Removing Barriers Blog

Hensarling Reveals Draft Text of Financial Reform Package
Posted June 24, 2016 by Chandler Schuette

This week the House Financial Services Committee chairman Jeb Hensarling (R-Texas) made public draft legislative language and a more formal outline of his Financial CHOICE Act. The Hensarling proposal suggests numerous modifications to the Dodd-Frank Act. We are working on a more detailed analysis of the legislative text. Some of the provisions we know are included in the reform package are: 

  • Repealing the Durbin Amendment; 

  • Turning the CFPB into a 5-member commission and moving it under the appropriations process; 

  • Instructing financial regulators to account for entity size and risk when issuing rules (the TAILOR Act), and

  • Increasing the NCUA Board from three to five members.

Several other credit union-favorable pieces, including: 

  • The SeniorSafe Act, which would protect financial institutions from liability when reporting suspected financial elder abuse;  

  • Limitations to Operation Choke Point, which would prevent the federal government from limiting or terminating financial institutions’ relationships with certain customers unless certain criteria are met; and  

  • Financial Institution Examination Fairness and Reform Act, which would reform federal examinations of financial institutions to create an independent ombudsman and an independent examination appeals process.  

Some of the CUNA-supported provisions relating to housing issues include the:  

  • Mortgage Choice Act, which would adjust the definition of “points and fees” to ensure greater consumer choice in mortgage and settlement services under the Ability to Repay/Qualified Mortgage (QM) rule;  

  • Portfolio Lending and Mortgage Access Act, which would treat mortgages held in portfolio at credit unions and other mortgage lenders as qualified mortgages;  

  • Community Financial Institution Mortgage Relief Act, which exempts mortgages made by institutions under $10 billion in assets and held in portfolio for three years from RESPA’s escrow requirements and exempts mortgage servicers that service fewer than 20,000 mortgages annually from the requirements of Section 6 of RESPA;  

  • Homeowner Information Privacy Policy Act, which requires GAO to study whether additional Home Mortgage Disclosure Act (HMDA) data required to be collected and reported by CFPB could cause consumers harm; and  

  • The Home Mortgage Disclosure Adjustment Act, which increases the thresholds for small depository institutions from HMDA reporting requirements.  

    Finally, the Hensarling package contains reforms specific to credit unions, including extending the examination cycle to 18 months for well-capitalized, well-managed credit unions.  The proposal also gives consideration to many concerns credit unions have regarding examination fairness and frequency, the NCUA budget, and the costs and benefits of NCUA rulemakings.