Democrats Push New Regulatory Relief Measure, CFTC and EU Regulat

Democrats Push New Regulatory Relief Measure, CFTC and EU Regulators Work to Agree on Clearinghouse Rules

, Mara C. Giorgio of Squire Patton Boggs (US) LLP - Capital Thinking Blog

Monday, June 8, 2015

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Legislative Activity

Democrats Pushing Regulatory Relief Bill

On Wednesday, June 3, Democrats on the House Financial Services and Senate Banking Committees filed a joint bill – the Community Lender Regulatory Relief and Consumer Protection Act of 2015 (H.R. 2642/S. 1491) aimed at providing targeted regulatory relief to smaller banks and credit unions by, among other things: (1) assisting these financial institutions in issuing more “qualified mortgages” (QMs); (2) streamlining privacy notices; and (3) reducing bank examinations from once a year to once every 18 months. While all Democrats on both committees have indicated support for the legislation, the path forward remains uncertain.

Similarly, the regulatory relief legislation introduced by Senate Banking Committee Chairman Richard Shelby (R-AL) and approved by the Committee before Memorial Day recess awaits consideration on the Senate floor. The legislation was approved by the Committee on a partisan basis and it is unclear whether it has sufficient support to advance in the Senate. Financial services lawmakers on both sides of the aisle will now be tasked with finding middle ground on the issues.

House to Take Up CEA Reauthorization

On Tuesday, June 9, the House will consider the Commodity End-User Relief Act (H.R. 2289) under a structured rule. The legislation, which would, among other things, reauthorize the Commodity Exchange Act (CEA) was approve by the House Agriculture Committee on May 29. The Committee’s efforts are a continuation of lawmakers’ work last year, who were ultimately unable to pass legislation to reauthorize the CEA, which expired in September 2013.

This Week’s Hearings:

Thursday, June 11: The House Financial Services Committee will hold a hearing titled “The Future of Housing in America: Oversight of the Department of Housing and Urban Development.”
Thursday, June 11: The House Financial Services Subcommittee on Financial Institutions and Consumer Credit will hold a hearing titled “Examining Legislative Proposals to Preserve Consumer Choice and Financial Independence.”

Regulatory Activity

EU Delays Certain Capital Requirements, Awaiting Deal Between CFTC and EU Regulators

Last week, the European Commission (EC) announced that it would allow for six additional months of negotiations between the Commodity Futures Trading Commission (CFTC) and European Union (EU) regulators to come to an agreement on clearinghouse rules. According to the EC, banks that have used clearinghouses that have not been designated as sufficiently in compliance with government supervision requirements will now have until mid-December (from June 15) before they are subject to higher capital requirements. As EU Financial Services Commissioner Jonathan Hill noted, “we are continuing to work hard on solving the underlying issues.” Similarly, CFTC Chairman Timothy Massad expressed that despite taking longer than originally anticipated, he “believe[s] we have narrowed the issues and are making good progress.”