suggest the shutdown is impacting economic growth. (New York Times, CNN)

The IRS reopened its income verification express service and some fee-based services to help taxpayers receive critical services, including loans.

The Federal Reserve published the inaugural issue of an article series entitled Consumer & Community Context; the current issue features the impact of student loan debt on location and homeownership.

The CFPB published detailed reports assessing the effectiveness of the:

  • Ability-to-Repay and Qualified Mortgage Rule, finding low- or no documentation loans have virtually disappeared and that loan origination costs and prices have not “materially” increased.
  • RESPA Servicing Rule, finding that loans were now less likely to proceed to foreclosure and servicing costs have increased “substantially.”