IBA E-News 12-14-18
STATE GOVERNMENT RELATIONS
IBA Legislative Briefing and Reception
Save the date for the 2019 IBA Legislative Briefing and Reception, scheduled for Feb. 4. As the first IBA grassroots advocacy event of the new year, this is a prime opportunity to get your bank involved in 2019. The briefing, conducted by the IBA Government Relations Team, will include an in-depth discussion of current legislative issues.
New this year, we have added to the agenda an informative and entertaining discussion on Indiana politics with WFYI’s Indiana Week in Review team. Host Brandon Smith will cover the issues facing Indiana related to politics and policy, with insightful viewpoints from panelists Mike O’Brien, Ann DeLaney, Jon Schwantes and Niki Kelly. More information forthcoming.
FEDERAL GOVERNMENT RELATIONS
On Wednesday the Senate voted 87-13 to pass the final version of the farm bill following the release of the conference report, and the House quickly followed suit in a vote of 369-47 on Thursday. The Agriculture and Nutrition Act of 2018 (H.R. 2) will now be sent to President Trump to be signed into law. The IBA recently signed on to a national letter supporting the bill's passage by Congress.
The bill includes important commodity price protections that will provide greater business-planning certainty to producers and community banks over the next five years. It would maintain a strong crop insurance program, increase USDA guaranteed farm loan limits to $1.75 million, and provide for the possible increase in guaranteed USDA rural development loans.
Data Security, Privacy to Be Early Focus of CFPB’s Kraninger
Newly sworn-in Consumer Financial Protection Bureau Director Kathy Kraninger will focus on data security and privacy in her early days in office, she said at a press briefing on her first day at the bureau Tuesday. The bureau collects a significant amount of consumer data in the form of surveys, consumer complaints and expanded Home Mortgage Disclosure Act data reporting.
“Data security and data privacy [are] going to be a big focal point in terms of what the bureau collects, how it’s used, how long it’s stored,” Kraninger said. “We absolutely will put consumers first in the decisions I make.”
She added that she will use the agency’s strong enforcement powers as needed, but that a previous CFPB practice sometimes called “regulation by enforcement” is “certainly pushing the envelope. I think there is a responsibility here to make sure the law is clearly articulated in the regulations. People want to comply . . . the bureau should be providing them the information they need to comply.”
Asked about predecessor Mick Mulvaney’s initiative to rebrand the agency as the Bureau of Consumer Financial Protection, or BCFP, in line with its authorizing statute, Kraninger noted that the name change remains only “partially done” and that she has not made a final decision on completing it.
As Congress works to pass a longer-term spending bill, President Trump last Friday signed a two-week extension of government funding that also extends temporary authorization of the National Flood Insurance Program. Government spending authority and NFIP authorization now expire on Dec. 21.
Basel Issues Final Set of Pillar 3 Disclosure Requirements
The Basel Committee on Banking Supervision on Tuesday issued updated Pillar 3 disclosure requirements reflecting the “Basel IV” capital framework released in December 2017. The updates, along with revisions issued in 2015 and 2017, “complete the Pillar 3 framework,” according to the committee.
The revised requirements -- which generally apply only to U.S. banking firms with more than $250 billion in assets -- address topics raised in the Basel IV framework, including credit risk, operational risk, the leverage ratio, credit valuation adjustment risk, and prudential metrics. They also lay out new disclosure expectations on asset encumbrance and -- when required by national-level regulators -- capital distribution constraints. In addition, the CVA disclosure requirements “have been substantially streamlined” from what was originally proposed due to public feedback, including from industry advocates.
The target for national regulators to implement the Basel IV-related disclosure requirements is Jan. 1, 2022; meanwhile, the deadline for regulators to implement requirements on asset encumbrance, capital distribution constraints and the prudential treatment of problem assets was extended to the end of 2020.
CFPB Proposes Updates to ‘No-Action Letter’ Policy
The Consumer Financial Protection Bureau is proposing changes to its so-called no-action letter policy and proposing to establish a regulatory sandbox that would encourage banks to test new, innovative financial products. The revised policy would seek to improve the no-action letter process by eliminating several redundant or burdensome elements, streamlining the CFPB’s processing and review of the applications and expanding the types of relief available, among other things.
In addition, through the proposed “product sandbox,” banks could receive similar no-action relief, along with two additional forms of relief: “approval relief,” which expressly states that acts taken or omitted in conformity with the approval fall within a statutory “safe harbor” from liability, or “exemptive relief,” an exemption from a statutory or regulatory provision. The CFPB added that under the “sandbox” concept, it expects relief to be provided for a limited amount of time -- in most cases, two years. Comments on the proposal are due 60 days after it is published in the Federal Register.
CFPB Releases Beta Version of HMDA Platform for 2018 Data
The Consumer Financial Protection Bureau has launched the beta version of its Home Mortgage Disclosure Act platform for data collected in 2018. The beta release allows banks an opportunity to familiarize themselves with the platform and ensure their sample LAR data complies with reporting requirements. Banks may test and retest their data files as often as desired during the beta period.