OVERNIGHT REGULATION: Consumer bureau turns three

Another Monday is out of the way. But before you call it a workday, catch up on the latest regulatory and enforcement headlines here at OVERNIGHT REGULATION, where you’ll always find the day’s biggest news coming out of agencies, the courts and Congress – as well as a preview of tomorrow’s emerging storylines. Click here to sign up for the newsletter: http://bit.ly/1pc6tau

Now, let’s talk about regs.

 

THE BIG STORY

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HAPPY BIRTHDAY, CFPB: Much attention has (rightfully) been paid to the fourth anniversary of the Dodd-Frank Wall Street reform bill. The milestone has renewed debate over whether the landmark statute went too far to hamstring the financial industry – or not far enough to rein it in.

But somewhat lost in the debate is Dodd-Frank’s offspring, the Consumer Financial Protection Bureau, which opened its doors three years ago today. The agency has been a lightening rod for GOP criticism, with conservatives frequently describing the agency as the “most powerful” and “least accountable” of all federal agencies.

The agency’s critics take exception to its leadership structure (it’s headed by a single director nominated by the president, rather than a bipartisan commission like the Securities and Exchange Commission or the Commodity Futures Trading Commission). They also hold disdain for its funding structure: the agency is not subject to congressional appropriations.

But it is the CFPB’s aggressive push on an array of regulations that has most roiled the financial sector and its allies in Congress.

The CFPB’s track record to date:

-- Consumer Complaints:  Under Director Richard Cordray, the agency has collected hundreds of thousands of consumer complaints lodged against financial companies and their products. The negative feedback, compiled on a publically searchable database, is used to help guide the agency’s rulemaking agenda. Last week, the agency announced, to the dismay of industry, plans to make more detailed information about consumers’ negative experiences, available for all to see. On Monday, they expanded the effort to include prepaid gift cards and related products. 

-- Mortgage Rules: In January, the agency’s sweeping new mortgage regulations took effect, imposing new restrictions for “qualified mortgage” loans. The rules, the government’s response to the foreclosure meltdown that helped precipitate the 2008 economic crisis, are intended to make sure borrowers have the wherewithal to repay their home loans – but critics warn they could stunt the recovery.

-- Dogged by Scandals: From its onset, the agency has been the target of allegations from the political right. The CFPB is viewed as the brainchild of Sen. Elizabeth Warren (D-Mass.), who was passed over for the directorship because of GOP opposition.  President Obama’s announcement that he would use his recess appointment power to install Cordray, however, sparked a firestorm, and he ultimately went through the formal confirmation process. Negative headlines have followed, with Republicans making hay over the agency’s $215 million renovation project at its new Washington headquarters, and lingering allegations of discrimination against minority employees in the agency’s ranks.

-- Ambitious Agenda: The CFPB lists 14 items on its current regulatory agenda. While a relatively modest number, the plans include major efforts to tamp down on payday lenders, debt collectors, auto lending and banking fees.

 

ON TAP FOR TUESDAY

The Senate gaveled to order this afternoon and will return this week to a proposal to renew funding for the Highway Trust Fund. 

The House returns to business in the morning and is expected to consider the president’s request for emergency funding to address the Southwest Border crisis.

Obama will sign the Workforce Innovation and Opportunity Act and deliver remarks before heading out on a West Coast swing, including stops in Seattle and San Francisco.

The Senate Health Committee will wade into the regulatory debate over the dangers of workers' exposure to coal dust with a hearing looking at the high rates of black lung disease among miners. http://j.mp/1kDFGwz

Sens. Rand Paul (R-Ky.) and Ben Cardin (D-Md.) will push legislation to expand voting rights to ex-convicts who have paid their debts to society. A 2 p.m. presser will be livecast here: http://j.mp/1pwXsUZ

 

TOMORROW'S REGS TODAY:

The Obama administration will publish 164 new regulations, proposed rules, notices and other administrative actions in Tuesday's edition of the Federal Register. 

Highlights include:

-The Financial Crimes Enforcement Network (FinCEN) may take action against a Middle Eastern bank that it believes is laundering money for terrorists and other criminal organizations.

FinCEN, a branch of the Treasury Department, will propose new rules intended to cut off FBME, formerly known as the Federal Bank of the Middle East, from the U.S. financial system. The rules would forbid U.S. banks and discourage other international banks from doing business with FBME.

FinCEN says the rules would "enhance national security by making it more difficult for money launderers, transnational organized crime, other criminals, sanctions evaders, and terrorists to access the U.S. financial system." http://j.mp/1qYmDAM

-The U.S. Department of Agriculture (USDA) may issue new recordkeeping requirements for delis that grind beef for customers. These delis would be required to disclose the identity and contact information for their beef suppliers, among other things. http://j.mp/1nOprg6

-The Nuclear Regulatory Commission (NRC) will delay security upgrades at nuclear facilities around the country. The NRC proposed security upgrades at certain nuclear plants and while nuclear materials are in transit last month, but the agency now says it is extending the comment period through Oct. 17. http://j.mp/WyR87B

-The U.S. Department of Agriculture (USDA) will delay new water quality regulations in areas monitored by the Forest Service. http://j.mp/1zYn3NN

-The Environmental Protection Agency (EPA) will ease the rules at a hazardous waste site in Maine. The O'Connor Superfund Site in Augusta, Maine was added to a list of the country's top polluters in 1983, but the EPA believes it no longer poses a danger to the nearby environment. http://j.mp/1rkq1rG

  

NEWS RIGHT NOW:

SUCCESS OR FAILURE? Republicans and Democrats spent Monday duking it out over the success of the Dodd-Frank financial reform law on its four-year anniversary, The Hill's Peter Schroeder reports. http://j.mp/1p8xcl6

Meanwhile, House Democrats announced former Rep. Barney Frank (D-Mass.) will return to Congress on Wednesday to defend his namesake law during a Financial Services Committee hearing, which is expected to get heated. http://j.mp/1wS7pyQ

ON THE MOVE: Scott O’Malia, a Republican member of the Commodity Futures Trading Commission, is stepping down after four-plus years on the increasingly important agency.http://j.mp/1qYKHUj

PALATIAL DIGS? Republicans are picking a fight with the Consumer Financial Protection Bureau (CFPB), demanding the agency turn over dozens of emails related to a $215 million renovation project at the agency's headquarters. But the CFPB insists the accusations are overblown and that it is not building "some kind of palace." http://j.mp/1rjvWNM

GIFT CARDS:  The CFPB says it will begin investigating complaints about prepaid credit cards, in the agency's latest move to make sure financial services companies treat consumers fairly. http://j.mp/1p8yD2S

NUKES: Environmental groups are calling on a nuclear regulator to resign, because of a conflict of interest they say he has with industry groups. http://j.mp/1rwC0UK

CLIMATE CHANGE: The NHL announced a plan to fight climate change, which it says is affecting hockey's youth. http://j.mp/1rjy08p

LGBT: President Obama issued an executive order protecting LGBT employees at federal contractors, prompting Senate Majority Leader Harry Reid to dare House Speaker John Boehner to take up a vote for all LGBT workers, including those at private companies. http://j.mp/1rjvnn9

 

BY THE NUMBERS:

400,000: Total number of complaints lodged with the CFPB in the agency’s first three years.

15 million: The number of American consumers who have received refunds for being harmed by illegal practices, according to the agency.

$4.6 billion: Total amount refunded.

$215 million: Total cost of the CFPB’s renovation project at its Washington headquarters.

 

QUOTE OF THE DAY:

“This is not speculative, this is not a matter of political correctness -- people lose their jobs as a consequence of this.” – Obama on the need for the anti-discrimination executive order.

 

We’ll endeavor to stay on top of these and other stories throughout the week, so check The Hill’s Regulation page early and often for the latest. And send any comments, complaints or regulatory news tips our way, via bgoad@thehill.com or tdevaney@thehill.com. And follow us at @ben_goad and @timdevaney.