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Friday, August 18, 2017

This Week Ahead: August 21-25

  • Comment Due SEC: Covered Securities Pursuant to Section 18 of the Securities Act of 1933
    Read more.
  • Comments Due CFTC: Conflicts of Interest Policies and Procedures by Swap Dealers and Major Swap Participants (PRA)
    Read more.
  • Comments Due CFTC: Revisions to Freedom of Information Act Regulations
    Read more.
  • Comments Due FHFA: Minority and Women Inclusion Amendments 
    Read more.
  • Comments Due OCC: Agency Information Collection Activities: Information Collection Revision; Submission for OMB Review; Uniform Interagency Transfer Agent Registration and Deregistration Forms 
    Read more.
  • Comments Due FDIC: Agency Information Collection Activities: Submission for OMB Review
    Read more.
All times in Eastern Standard Time. See future events on the Dodd-Frank Calendar.

Justice Department Formally Ends ‘Operation Choke Point’

In a letter to House Judiciary Committee Chairman Bob Goodlatte (R-Va.), a Department of Justice official formally confirmed that the agency has ended the controversial Operation Choke Point initiative, which under the Obama administration sought to curtail legal but politically disfavored businesses by working through bank regulators to pressure financial institutions to end customer relationships with those businesses. Assistant Attorney General Stephen Boyd expanded on DOJ's change.
All of the Department’s bank investigations conducted as part of Operation Choke Point are now over, the initiative is no longer in effect, and it will not be undertaken again. The Department will not discourage the provision of financial services to lawful industries, including businesses engaged in short-term lending and firearms-related activities.
ABA has long opposed Choke Point, successfully urging the FDIC to end its participation in the initiative and supporting legislation to prevent similar activities in the future. However, many financial institutions had been concerned about serving Choke Point-targeted businesses without a clear statement from DOJ that the initiative has been dropped. 

Read the letter.

HARP Extended through 2018 as Changes Made to High-LTV Refi Program

The Federal Housing Finance Agency extended the Home Affordable Refinance Program through Dec. 31, 2018. The program was scheduled to phase out in September upon the launch of Fannie Mae and Freddie Mac’s new streamlined refinance program for borrowers with high loan-to-value ratios.

However, the agency announced that the new high LTV refi program would only be available for borrowers who originate their loans on or after Oct. 1, 2017; as a result, FHFA determined that HARP remained necessary to serve eligible existing borrowers. More than 143,000 homeowners may still be able to benefit from HARP, the agency added. Since its inception in 2009, more than 3.47 million refinances have been done through HARP.

The eligibility date for the new high LTV refi program was necessary to support the GSEs’ credit risk transfer programs, which since March have seen $54.2 billion worth of risk transferred. Fannie and Freddie will modify future credit risk transfers to accommodate the new streamlined refi program.

Meanwhile, FHFA announced that nearly 357,000 refinances of Fannie or Freddie loans were completed in the second quarter, with 9,700 of them coming through HARP. HARP refinances dropped by one third since the prior quarter. Fourteen percent of second-quarter loans refinanced through HARP had a loan-to-value ratio greater than 105 percent. In Nevada and Florida, HARP refinances this year accounted for at least 6 or more percent of total refinances, double the national average of 3 percent. 

Read more.
Read the refinance report

ABA to FCC: Follow Congressional Intent in TCPA Applicability Ruling

In a comment letter to the Federal Communications Commission, ABA urged the FCC not to limit the use of newer calling and fax technologies that are beyond the scope of the Telephone Consumer Protection Act. The letter responds to a petition that raised the important issue of whether the FCC should interpret the TCPA to apply to technologies that were not in existence or common use when the TCPA was enacted in 1991. Under its prior leadership, the FCC interpreted the TCPA expansively to apply to such newer technologies not contemplated by Congress; the agency is expected to revisit those interpretations in the near future.

Because of the uncertainty over the TCPA’s applicability to newer technologies and the availability of significant statutory damages, “any company that seeks to use an advanced technology not contemplated by the TCPA’s drafters may be subjected to a class action lawsuit with a damage claim in the millions, if not billions, of dollars, with a high settlement value unrelated to actual culpability,” ABA noted. “The risk of draconian litigation costs has led financial institutions to limit 
 and, in certain instances, to eliminate  many pro-consumer communications.” 

Read the letter

Thursday, August 17, 2017

CFPB Launches New Web Form for Regulatory Inquiries

The CFPB announced its launch of a new web form to replace the email address (CFPB_RegInquiries that industry and other stakeholders were using to submit their questions on Bureau regulations. The form can be found on their website at

Wednesday, August 16, 2017

ABA Supports Changes to CFPB's Prepaid Card Rule

ABA provided feedback on the CFPB’s proposed changes to its final rule on prepaid products. The proposal includes several revisions to error resolution requirements and limited liability provisions of the prepaid rule, which is set to take effect on April 1, 2018.

ABA generally supported the changes and recommended that the CFPB delete certain cards from its definition of “prepaid accounts,” such as jury duty cards that have no fees, cannot be registered and are not marketed to the general public. ABA also recommended that the bureau delete certain language that would require credit card companies to treat prepaid accounts offered by a related company as credit cards for purposes of merchant disputes and error resolution. Finally, the association noted that the April 2018 compliance deadline may no longer be sufficient, and urged the bureau to extend the deadline to Oct. 1, 2018. 

Read the letter.