There wasn’t much mention of the interpretation and enforcement of the Real Estate Settlement Procedures Act during oral arguments this week before the U.S. Court of Appeals for the District of Columbia Circuit in PHH Corp. v. Consumer Financial Protection Bureau. Instead, nearly all of the discussion revolved around constitutional questions. The biggest issue was about just how much power to “faithfully execute” the laws of United States the president is left with if the only way to remove the head of a single-director agency is “for cause.” The other constitutional issues that garnered some attention were...

House Financial Services Committee Chairman Jeb Hensarling, R-TX, author of H.R. 10, the Financial CHOICE Act, this week expressed uncertainty about how much of his controversial alternative to the Dodd-Frank Act might be able to garner bipartisan support in the Senate. But he said he is hopeful and willing to negotiate anything, while articulating faith in a strategy that pushes both a “short game” and a “long game” when it comes to making the major changes he envisions. During a public policy discussion at the American Enterprise Institute, a conservative think tank in Washington, DC, Hensarling suggested that Democrats haven’t stepped up to the plate to help smaller banks. “I hear my friends on the other side of the aisle say nice things about wanting to do regulatory relief for community financial institutions,” the congressman replied. “But I just never see the legislation. I don’t quite see the follow-through. “I haven’t given up...

CFPB Director Richard Cordray, in an unusual move, attended the weekly caucus meeting of the Democrats in the House of Representatives last week. That prompted his chief GOP antagonist, House Financial Services Committee Chairman Jeb Hensarling of Texas, to say Cordray’s appearance shows that Democrats use the CFPB as a political war machine. “Everyone knows Mr. Cordray will likely leave the CFPB soon and pursue political office in Ohio again, but his attendance at what amounts to nothing more than a Democrat pep rally shows just how partisan and politicized he and his supposed ‘independent’ agency truly are,” the Republican said. According to Hensarling, liberal elites in Washington, DC, want to keep the bureau unaccountable to the American people so ...

The Congressional Budget Office last week issued a detailed analysis of the fiscal aspects of H.R. 10, the Financial CHOICE Act, estimating the legislation would reduce federal deficits by $24.1 billion over the 2017-2027 timeframe. “Direct spending would be reduced by $30.1 billion, and revenues would be reduced by $5.9 billion,” the budget office said. Most of the budgetary savings would come from eliminating what’s known as the Orderly Liquidation Fund and from changing how the CFPB is funded. The budget office also estimates that, over the 2017-2027 period, and “assuming appropriation of the necessary amounts,” implementing the bill would cost $1.8 billion. The CHOICE Act was introduced earlier this year by House Financial Services Committee Chairman Jeb Hensarling, R-TX, ...

As a vote by the full House of Representatives nears on H.R. 10, the Financial CHOICE Act, dozens of law professors from around the country wrote congressional leadership to oppose provisions of the bill that would gut the CFPB. In their letter, the legal academics took particular issue with Title VII of the legislation, which would subject the CFPB to the regular congressional appropriations process and eliminate the bureau’s rulemaking, supervisory and enforcement authority (including that over unfair, deceptive or abusive acts or practices, or UDAAP). “Title VII of H.R. 10 seeks to kill the CFPB by a thousand cuts,” the professors said. “Historically, Congress has accorded all federal bank regulators independence to insulate their decisions from industry and political ...

The Financial Services Roundtable advised the Trump administration that the structure of the CFPB needs to be changed, and that the agency should revise a handful of its key mortgage rulemakings, most notably the ability-to-repay/qualified mortgage rule, the Home Mortgage Disclosure Act rule and the Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure rule, or TRID. The FSR’s call came in a detailed response to President Trump’s Executive Order 13777, “Reducing Regulation and Controlling Regulatory Costs,” issued earlier this year, directing the Treasury Department to conduct an assessment of financial regulations to evaluate how they align with the White House’s core principles of financial regulation.In terms of the bureau itself, the industry organization said the governance structure ...

Treasury Eyeballing CFPB Rules as Part of Regulatory Relief Review. The Treasury Department is focused on a wide range of regulatory requirements where simple communication and clarification of the regulatory intent is warranted, such as the CFPB’s ability-to-repay rule, the integrated disclosure rule and the Home Mortgage Disclosure Act rule, Craig Phillips, counselor to the Treasury secretary, said during a symposium in New York City last week, according to Inside Mortgage Finance.... Dodd-Frank Changes to be Discussed. House Financial Services Committee Chairman Jeb Hensarling, R-TX, is scheduled to discuss his Dodd-Frank Act alternative, H.R. 10, the Financial CHOICE Act, Tuesday of this week at an event at the American Enterprise Institute....

President Trump’s tax plan would raise the federal debt, but could benefit residential MBS, consumer ABS and asset-backed commercial paper, depending mostly on the effect on the underlying obligors’ after-tax income, according to a recent research report from Moody’s Investors Service. “The administration’s blueprint proposes a reduction in the corporate tax rate to 15 percent from 35 percent, which would also apply to partnerships and other ‘pass-through’ businesses that are currently taxed through their principals’ individual returns,” analysts explained. The White House plan also features...

For the most part, several different factions of the mortgage industry have applauded the move by the Federal Housing Finance Agency to allow Fannie Mae and Freddie Mac to build some type of capital buffer. Now comes the hard part: the details. Early this week, FHFA Acting Deputy Director of the Division of Conservatorship Bob Ryan said in a speech that the capital buffer plan would entail a delay of dividend payments to the U.S. Treasury Department – not an elimination of them. No other specifics were provided...

Craig Phillips, counselor to the Treasury secretary, recently spoke about the importance of credit-risk transfers, the role of private capital in the mortgage market and burdensome regulations. During a credit-risk transfer symposium in New York City earlier this week, he said it’s important to grow participation in the government-sponsored enterprises’ CRT programs. “Every dollar of risk today is a dollar less of taxpayer risk,” said Phillips. “In my view we should continue...