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Tuesday, May 23, 2017

Acosta: No Additional Delay for Fiduciary Rule

Labor Secretary Alexander Acosta announced that DoL will not delay the June 9 effective date for the fiduciary rule, which greatly expanded the definition of who counts as a “fiduciary” under the Employee Retirement Income Security Act and the Internal Revenue Code. Acosta wrote in a Wall Street Journal op-ed that the Administrative Procedures Act, which governs federal rulemaking, would not allow a further delay.

"We...have found no principled legal basis to change the June 9 date while we seek public input," he wrote. "Respect for the rule of law leads us to the conclusion that this date cannot be postponed." While the new definition takes effect June 9, additional conditions  such as specific disclosures and representations  are not required until Jan. 1, 2018.

DoL explained its position on “temporary enforcement policy” of phased implementation in a bulletin:
The department has repeatedly said that its general approach to implementation will be marked by an emphasis on assisting (rather than citing violations and imposing penalties on) plans, plan fiduciaries, financial institutions and others who are working diligently and in good faith to understand and come into compliance with the fiduciary duty rule and exemptions. Accordingly, during the phased implementation period ending on Jan. 1, 2018, the department will not pursue claims against fiduciaries who are working diligently and in good faith to comply with the fiduciary duty rule and exemptions, or treat those fiduciaries as being in violation of the fiduciary duty rule and exemptions.
Although Acosta declined to authorize a further delay, he said that DoL will continue its review of the final rule pursuant to an executive action by President Trump.
The Labor Department has concluded that it is necessary to seek additional public input on the entire fiduciary rule, and we will do so. Trust in Americans' ability to decide what is best for them and their families leads us to the conclusion that we should seek public comment on how to revise this rule.
ABA has strongly advocated for an additional delay and revisions to the rule to facilitate compliance and ensure it does not negatively affect the services available to bank customers. The association expressed disappointment that DoL decided to pursue implementation of a rule that it has said remains “fundamentally flawed and unworkable in critical areas.”

Read the op-ed (subscription required).
Read the enforcement policy bulletin.
Read FAQs on compliance.

Survey: Voters Favor Bipartisan Commission Structure for CFPB

A Morning Consult poll of voters in eight key battleground states found that a majority would support structural changes to the CFPB. Fifty-eight percent said they believe that the CFPB should be run by a bipartisan commission, while just 14% said that the bureau should maintain its current single directorship structure. The poll was commissioned jointly by the Consumer Bankers Association, the American Land Title Association and the Independent Community Bankers of America.

Three in five voters said that a commission structure would increase fairness, accountability, transparency and make the organization more representative. A majority also agreed that restructuring the bureau would help both consumers and small businesses. ABA has long supported a consumer protection agency led by a bipartisan, five-member commission to balance independence and accountability while broadening perspectives and promoting checks and balances.

View the survey results

Monday, May 22, 2017

Treasury Nominees to Receive Committee Vote This Week

The Senate Banking Committee is set to vote on the nominations of four senior officials at the Treasury Department and Commerce Department tomorrow. On Thursday, Treasury Secretary Steven Mnuchin will discuss tax reform before the Senate Finance Committee.

Donovan Withdraws as Treasury Deputy Nominee

Jim Donovan, President Trump’s nominee for deputy treasury secretary, will no longer take the job, according to recent news reports. Donovan is an executive at Goldman Sachs.

Friday, May 19, 2017

The Week Ahead: May 22 - 26

  • Implementation Date CFPB: Policy on Ex Parte Presentations in Rulemaking Proceedings
    Read more.
  • Comments Due CFPB: Request for Information Regarding Remittance Rule Assessment
    Read more.
  • Comments Due FHFA: Minority and Women Outreach Program
    Read more.
  • Comments Due CFPB: Technical Corrections and Clarifying Amendments to the Home Mortgage Disclosure (Regulation C) October 2015 Final Rule; Proposed Rule
    Read more.
All times in Eastern Standard Time. See future events on the  Dodd-Frank Calendar.

Mnuchin: Administration Seeking Growth through Tax Reform, Reg Relief

Testifying before the Senate Banking Committee, Treasury Secretary Steven Mnuchin said he is hoping to collaborate with senators on financial regulatory relief and housing finance reform. Mnuchin explained:
This committee has done extensive work on [housing finance reform] along with your work on community financial institution regulatory relief. I look forward to working with the Congress to develop a solution.
The Treasury Department will soon release its first report responding to President Trump’s executive order outlining principles for regulatory reform, which Mnuchin said will include “recommendations to provide relief for community banks and make regulations more efficient, effective and appropriately tailored.” He added that a likely recommendation would be an exemption from Dodd-Frank Act supervisory requirements for banks with less than $10 billion in assets.

Regarding the nation’s largest banks, Mnuchin noted that “I do not believe that any [bank] is ‘too big to fail,’” and signaled that the administration is not in favor of breaking up large banks or returning to the Glass-Steagall Act’s separation of commercial and investment banking. Such a return could create significant issues for financial markets, liquidity and the economy, he said.

The administration will also continue moving forward with its tax reform plan as it pursues economic growth, Mnuchin said, adding that he believes a goal of 3 percent GDP or higher economic growth is achievable. “It is our goal to bring meaningful relief to middle income Americans and make American businesses competitive again. We will do this all while simplifying the system.”

In addition to tax reform and reg relief efforts, the administration will also ramp up its efforts on housing finance reform in the second half of the year, Mnuchin said. He committed to working with lawmakers on both sides of the aisle to find a workable solution for Fannie Mae and Freddie Mac, create greater liquidity in the housing market and minimize taxpayer risk.