H.R. 1315 (112th): Consumer Financial Protection Safety and Soundness Improvement Act of 2011

112th Congress, 2011–2013. Text as of Jul 21, 2011 (Passed the House (Engrossed)).

Status & Summary | PDF | Source: GPO

IB

112th CONGRESS

1st Session

H. R. 1315

IN THE HOUSE OF REPRESENTATIVES

AN ACT

To amend the Dodd-Frank Wall Street Reform and Consumer Protection Act to strengthen the review authority of the Financial Stability Oversight Council of regulations issued by the Bureau of Consumer Financial Protection, to rescind the unobligated funding for the FHA Refinance Program and to terminate the program, and for other purposes.

1.

Table of contents

The table of contents for this Act is as follows:

Sec. 1. Table of contents.

Title I—Consumer Financial Protection Safety and Soundness Improvement Act

Sec. 101. Short title.

Sec. 102. Council voting procedure.

Sec. 103. Review authority of the Council.

Sec. 104. Establishment of the Commission.

Sec. 105. Conforming amendments.

Sec. 106. Chair of the Commission required before transfer.

Sec. 107. Inspector General report.

Sec. 108. Analysis of regulations.

Title II—FHA Refinance Program Termination Act

Sec. 201. Short title.

Sec. 202. Rescission of funding for FHA Refinance Program.

Sec. 203. Termination of FHA Refinance Program.

Sec. 204. Publication of Member Availability for Assistance.

I

Consumer Financial Protection Safety and Soundness Improvement Act

101.

Short title

This title may be cited as the Consumer Financial Protection Safety and Soundness Improvement Act of 2011.

102.

Council voting procedure

(a)

In general

Section 1023(c)(3)(A) of the Dodd-Frank Wall Street Reform and Consumer Protection Act is amended—

(1)

by striking 2/3 and inserting a majority; and

(2)

by inserting before the period the following: , excluding the Chair of the Commission of the Bureau.

(b)

Petition by nonvoting members; No restrictions on petition subject matter

Section 1023 of the Dodd-Frank Wall Street Reform and Consumer Protection act is amended by adding at the end the following new subsection:

(g)

Petition by nonvoting members

Notwithstanding any other subsection of this section, the provisions of this section shall apply to a petition by a nonvoting member of the Council to the same extent that they apply to a petition by an agency represented by a member of the Council.

(h)

No restrictions on petition subject matter

Petitions made under this section may be made by an agency or a nonvoting member of the Council on any subject matter, regardless of the areas of particular expertise of such agency or nonvoting member.

.

(c)

Conflict of interest

Section 1023(c)(3) of the Dodd-Frank Wall Street Reform and Consumer Protection Act is amended by adding at the end the following new subparagraph:

(C)

Conflict of interest

No member of the Council may vote on the decision to issue a stay of, or set aside, any regulation under this section, if such member has, within the previous 2-year period, been employed by any company or other entity that is subject to such regulation.

.

103.

Review authority of the Council

Section 1023 of the Dodd-Frank Wall Street Reform and Consumer Protection Act is amended—

(1)

in subsection (a)—

(A)

by striking may and inserting shall; and

(B)

by striking regulation or provision would put the safety and soundness of the United States banking system or the stability of the financial system of the United States at risk and inserting regulation which is the subject of the petition is inconsistent with the safe and sound operations of United States financial institutions; and

(2)

in subsection (c)—

(A)

in paragraph (3)(B)(ii), by striking would put the safety and soundness of the United States banking system or the stability of the financial system of the United States at risk and inserting is inconsistent with the safe and sound operations of United States financial institutions;

(B)

in paragraph (4)—

(i)

by striking subparagraph (B); and

(ii)

by redesignating subparagraph (C) as subparagraph (B);

(C)

by striking paragraph (5);

(D)

by redesignating paragraphs (6), (7), and (8) as paragraphs (5), (6), and (7), respectively; and

(E)

by adding at the end the following new paragraph:

(8)

Public meetings

Any time the Council meets pursuant to this section to decide whether to issue a stay of, or set aside, any regulation, every portion of such meeting shall be open to public observation. The Council shall provide live online streaming or broadcasting of the meetings.

.

104.

Establishment of the Commission

Section 1011 of the Consumer Financial Protection Act of 2010 is amended—

(1)

by striking subsections (b), (c), and (d);

(2)

by redesignating subsection (e) as subsection (j); and

(3)

by inserting after subsection (a) the following new subsections:

(b)

Establishment of the Commission

(1)

In general

There is hereby established a commission (hereinafter referred to in this section as the Commission) that shall serve as the head of the Bureau.

(2)

Authority to prescribe regulations

The Commission may prescribe such regulations and issue such orders in accordance with this title as the Commission may determine to be necessary for carrying out this title and all other laws within the Commission’s jurisdiction and shall exercise any authorities granted under this title and all other laws within the Commission’s jurisdiction.

(c)

Composition of the Commission

(1)

In general

The Commission shall be composed of the Vice Chairman for Supervision of the Federal Reserve System and 4 additional members who shall be appointed by the President, by and with the advice and consent of the Senate, from among individuals who—

(A)

are citizens of the United States;

(B)

have strong competencies and experiences related to consumer financial protection; and

(C)

should want to protect service members and their families who are sacrificing their lives for this country from abusive financial practices.

(2)

Staggering

The members of the Commission appointed under paragraph (1) shall serve staggered terms, which initially shall be established by the President for terms of 1, 2, 4, and 5 years, respectively.

(3)

Terms

(A)

In general

Each member of the Commission appointed under paragraph (1), including the Chair, shall serve for a term of 5 years.

(B)

Removal for cause

The President may remove any member of the Commission appointed under paragraph (1) only for inefficiency, neglect of duty, or malfeasance in office.

(C)

Vacancies

Any member of the Commission appointed under paragraph (1) appointed to fill a vacancy occurring before the expiration of the term to which that member’s predecessor was appointed (including the Chair) shall be appointed only for the remainder of the term.

(D)

Continuation of service

Each member of the Commission appointed under paragraph (1) may continue to serve after the expiration of the term of office to which that member was appointed until a successor has been appointed by the President and confirmed by the Senate, except that a member may not continue to serve more than 1 year after the date on which that member’s term would otherwise expire.

(E)

Other employment prohibited

No member of the Commission appointed under paragraph (1) shall engage in any other business, vocation, or employment.

(4)

Roles and responsibilities of commissioners

One member of the Commission shall have as their primary responsibility the oversight of the Bureau’s activities pertaining to protecting consumers, with a focus on consumers who are older, minorities, youth, or veterans, from unfair, deceptive, and abusive lending practices. The designated commissioner shall be responsible for—

(A)

ensuring the Bureau conducts regular outreach to consumers regarding industry lending activities;

(B)

researching and reporting to the full Commission, on a regular basis, the impact of new loan and credit products and services on consumers;

(C)

ensuring the Bureau coordinates with State-level consumer protection agencies on enforcement measures that protect consumers from unfair, deceptive, and abusive lending practices; and

(D)

researching and reporting to the full Commission about ways to protect consumers from unfair, deceptive, or abusive lending acts or practices, including how language barriers contribute to lack of understanding in lending activities.

(d)

Affiliation

With respect to members appointed pursuant to subsection (c)(1), not more than 2 shall be members of any one political party.

(e)

Chair of the Commission

(1)

Appointment

The Chair of the Commission shall be appointed by the President from among the members of the Commission appointed under paragraph (1).

(2)

Authority

The Chair shall be the principal executive officer of the Bureau, and shall exercise all of the executive and administrative functions of the Bureau, including with respect to—

(A)

the appointment and supervision of personnel employed under the Bureau (other than personnel employed regularly and full time in the immediate offices of members of the Commission other than the Chair);

(B)

the distribution of business among personnel appointed and supervised by the Chair and among administrative units of the Bureau; and

(C)

the use and expenditure of funds.

(3)

Limitation

In carrying out any of the Chair’s functions under the provisions of this subsection the Chair shall be governed by general policies of the Commission and by such regulatory decisions, findings, and determinations as the Commission may by law be authorized to make.

(4)

Requests or estimates related to appropriations

Requests or estimates for regular, supplemental, or deficiency appropriations on behalf of the Commission may not be submitted by the Chair without the prior approval of the Commission.

(f)

No impairment by reason of vacancies

No vacancy in the members of the Commission shall impair the right of the remaining members of the Commission to exercise all the powers of the Commission. Three members of the Commission shall constitute a quorum for the transaction of business, except that if there are only 3 members serving on the Commission because of vacancies in the Commission, 2 members of the Commission shall constitute a quorum for the transaction of business. If there are only 2 members serving on the Commission because of vacancies in the Commission, 2 members shall constitute a quorum for the 6-month period beginning on the date of the vacancy which caused the number of Commission members to decline to 2.

(g)

Seal

The Commission shall have an official seal.

(h)

Compensation

(1)

Chair

The Chair shall receive compensation at the rate prescribed for level I of the Executive Schedule under section 5313 of title 5, United States Code.

(2)

Other members of the Commission

The 3 other members of the Commission appointed under subsection (c)(1) shall each receive compensation at the rate prescribed for level II of the Executive Schedule under section 5314 of title 5, United States Code.

(i)

Initial quorum established

During any time period prior to the confirmation of at least two members of the Commission, one member of the Commission shall constitute a quorum for the transaction of business. Following the confirmation of at least 2 additional commissioners, the quorum requirements of subsection (f) shall apply.

.

105.

Conforming amendments

(a)

Consumer Financial Protection Act of 2010

(1)

In general

The Consumer Financial Protection Act of 2010 is amended—

(A)

in section 1002, by striking paragraph (10);

(B)

in section 1012(c)(4), by striking Director each place such term appears and inserting Commission of the Bureau;

(C)

in section 1013(c)(3)—

(i)

by striking Assistant Director of the Bureau for and inserting Head of the Office of; and

(ii)

in subparagraph (B), by striking Assistant Director and inserting Head of the Office;

(D)

in section 1013(g)(2)—

(i)

by striking Assistant director and inserting Head of the Office; and

(ii)

by striking an assistant director and inserting a Head of the Office of Financial Protection for Older Americans;

(E)

in section 1016(a), by striking Director of the Bureau and inserting Chair of the Commission;

(F)

in section 1017(c)(1), by striking Director and other employees and inserting members of the Commission and other employees;

(G)

in section 1027(l)(1), by striking Director and the; and

(H)

in section 1066(a), by striking Director of the Bureau is and inserting first member of the Commission is.

(2)

Global amendments

The Consumer Financial Protection Act of 2010 is amended—

(A)

by striking Director of the each place such term appears, other than in—

(i)

subparagraphs (A) and (E) of section 1017(4);

(ii)

section 1043;

(iii)

section 1061(b)(3);

(iv)

section 1062;

(v)

section 1063(f);

(vi)

subparagraphs (E) and (G) of section 1064(i)(2); and

(vii)

section 1065(a); and

(B)

by striking Director each place such term appears and inserting Bureau, other than in—

(i)

section 1063(f)(2); and

(ii)

section 1065(a).

(b)

Dodd-Frank Wall Street Reform and Consumer Protection Act

The Dodd-Frank Wall Street Reform and Consumer Protection Act is amended—

(1)

in section 111(b)(1)(D), by striking Director and inserting Chair of the Commission; and

(2)

in section 1447, by striking Director of the Bureau each place such term appears and inserting Bureau.

(c)

Electronic Fund Transfer Act

Section 921(a)(4)(C) of the Electronic Fund Transfer Act, as added by section 1075(a)(2) of the Consumer Financial Protection Act of 2010, is amended by striking Director of the Bureau of Consumer Financial Protection and inserting Bureau of Consumer Financial Protection.

(d)

Expedited Funds Availability Act

The Expedited Funds Availability Act, as amended by section 1086 of the Consumer Financial Protection Act of 2010, is amended by striking Director of the Bureau each place such term appears and inserting Bureau.

(e)

Federal Deposit Insurance Act

Section 2 of the Federal Deposit Insurance Act, as amended by section 336(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, is amended by striking Director of the Consumer Financial Protection Bureau each place such term appears and inserting Chair of the Commission of the Bureau of Consumer Financial Protection.

(f)

Federal Financial Institutions Examination Council Act of 1978

Section 1004(a)(4) of the Federal Financial Institutions Examination Council Act of 1978 (12 U.S.C. 3303(a)(4)), as amended by section 1091 of the Consumer Financial Protection Act of 2010, is amended by striking Director of the Consumer Financial Protection Bureau and inserting Chair of the Commission of the Bureau of Consumer Financial Protection.

(g)

Financial Literacy and Education Improvement Act

Section 513 of the Financial Literacy and Education Improvement Act, as amended by section 1013(d) of the Consumer Financial Protection Act of 2010, is amended by striking Director each place such term appears and inserting Chair of the Commission.

(h)

Home Mortgage Disclosure Act of 1975

Section 307 of the Home Mortgage Disclosure Act of 1975, as amended by section 1094(6) of the Consumer Financial Protection Act of 2010, is amended by striking Director of the Bureau of Consumer Financial Protection each place such term appears and inserting Bureau of Consumer Financial Protection.

(i)

Interstate Land Sales Full Disclosure Act

The Interstate Land Sales Full Disclosure Act, as amended by section 1098A of the Consumer Financial Protection Act of 2010, is amended—

(1)

by amending section 1402(1) to read as follows:

(1)

Chair means the Chair of the Commission of the Bureau of Consumer Financial Protection;

;

(2)

in section 1416(a), by striking Director of the Bureau of Consumer Financial Protection and inserting Chair; and

(3)

by striking “Director” each place such term appears and inserting “Bureau”.

(j)

Real Estate Settlement Procedures Act of 1974

Section 5 of the Real Estate Settlement Procedures Act of 1974, as amended by section 1450 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, is amended—

(1)

by striking The Director of the Bureau of Consumer Financial Protection (hereafter in this section referred to as the Director) and inserting The Bureau of Consumer Financial Protection; and

(2)

by striking Director each place such term appears and inserting Bureau.

(k)

S.A.F.E. Mortgage Licensing Act of 2008

The S.A.F.E. Mortgage Licensing Act of 2008, as amended by section 1100 of the Consumer Financial Protection Act of 2010, is amended—

(1)

by striking Director each place such term appears in headings and text and inserting Bureau; and

(2)

in section 1503, by striking paragraph (10).

(l)

Title 44, United States Code

Section 3513(c) of title 44, United States Code, as amended by section 1100D(b) of the Consumer Financial Protection Act of 2010, is amended by striking Director of the Bureau and inserting Bureau.

106.

Chair of the Commission required before transfer

Section 1062 of the Dodd-Frank Wall Street Reform and Consumer Protection Act is amended by adding at the end the following new subsection:

(d)

Chair of the Commission required before transfer

Notwithstanding the other provisions of this section, the single calendar date for the transfer of functions to the Bureau under section 1061 shall be the later of—

(1)

the date that would have been designated, but for the application of this subsection; and

(2)

the date on which the Chair of the Commission of the Bureau is confirmed by the Senate.

.

107.

Inspector General report

Section 1013 of the Dodd-Frank Wall Street Reform and Consumer Protection Act is amended by adding at the end the following new subsection:

(h)

Inspector General report

(1)

In general

Not later than February 1, 2012, and annually thereafter, the Inspector General of the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection shall submit a report to the Congress containing the following:

(A)

A list of all new rules, guidelines, and regulations prescribed by the Bureau within the previous fiscal year, with corresponding detailed descriptions of each.

(B)

A detailed list of all authority which the Inspector General believes overlaps with the efforts of other Federal departments and agencies.

(C)

All administrative expenses of the Bureau, including the amount spent on salaries, office supplies, and office space.

(D)

The current amount in the Bureau of Consumer Financial Protection Fund.

(2)

Public disclosure

The Inspector General of the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection shall make each report submitted under paragraph (1) available to the public, including on the Bureau’s website.

(3)

Use of funds

The Inspector General shall carry out this subsection using existing funds.

.

108.

Analysis of regulations

Section 1022 of the Dodd-Frank Wall Street Reform and Consumer Protection Act is amended by adding at the end the following new subsection:

(e)

Analysis of regulations

(1)

In general

Each time the Bureau proposes a new rule or regulation, the Bureau shall—

(A)

carry out an initial regulatory flexibility analysis for such proposed rule or regulation, which shall be carried out as closely as possible to those initial regulatory flexibility analyses required under section 603 of title 5, United States Code, but which shall analyze the financial impact of the proposed rule or regulation on all financial entities, regardless of size; and

(B)

carry out an analysis of whether the proposed rule or regulation will impair the ability of individuals and small business to access credit from financial institutions.

(2)

Report

The Bureau shall issue a report to the Council on the analyses carried out under paragraph (1), and make such analyses available to the public.

(3)

Use of existing resources

The Bureau shall use existing resources to carry out the requirements of this subsection.

.

II

FHA Refinance Program Termination Act

201.

Short title

This title may be cited as the FHA Refinance Program Termination Act.

202.

Rescission of funding for FHA Refinance Program

Effective on the date of the enactment of this Act, there are rescinded and permanently canceled all unexpended balances remaining available as of such date of enactment of the amounts made available under title I of the Emergency Economic Stabilization Act (Public Law 110–343; 12 U.S.C. 5211 et seq.) that have been allocated for use under the FHA Refinance Program (pursuant to Mortgagee Letter 2010–23 of the Secretary of Housing and Urban Development) of the Making Home Affordable initiative of the Secretary of the Treasury. All such unexpended balances so rescinded and permanently canceled shall be retained in the general fund of the Treasury for reducing the debt of the Federal Government.

203.

Termination of FHA Refinance Program

(a)

Termination of Mortgagee Letter

The Mortgagee Letter referred to in section 202 shall be void and have no effect and the Secretary of Housing and Urban Development may not issue any regulation, order, notice, or mortgagee letter based on or substantially similar to such Mortgagee Letter.

(b)

Treatment of remaining funds

Notwithstanding subsection (a) of this section, any amounts made available for use under the Program referred to in section 202 of this title and expended before the date of the enactment of this Act shall continue to be governed by the Mortgagee Letter specified in subsection (a) of this section, and any other provisions of law, regulations, orders, and notices, applicable to such amounts, as in effect immediately before such date of enactment.

(c)

Termination

After the enactment of this Act, the Secretary of Housing and Urban Development may not newly insure any mortgage under the FHA Refinance Program referred to in section 202 of this title except pursuant to a commitment to insure made before such enactment, and upon the completion of all activities with respect to such commitments under the provisions of law, regulations, orders, notices, and mortgagee letters referred to in subsection (b) of this section, the Secretary of Housing and Urban Development shall terminate the FHA Refinance Program referred to in section 202.

(d)

Study of use of program by members of the Armed Forces, veterans, Gold Star recipients, and members and veterans with service-connected disabilities and their families

(1)

Study

The Secretary of Housing and Urban Development shall conduct a study to determine the extent of usage of the FHA Refinance Program referred to in section 202 by, and the impact of such program on, covered homeowners.

(2)

Report

Not later than the expiration of the 90-day period beginning on the date of the enactment of this Act, the Secretary shall submit to the Congress a report setting forth the results of the study under paragraph (1) and identifying best practices, with respect to covered homeowners, that could be applied to the FHA Refinance Program.

(3)

Covered homeowner

For purposes of this subsection, the term covered homeowner means a homeowner who is—

(A)

a member of the Armed Forces of the United States on active duty or the spouse or parent of such a member;

(B)

a veteran, as such term is defined in section 101 of title 38, United States Code;

(C)

eligible to receive a Gold Star lapel pin under section 1126 of title 10, United States Code, as a widow, parent, or next of kin of a member of the Armed Forces person who died in a manner described in subsection (a) of such section; and

(D)

such members and veterans of the Armed Forces who have service-connected injuries, and survivors and dependents of such members and veterans of the Armed Forces with such injuries.

204.

Publication of Member Availability for Assistance

Not later than 5 days after the date of the enactment of this Act, the Secretary of Housing and Urban Development shall publish to its Website on the World Wide Web in a prominent location, large point font, and boldface type the following statement: The FHA Short Refinance Program, which was intended to provide borrowers with refinance opportunities, has been terminated. If you are having trouble paying your mortgage and need help contacting your lender or servicer for purposes of negotiating or acquiring a loan modification, please contact your Member of Congress to assist you in contacting your lender or servicer for the purpose of negotiating or acquiring a loan modification..

Passed the House of Representatives July 21, 2011.

Karen L. Haas,

Clerk.