Legislative Activity

Financial Services Lawmakers Hone in on Dodd-Frank Reform as Fifth-Year Anniversary Approaches

As the fifth anniversary marking the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) arrives this Tuesday, July 21, financial services lawmakers are continuing to focus on ways to reform the law.  On the House side, House Financial Services Committee Chairman Jeb Hensarling (R-TX) soon plans to organize a series of hearings to examine the Dodd-Frank Act and whether it has in fact resulted in greater financial stability. Moving forward, the Committee will focus on housing finance reform, institutions that are considered “Too-Big-to-Fail,” and oversight of the Department of Housing and Urban Development (HUD).  According to Chairman Hensarling, the Committee is likely only to tackle small components of these and other issues this year, but has plans to move a larger bill in 2016.

On the other side of the Capitol, the Senate Banking Committee is now focused on reforms, such as raising the threshold for designation as a systemically important financial institution (SIFI), that may eventually be paired with relief for community and regional banks.  While various Committee Democrats have pushed back against the $500 billion level proposed in Chairman Richard Shelby’s (R-AL) bill, the Committee this week will hold hearings on the SIFI designation process and systemic risk – a possible precursor to some sort of compromise on the issue.

DoL’s Fiduciary Rule Still in Spotlight

As the comment period for the Department of Labor’s (DoL) Fiduciary Rule proposal closes this Tuesday, July 21, DoL Secretary Thomas Perez is scheduled that same day to testify about the proposal before the Senate Health, Education, Labor, and Pensions (HELP) Subcommittee on Employment and Workplace Safety.  DoL has scheduled its own hearing on the matter for August 10.

Separately, Senate Homeland Security and Governmental Affairs Committee Chairman Ron Johnson (R-WI) last week criticized Securities and Exchange Commission (SEC) Chair Mary Jo White for failing to turn over documents his Committee requested regarding the agency’s collaboration with the Department of Labor in drafting its fiduciary proposal.  According to Chairman Johnson, “[i]f the Commission fails to immediately provide the requested documents, the Committee may consider use of the compulsory process.” The SEC has since indicated that it is “in the process of responding to the Committee as appropriate.”

This Week’s Hearings:

• Wednesday, July 22: The House Financial Services Subcommittee on Monetary Policy and Trade will hold a hearing titled “Examining Federal Reserve Reform Proposals.”

• Wednesday, July 22: The House Financial Services Task Force to Investigate Terrorism Financing will hold a hearing titled “The Iran Nuclear Deal and Its Impact on Terrorism Financing.”

• Wednesday, July 22: The Senate Banking Subcommittee on Securities, Insurance, and Investment will hold a hearing titled “Oversight of the Financial Stability Oversight Council Designation Process.”

• Thursday, July 23: The House Financial Services Committee will hold a hearing titled “Ending ‘Too Big to Fail’: What is the Proper Role of Capital and Liquidity?”

• Thursday, July 23: The Senate Banking Committee will hold a hearing titled “Measuring the Systemic Importance of U.S. Bank Holding Companies.”

• Friday, July 24: The House Financial Services Subcommittee on Financial Institutions and Consumer Credit will hold a hearing titled “National Credit Union Administration Operations and Budget.”

Regulatory Activity

Federal Reserve, OFR to Hold Meetings

Today, Monday, July 20, the Board of Governors of the Federal Reserve System will hold an open meeting to consider: (1) a Final Rule to Establish Risk-Based Capital Surcharges for Systemically Important Bank Holding Companies; and (2) a Final Order Applying Enhanced Prudential Standards to General Electric Capital Corporation under Section 165 of the Dodd-Frank Act.

Separately, on Thursday, July 23, the Office of Financial Research (OFR) will hold the sixth meeting of the Financial Research Advisory Committee to review committee recommendations and discuss stress testing, data collection, data sharing, and analyzing operational risks.