(May 21, 2021) Congratulations to the Ohio Department of Commerce/Division of Financial Institutions to be the first state supervisory authority to become accredited under all four accreditation programs: credit union (via the NASCUS Accreditation Program), bank (via CSBS), mortgage and money service business (MSB, also both via CSBS) … The OCC announced this week that it will reconsider last year’s revisions to its rules implementing the Community Reinvestment Act (CRA) and, in the meantime, suspend information collection under the new rule, which was adopted a little more than a year ago … CFPB issued updated TRID FAQs late last week, aimed at addressing housing assistance loans, including how the 2018 BUILD Act affects requirements for such loans. (BUILD stands for Better Utilization of Investments Leading to Development Act, legislation passed in 2018; it allows the participation of private sector capital and skills in the economic development of countries with low- or lower-middle-income economies to complement U.S. assistance and foreign policy objectives).
LINKS:
OCC Bulletin 2021-24
(May 14, 2021) The OCC has – once again – a new leader, who said this week he would soon conduct a review of “regulatory standards” at the agency.
Michael J. Hsu was named acting comptroller of the currency late last week by Treasury Secretary Janet Yellen, who has the power to designate an acting leader of the agency until one is confirmed by the Senate. The Biden Administration has not yet nominated anyone for a full, five-year term as comptroller.
Hsu, a former Federal Reserve regulator who oversaw supervision of “global systemically important banks” (G-SIBs), becomes the fifth leader of the national bank regulator since 2017 – and the fourth “acting comptroller” over that time span. He succeeded Blake Paulson, who had been serving in an acting capacity since January (Paulson has resumed his former post of chief operating officer of the agency).
In a statement to OCC staffers on his first day on the job (Monday, May 10), Hsu said he will be announcing a “review of key regulatory standards, as well as various matters that are pending before the agency,” with the review, he said, considering a full range of views inside and outside of the agency.
Meanwhile, also this week, the Senate voted to repeal the so-called “true lender” rule, an action taken by one of Hsu’s recent “acting comptroller” predecessors. The House is expected to vote soon; President Joe Biden (D) has said he would sign the repeal measure.
Adopted by the OCC in October (and which took effect Dec. 29) by then-Acting Comptroller Brian P. Brooks (after being initially proposed in July), the rule determines when a bank is a “true lender” within the context of a partnership between it and a third party. According to the OCC, the rule specifies that a bank makes a loan and is the true lender if, as of the date of origination, it: first, is named as the lender in the loan agreement, or; second, funds the loan.
Consumer groups and others (including CSBS) have criticized the rule, saying it amounts to an “end-run” around state laws meant to prohibit predatory lending practices, such as leaving customers vulnerable to “rent-a-bank” schemes, in which an agreement is made between a bank and a third party to advance the loan – but then the bank takes over the loan once the transaction is completed.
LINKS:
Michael J. Hsu Statement to Agency Employees on Becoming Acting Comptroller of the Currency
CSBS statement on Senate passage of the CRA joint resolution to strike down OCC true lender rule
(Jan. 22, 2021) President Biden has reportedly determined that Michael S. Barr – a former assistant Treasury secretary for financial institutions (a position that interfaces with credit unions and banks) – will be the next comptroller of the currency. If confirmed, Barr, 56, would serve a five-year term … In other OCC developments, the agency last week issued a national digital bank charter, one of the last acts of outgoing Acting Comptroller Brian P. Brooks. The national trust bank charter for Anchorage Digital Bank of Sioux Falls, S.D., would allow it to continue the custody services it offered as a state bank primarily to institutional investors that transact in digital assets and cryptocurrencies, including but not limited to certain tokenized securities and cryptocurrencies (including Bitcoin and others).
LINK:
OCC Conditionally Approves Conversion of Anchorage Digital Bank
(Jan. 15, 2021) Florida (and NASCUS) welcome a new state-chartered credit union this week: Radiant CU of Gainesville (formerly SunState FCU). The 64-year-old credit union holds $570 million in assets and counts about 40,000 members … Melissa M. Lowden will be NCUA’s next deputy chief financial officer, effective Jan. 17, the agency said this week. In a release, the agency said Lowden – who joined NCUA in 2015 – will oversee accounting and financial reporting, enterprise risk management, strategic and performance planning, budgeting, procurement, facilities and logistical support, the administration of credit union operating fees, and the National Credit Union Share Insurance Fund’s (NCUSIF) capitalization deposits and investments … Brian Brooks, the acting comptroller of the currency, on Thursday resigned from the agency; Blake Paulson, formerly senior deputy comptroller and chief operating officer at the Office of the Comptroller of the Currency (OCC) was named his successor in accordance with federal statute.
LINK:
Lowden Named Deputy Chief Financial Officer
(Nov. 20, 2020) Two federal banking agencies saw action for their leadership futures this week, as a nominee for one barely failed to be confirmed to the position and another was nominated for a permanent position.
However, further progress for the two candidates – at the Federal Reserve and OCC, respectively — seems doubtful at this stage.
Meanwhile, the Senate could consider the nomination of Kyle S. Hauptman for the NCUA Board as early as the week following Thanksgiving.
On the Federal Reserve nomination: The Senate failed to confirm nominee Judy Shelton on a vote of 47-50, which was marked by bipartisan opposition to her confirmation. Shelton has proved to be a controversial candidate to sit on the central bank board: in the past, she has drawn controversy and some criticism for her expressed views about reinstituting the gold standard, questioning the effectiveness of federal deposit insurance, and the Fed’s independence from political influence.
Republican senators had vowed to consider her confirmation again (which was hobbled the first time by three senators outright expressing or voting in opposition to her, and others not available to vote after quarantining for Covid-19 exposure or infection). However, the Senate recessed Wednesday evening for the Thanksgiving holiday and won’t return until the afternoon of Nov. 30 (the Monday after Thanksgiving). That timing places Shelton’s confirmation in further doubt – on that day, the Democrats gain an additional member, Senator-elect Mark Kelly (Ariz.), who won a special election over incumbent Martha McSally (R ) Nov. 3. All Democrats have vowed to oppose Shelton’s confirmation.
On top of that, time is running short for the Senate to consider her nomination again in the coming weeks, as the current Congress winds down (and the Christmas and New Year holiday breaks loom). The new Congress will take its seats Jan. 3.
Also this week, President Donald Trump nominated Acting Comptroller of the Currency Brian P. Brooks to take the job (that is, remove the “acting” from his title) for a five-year term. Brooks was appointed to his current position by Treasury Secretary Stephen Mnuchin; he was not been confirmed by the Senate.
But the outlook for Brooks’ confirmation is similar to Shelton’s, with an added twist: In addition to growing Democratic opposition, and a dwindling calendar, Brooks will be subject to a Senate Banking Committee hearing on his nomination before he can be considered by the full Senate. Ranking Member Sherrod Brown (Ohio) has already questioned Brooks’ qualifications for the comptroller’s job; Brooks has held the acting title only since late May, and joined the OCC in April.
Nevertheless, press reports indicated late this week that Senate Banking Committee Chairman Mike Crapo (R-Idaho) intends to hold a hearing on the Brooks nomination. Further, reports also indicated that the Senate is also preparing to take up the confirmation of another (less controversial) Federal Reserve Board nominee, Christopher Waller, before Congress ends.
Meanwhile, late this week (after the Senate had already recessed for the holiday), the Senate leader published his Executive Calendar for Monday, Nov. 30 – which includes consideration of cutting off debate on the nomination of Kyle S. Hauptman to take a seat on the NCUA Board. President Trump tapped Hauptman in June to take the seat now held by Board Member Mark McWatters. He has been serving in a holdover capacity since his term expired in August, 2019.