Report That Trump Preparing to Replace Head of OCC, Agency That Affects Consumers

WSJ has a story here (behind paywall).  The OCC famously declared state anti-predatory lending laws preempted as to national banks, which probably worsened some of the subprime lending leading to the Great Recession.  It also received 700 whistleblower reports about Wells Fargo employees gaming the incentive plans (that led to the unauthorized accounts scandal) back in 2010 but dropped the ball.  So this is an agency that affects consumer protection. The current agency head is Thomas Curry, an Obama appointee, whose term has expired but who is staying on for the moment. According to the WSJ:

President Donald Trump could soon replace Mr. Curry with an acting head of the agency, who would serve until a new comptroller is confirmed, these people said. The change could happen as soon as this week, they said.

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People familiar with the matter said Mr. Trump is considering for the job Joseph Otting, a former banker who worked with Treasury Secretary Steven Mnuchin at OneWest Bank.

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The administration is considering naming as acting comptroller Keith Noreika, a banking lawyer at Simpson Thacher & Bartlett LLP * * *

 

House Republicans look to undo Dodd-Frank law

The Washington Post reports:

Republicans who eagerly awaited a GOP president so they could take a heavy knife to many of the regulatory requirements for banks, insurers and other financial institutions finally get their chance.

The House Financial Services Committee, led by Texas Rep. Jeb Hensarling, is slated to begin work Tuesday on legislation to largely undo the Dodd-Frank law, which Congress passed and Democratic President Barack Obama signed after the financial meltdown in 2008.

The full article is here.

An op-ed regarding the effort to repeal the Dodd-Frank "orderly liquidation " authority for banks deemed "too big to fail" is here.

SCOTUS Rules Cities Have Standing Under FHA to Challenge Discriminatory Mortgage Lending

The decision is here. SCOTUSblog analysis here. Here's the first paragraph of that analysis:

The Supreme Court handed a partial but significant victory to cities today, holding that the Fair Housing Act allows the city of Miami to bring a lawsuit alleging that two banks, Bank of America and Wells Fargo, violated the law when they issued riskier but more costly mortgages to minority customers than they had offered to white borrowers. But it was hardly a complete win for the city, as the court also ruled that the lower court should have applied a tougher test to determine whether the city can recover compensation for its losses. This means that the case will now return to the lower court for it to decide whether there is enough of a connection between the banks’ lending practices and the city’s economic injuries to hold the banks liable.

House Financial Services Committee to Markup (Vote on?) Choice Act Tuesday

The Hill reports that "Panel Democrats say they're preparing to offer dozens of amendments and plan to draw out the hearing for hours, as they make the case to protect the Obama-era financial regulation law."  Meanwhile, according to CNN Money,  the "bill is likely to clear the House, where Republicans hold the majority and don't need Democrat's support. It's chances in the Senate, however, would require Democratic support to win a 60-vote majority to pass." The CFPB structure is a particular sticking point.

Study Finds Many Consumers Can't Tell That Native Ads are Paid Content

David A. Hyman of Georgetown, David J. Franklyn of the University of San Francisco, Calla E. Yee of Kilpatrick, Townsend & Stockton, and Mohammad Rahmati of Sharif University have written Going Native: Can Consumers Recognize Native Advertising? Does it Matter? 19 Yale J.L. & Tech. 77 (2017).  Here the abstract:

Native advertising, which matches the look and feel of unpaid news and editorials, has exploded online. The Federal Trade Commission has long required advertising to be clearly and conspicuously labeled, and it recently reiterated that these requirements apply to native advertising. We explore whether respondents can distinguish native advertising and “regular” ads from unpaid content, using 16 native ads, 5 “regular” ads, and 8 examples of news/editorial content, drawn from multiple sources and platforms. Overall, only 37% of respondents thought that the tested examples of native advertising were paid content, compared to 81% for “regular” advertising, with variation by platform, advertiser, and labeling. Modest labeling changes materially increased the number of respondents that correctly recognized that native ads are paid content – but even these improved results fell well short of those for “regular” advertising. We also explored labeling preferences and self-reported concern about native advertising. Our findings indicate that native advertising involves a significant risk of deception which self-regulation has not addressed.

CFPB sues four online lenders for collecting on debts consumers did not owe

The Consumer Financial Protection Bureau today filed suit against four online lenders – Golden Valley Lending, Inc., Silver Cloud Financial, Inc., Mountain Summit Financial, Inc., and Majestic Lake Financial, Inc. – for deceiving consumers by collecting debt they were not legally owed. The CFPB alleges that the four lenders could not legally collect on these debts because the loans were void under state laws governing interest rate caps or the licensing of lenders. The CFPB alleges that the lenders made deceptive demands and illegally took money from consumer bank accounts for debts that consumers did not legally owe. The CFPB seeks to stop the unlawful practices, recoup relief for harmed consumers, and impose a penalty.

The CFPB's press release, with a link to the complaint, is here.

FCC chief begins rollback of net neutrality regulations

The Federal Communications Commission has begun the process to rollback net neutrality regulations. NPR has the story.

For the perspective of the inventor if the World Wide Web, Consumerist has this article.

Credit Union Times on the Financial Choice Act Hearing: Partisan Infighting

Here.

CFPB monthly report highlights complaints about student loans

The Consumer Financial Protection Bureau released today a monthly complaint report highlighting consumer complaints about student loans. The report shows that both private and federal student loan borrowers nationwide report persistent servicing breakdowns that may sideline their path to repayment. The report also highlights trends seen in complaints coming from Nevada.

The CFPB notes that, as of April 1, 2017, it has handled approximately 1,163,200 consumer complaints across all products. 

The monthly report is here.

House Financial Services Committee Reported Set to Markup Financial Choice Act Next Week

by Jeff Sovern

So CNNMoney reports here. The Committee will hold a hearing tomorrow; the witness list appears here.  Seems pretty rushed for a 600-page bill that would make major changes in financial regulation, including changing the structure of the CFPB, eliminating its power to prohibit unfair, deceptive, and abusive practices, abrogating its power to regulate arbitration, and plenty of other changes.  But that's how this Congress rolls. I suspect this bill will share the fate of Trumpcare, though it may get further in the legislative process than Trumpcare did.