SEC Announces Annual Regulatory Agenda
On June 11, the Office of Information and Regulatory Affairs, a division within the Office of Management and Budget, released the Spring 2021 regulatory agenda identifying short- and long-term regulatory actions that administrative agencies plan to take. The report, which includes the Securities and Exchange Commission’s (SEC) rulemaking agenda, lists specific rulemaking areas including, among other matters:
- disclosure relating to climate risk and human capital, including workforce and corporate board diversity, and cybersecurity risk;
- investment fund rules, including money market funds, private funds and environmental, social and corporate governance (ESG) funds;
- proxy voting advice; and
- amendments to Rule 17a-7 under the Investment Company Act of 1940 concerning cross transactions.
The Spring 2021 regulatory agenda is not binding in any way on the SEC, and its predictive value has historically been modest.
CFPB Publishes Spring 2021 Rulemaking Agenda
On June 11, the CFPB published its Spring 2021 Agenda. According to the agenda, the CFPB intends to consider, propose or finalize rules addressing:
- the availability of electronic consumer financial account data and to prescribe regulations relating to property assessed clean energy (PACE) financing;
- financial institutions’ collecting, reporting, and making public certain information concerning credit applications made by women-owned, minority-owned and small businesses’;
- the implementation of amendments made to the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) concerning quality control standards for automated valuation models (AVMs) in appraisals;
- mortgage servicing early intervention and loss mitigation-related provisions in Regulation X to help ensure that borrowers impacted by the COVID-19 pandemic have an opportunity to be evaluated for loss mitigation before the initiation of foreclosure, with a final rule expected before the June 30th expiration of the federal foreclosure moratoria;
- extensions of the effective date by 60 days of two recent final rules issued to implement the Fair Debt Collection Practices Act (FDCPA) due to continued societal disruption from COVID-19;
- the anticipated expiration of the LIBOR index by June 2023 by providing examples of replacement indices that meet Regulation Z requirements, with a final rule expected in January 2022; and
- an assessment of a rule implementing the Home Mortgage Disclosure Act (HMDA), most of which became effective in January 2018 (the CFPB will no longer pursue two HMDA rulemakings from prior agendas concerning data points that lenders must report and the public disclosure of HMDA data).
The proposed agenda reflects the priorities of the CFPB’s interim leadership and may change in the Fall 2021 Unified Agenda, pending the appointment and confirmation of Rohit Chopra as permanent Director.
“To meet our mission of protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation, the SEC has a lot of regulatory work ahead of us.”
– SEC Chairman Gary Gensler
CFPB Issues Interpretive Rule Reaffirming Examination Authority Over the Military Lending Act
On June 16, the CFPB issued an interpretive rule reversing the Trump administration’s position that Congress did not specifically grant the CFPB examination authority with respect to the Military Lending Act (MLA). In resuming its examination of supervised entities for MLA compliance, the CFPB is likely to focus on issues related to the MLA’s maximum APR of 36% on many loans to military borrowers, and the prohibition on lenders from requiring military borrowers to arbitrate disputes, waive their rights under any state or federal law, use a military allotment to repay a loan, or pay a penalty if they pay back part or all of a loan earlier than the agreed-upon schedule.
FDIC Proposes Rule to Amend Real Estate Lending Standards
On June 15, the FDIC proposed a rule to amend the Interagency Guidelines for Real Estate Lending Policies to conform the method for calculating the ratio of loans in excess of the supervisory loan-to-value (LTV) limits with the capital framework established in the community bank leverage ratio (CBLR) rule. The proposed amendment would provide a consistent approach for calculating the ratio of loans in excess of the supervisory LTV limits at all FDIC-supervised institutions. Comments on the proposed rule will be accepted for 30 days after publication in the Federal Register.
FDIC Issues New Statement of Policy Regarding Minority Depository Institutions
On June 15, the FDIC approved an updated Statement of Policy Regarding Minority Depository Institutions. The updated Statement of Policy:
- clarifies the FDIC’s expectations for technical assistance and illustrates opportunities for engagement with various members of FDIC staff throughout the organization;
- highlights the FDIC’s outreach efforts including, but not limited to, the establishment of the MDI Subcommittee of the Advisory Committee on Community Banking and enhanced activities to promote collaboration with MDIs;
- defines terms used in the MDI Program, details reporting requirements, and specifies methods used to measure the effectiveness of the MDI Program activities; and
- details considerations made by examination staff when evaluating performance and assigning ratings.
In addition, after considering the comment letters, the FDIC revised the proposed Statement of Policy to identify, specifically, state bankers associations as collaboration partners, along with other trade associations that support MDIs in the development of education and training events and other initiatives for MDIs.
Gone Phishing? Wire Fraud Scams Continue Unabated Throughout 2021 So Far
By this point, most businesses that regularly send and receive funds electronically have heard about the risk of wire fraud scams in which an intruder changes wiring instructions and diverts funds to its own account, insidiously crafted to look like the proper account. But detecting these scams before they come to fruition — and doing something about them after they occur — has proven challenging. Read the client alert to learn more about how scams have continued to increase in sophistication and wreak havoc on business relationships, transactions, and deal closings, especially the case for private equity deals.
Equity Market Structure 2021 — A Mid-Year Review
On June 22, Goodwin partner Nick Losurdo will speak on a panel at SIFMA’s webinar series, which will consist of timely discussions about the recent market volatility in GME and other retail driven names, as well as touch on issues such as best execution, disclosure, short sales and payment for order flow. Register for this event today and learn more about the program and speaker line-up.
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