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Washington Wrap: House takes aim at CFPB in financial spending bill

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Washington Wrap: House takes aim at CFPB in financial spending bill

Washington Wrap is a weeklylook at regulation, news and chatter from the Capitol. Send tips and ideas to moriah.costa@spglobal.com.

News:

The House passed a financial servicesand general government spending bill for fiscal year 2017 on Thursday,which includes changes to the bankruptcy code and the leadership structure of theConsumer Financial Protection Bureau.

The bill, passed 239-185, includes cutting $236 million of IRSfunding and $50 million from the SEC and would make the CFPB subject to the Congressionalappropriations process.

An amendment that was added to the bill and offered by Rep. ScottGarrett, R-N.J., would prevent the use of funds to designate nonbank firms as systemicallyimportant financial institutions. Other amendments that passed included one fromRep. Sean Duffy, R-Wis., that would prevent funds from being used to implement orenforce new regulatory actions ofmore than $100 million. Lawmakers also adopted an amendment by Rep.Peter Roskam, R, Ill., that is aimed at blocking Boeing'srecent deal to sell aircraft to Iran. It would prevent funds from being usedto authorize a transaction by a U.S. financial institution related to the exportor re-export of a commercial aircraft to Iran.

The bill now heads to the Senate. In June, the WhiteHouse said it would veto the legislation.

Rep. Maxine Waters, D-Calif., called the bill "a stab atthe heart of the Consumer Financial Protection Bureau." Amendments offeredby Democrats to remove provisions that change the CFPB's leadership and appropriationsprocess failed en bloc by 179-243. Another amendment that would have prevented languagethat would restrict the CFPB's ability to implement its proposed payday lendingrule also failed.


A Democratic Party platform draft released July 1 includes promises to fight "greed, recklessness,and illegal behavior on Wall Street" and make the financial sector "workfor the job-creating, productive economy."

The draft includes a proposal to require U.S. corporations topay taxes on foreign profits, reform credit scores, call for a mandatory nationalminimum wage of $15 per hour and allow the U.S. Postal Service to provide basicfinancial services such as check cashing.


Federal Reserve Governor Daniel Tarullo does not agree with someaspects of Hensarling's proposed Financial CHOICE Act that would roll back manyof the key provisions of the Dodd-Frank Act, he said at a Wall Street Journal/WSJPro event on Wednesday.

In particular, he said a proposed provision to give banks regulatoryrelief in exchange for holding 10% leveraged ratio would incentivize banks "tomove toward much riskier assets because their capital requirements wouldn't change,"the paper reported.

Chatter:

The Federal Reserve Board encountered a technical error on Wednesdayduring the media lock-up of the release of the June meeting minutes of the FederalOpen Market Committee, the agency reported.The error resulted in one media organization publishing embargoed information beforethe release time. Other media organizations had a delay in transmitting the information.


The cost of regulatory compliance is rising, a report from ThomsonReuters found. Compliance officers now spend 61% of their time completing avariety of tasks other than tracking regulation developments and reporting to theboard, the report states. An average of 200 international regulatory changes andannouncements were captured daily in 2015, the Thomson Reuters Regulatory Intelligenceservice calculated.

Legislation/Regulation:

The House passedthree financial services bills on Tuesday:

* H.R. 4854 would enhance angel investors' ability to providefunding to small businesses and entrepreneurs by raising the limit on the numberof individuals who can invest in venture capital funds before the funds must registerwith the SEC from 100 to 250.

* H.R. 4855 amends provisions in the securities laws to raisethe dollar amount limit on crowdfunding and changes Title III of the JOBS Act byraising the dollar amount a company can raise before it is subject to SEC reportingrequirements.

* H.R. 4538 helps identify and stop financial abuse of seniorcitizens by protecting certain employees of banks, credit unions, investment advisors,broker-dealers and insurance companies from civil and administrative liability aslong as employees received training on spotting and reporting financial abuse ofsenior citizens.

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