Regulatory reform

With policymakers focused on ending Fannie Mae and Freddie Mac’s conservatorship, their regulator is reorganizing key units and adding staff to position itself for the long term.

The regulator said the investment bank and financial services company will help in the process of strengthening Fannie Mae and Freddie Mac’s capital standing for their eventual exit from conservatorship.

Now that the Consumer Financial Protection Bureau says it will scrap an unpopular standard for so-called qualified mortgages, the big question is what will take its place.

In another rollback of the bank trading ban, the federal agencies unveiled a plan to allow financial institutions to invest in multiple companies through certain fund structures.

In the past, the agency cited the legal term in enforcement actions without stating what it meant, but Director Kathy Kraninger has sought to give the industry clearer guidance.

Regulators already finalized a rollback of the proprietary trading ban section of the rule but signaled then that their overhaul was not finished.

The agency is sending a strong message that it won’t rush to end an exemption for Fannie Mae and Freddie Mac while also signaling longer-term changes that will affect all lenders.

Director Kathy Kraninger has told lawmakers that the agency will delay the expiration of the so-called QM patch, now set for January 2021.

In another sign of state officials trying to outdo the Consumer Financial Protection Bureau, governors in California and New York want greater authority to license and oversee the debt collection industry.

Despite changes by the Federal Housing Administration, bankers remain reluctant to join the program for fear of legal liability. But that could change if it revamps servicing processes, experts say.

Todd Zywicki, a law professor who has sharply criticized the CFPB as an unaccountable bureaucracy, has been named chair of an agency task force identifying potential conflicts and inconsistencies in consumer finance law.

Federal Housing Finance Agency Director Mark Calabria discussed the possibility of having Fannie Mae and Freddie Mac operate under a consent order to allow the government-sponsored enterprises to be able to raise capital.

The Department of Housing and Urban Development has proposed an overhaul of an Obama-era rule meant to guide local jurisdictions in how they comply with the Fair Housing Act.

The FHFA’s attempt to move some of its balance sheet into the private sector could leave investors with greater liabilities than they were initially told.

A risk-based capital rule for Fannie Mae and Freddie Mac is expected to top the agenda in 2020 as the companies’ regulator executes plans for their release into the private sector.

The Consumer Financial Protection Bureau faces a busy policy agenda heading into the new year, as well as strong external forces that are beyond its control.

The lawmakers say they need more information about the administration’s plans in order to conduct proper oversight.

Despite assurances by Director Kathy Kraninger that the agency is cracking down on discrimination, it hasn't sent a Department of Justice referral on a fair-lending violation in two years.

The two Democratic senators said the bureau's policy could allow companies to circumvent consumer finance laws.

The agency announced changes meant to reduce compliance costs and allow some institutions to provide estimates rather than disclose exact prices for international money transfers.