Moving Forward Beyond the Economic Crisis: Innovative Proposals

1. Moving Forward Beyond the Economic Crisis: Innovative Proposals New Regulatory Policies

2. “History does not repeat itself, it rhymes”Mark Twain

3. The Dodd-Frank Wall Street Reform and Consumer Protection Act

5. Overview of HR Dodd-Frank Wall Street Reform and 4173: Consumer Protection ActSubtitle A Nonvoting members • Secretary of the Treasury, who shall serve as Chairperson of the Council • Chairman of the Board of Governors • Comptroller of the Currency • Director of the Bureau (CFPB) • Chairman of the Commission (SEC) • Chairperson of the Corporation (FDIC) • Chairperson of the Commodity Futures Trading Commission • Director of the Federal Housing Finance Agency • Chairman of the National Credit Union Administration Board, and • an independent member appointed by the President, having insurance expertise • Director of the Office of Financial Research • Director of the Federal Insurance Office • a State insurance commissioner • a State banking supervisor • a State securities commissioner  Voting members

8. Key Attributes of CFPB Act • Title X : Establishes CFPB as an independent entity - housed in the Federal Reserve • Scope of Coverage : An insured depository institution or credit union with total assets of more than $10B and any affiliate thereof and • A non-depository institution that: • offers origination, brokerage, or servicing of loans secured by real estate • is a larger participant of a market for other consumer financial products or services • offers or provides to a consumer any private education loan • offers or provides to a consumer a payday loan 

9. To be transferred between January 21, 2011 and July 21, 2011 • Board of Governors • Comptroller of the Currency • Office of Thrift Supervision • Federal Deposit Insurance Corp • Federal Trade Commission • National Credit Union Administration • Department of Housing and Urban Development  Transfer of functions

10. Inspector General Act of 1978 • Privacy Act of 1974 • Alternative Mortgage Transaction Parity Act of 1982 • Electronic Fund Transfer Act • Equal Credit Opportunity Act • Expedited Funds Availability Act • Fair Credit Billing Act • Fair Credit Reporting Act and the Fair 2003 • Accurate Credit Transactions Act of 2003 • Fair Debt Collection Practices • Federal Deposit Insurance Act • Federal Financial Institutions Examination Council Act of 1978 • Gramm-Leach-Bliley Act • Home Mortgage Disclosure Act • Homeowners Protection Act of 1998 • Home Ownership and Equity Protection Act of 1994 • Omnibus Appropriations Act of 2009 • Real Estate Settlement Procedures Act of 1974 • Interstate Land Sales Full Disclosures Act • Right to Financial Privacy Act of 1978 • Secure and Fair Enforcement for Mortgage Licensing Act of 2009 • Truth in Lending Act • Truth in Savings Act • Telemarketing and Consumer Fraud and Abuse Prevention Act • Paperwork Reduction Act • United States Code  Amended Acts

11. General Powers of BureauPurpose:  to ensure that all consumers have access to markets and that markets are fair, transparent, and competitive

12. Title XII – Improving Access to Mainstream Financial InstitutionsPurpose:  to encourage initiatives for financial products and services that are appropriate for the unbanked • Enable low-and moderate-income individuals to establish one or more accounts in a federally insured depository institution that are appropriate to meet the financial needs of such individuals and • To improve access to the provision of accounts, on reasonable terms for low-and moderate-income individuals, including small-dollar value loans 

13. Title XIV – Mortgage Reform and Anti-Predatory Lending Act • To take effect between July 21, 2012 and July 21, 2013 • Residential mortgage loan origination • Purpose is to assure that consumers are offered and receive residential mortgage loans on terms that reasonably reflect their ability to repay the loans and that are understandable and not unfair, deceptive or abusive. • Places restrictions on mortgage originators, how they conduct business, and how they are paid (bans ysp) • Establishes liability for violations

14. Subtitle B – Minimum Standards for Mortgages No creditor may make a residential mortgage loan unless the creditor makes a reasonable and good faith determination based on verified and documented information that, at the time the loan is consummated, the consumer has a reasonable ability to repay the loan, according to its terms, and all applicable taxes, insurance and assessments. Specifies the criteria for a qualified mortgage Doubled the amount of civil money penalties Mortgage contracts will be easier to read and understand

15. Subtitle C-High Cost Mortgages loans • Amends HOEPA and expands its coverage to home purchase loans • Repealed Prepayment Penalty Provisions • No Balloon Payments

16. Establishes Office of Housing Counseling Program emphasis in areas with a

17. GAPS • Intermediaries that remain Out of Scope • The CFPB cannot pass a policy on its own • Regulators-not regulations-were the major cause of the subprime meltdown • There continues to be too many regulators • Auto dealers and Insurance products are exempt

18. 6. No CRA rulemaking or supervisory authority • Much to be done to tentacles • FNMA and Freddie MAC • Rating agencies • Securitization market • Proprietary trading GAPS

19. Conclusion • Minimum standards for mortgages • Banned loans with predatory features • Eliminated yield spread premiums • Increased transparency • Streamlined mortgage documents • Established financial liability for mortgage originators • Downside – left in place a fractured regulatory regime