Justice Gorsuch’s maiden opinion is a unanimous decision favoring debt purchasers. In a unanimous opinion written by Justice Neil M. Gorsuch, the Supreme Court ruled today that someone who purchases a defaulted debt is not a “debt collector” and is therefore not subject to the federal Fair Debt Collection Practices Act, or FDCPA.
The case, Henson v. Santander Consumer USA Inc., was argued on April 18, the second day Justice Gorsuch sat on the bench after being sworn in the week before as the high court’s 113th justice. The opinion was Justice Gorsuch’s first for the Supreme Court, even though he did not ask a single question or make any comments at oral argument.
Santander had purchased a portfolio of defaulted auto loans from a bank. The district court and the Fourth Circuit both held that Santander was not a “debt collector” and thus not subject to the regulations and remedies afforded to consumers under the FDCPA. The Supreme Court granted certiorari to resolve a split because other circuits had held that purchasing debt did not give a debt collector immunity from the FDCPA.
The U.S. Treasury Secretary Steven Mnuchin unveiled the much-anticipated report on the department's assessment of the financial market as ordered by President Donald Trump earlier this year. The report details potential executive actions and regulatory changes that can be immediately undertaken to provide much-needed relief, according to the Treasury. Though, to be sure, the timeline of implementing any actual change is likely to be at least one year away. The report also makes extensive recommendations on the path to bring back private mortgage investor capital into the secondary markets. Shortly after taking office, Trump issued an executive order mandating that the Treasury examine financial regulations to determine if they satisfied a set of seven core principles. Those seven principles are generally related to economic growth, prudential regulation and taxpayer protection. So, for the past four months, Mnuchin and other Treasury officials got to work on this, meeting with stakeholders across the financial ecosystem, including community, independent, regional and large banks, regulators, FSOC members, consumer advocates, academics, analysts and investors.
The Trump administration will recommend limits on the U.S. consumer-finance regulator and a reassessment of a broad range of banking rules in a report to be released as early as today, the Wall Street Journal reported. The report from the Treasury Department, drafted in response to a February executive order from President Donald Trump, is less sweeping than financial legislation approved by the House of Representatives last week, these people said. That suggests the administration is taking a more pragmatic path than some Republicans who want to throw out Obama-era financial rules wholesale, although administration officials are still seeking to loosen regulatory restrictions on banks in significant ways. The report is around 150 pages and makes recommendations on policy goals, without laying out a specific process for achieving them. It is harshly critical of the Consumer Financial Protection Bureau and recommends that the bureau be stripped of its authority to examine financial institutions. By law, the bureau has the authority to enforce consumer laws as well as to examine individual firms on a continuing basis.
The American economy has looked pretty robust of late — unemployment just hit a 16-year low, and stocks recently reached an all-time high. This makes it all the more curious that Americans have suddenly stopped paying off their credit-card bills at a rapid rate. In the past two fiscal quarters, banks reported a steep rise in credit-card charge-offs — debt that companies can't collect from their customers — according to a report from Moody's. The sharp increase, the largest since 2009, is especially unusual given how strong the US employment market has been, Moody's noted. It suggests that American consumers haven't fallen on hard times so much as banks have started to loosen their standards and issue credit more aggressively. Card issuers have been much stricter since the financial crisis and the passing of the Card Act in 2009, which added an array of protections for consumers. Getting a credit card got a lot tougher, especially if you had subprime credit.
Dodd-Frank, which imposed stricter rules on banks in the wake of the financial crisis, is highly unpopular in Republican circles. True, passing a significant weakening of the 2010 law -- it also set up the CFPB -- is a lot easier in the House, where the Republicans have a larger majority, than in the Senate. In the Senate, they have a narrower (52-48) advantage, not enough to overcome a Democratic filibuster, which needs 60 votes. Still, Republican lawmakers and President Donald Trump, also a vocal critic of the consumer agency, have several other chances to hobble its far-reaching powers. The GOP line is that the CFPB, created in 2012, has stifled economic activity by burdening lenders with regulations and lawsuits. They charge that its director, Richard Cordray, has unconstitutional authority: He can be fired only by the president and only for cause, such as malfeasance or negligence. Under the bill going to the House floor, the CFPB would be prevented from its freewheeling ability to go after what it sees as violations, and can only enforce what's on the books. Its director would serve at the pleasure of the president, and its budget -- now funded by the Federal Reserve -- would be shifted to Congress, thus subjecting it more to political forces.
When President Donald Trump took office, many in the financial industry were confident that a looming retirement-savings rule they had opposed for years would soon be dead. To their dismay, the core principle of the rule was implemented today, the Wall Street Journal reported. The resilience of the “fiduciary rule” is partly attributable to delays in appointing senior officials at the Labor Department, the rule’s creator, who would be capable of unwinding a major regulation so close to its implementation, according to industry representatives and consumer advocates involved in the process. Labor Secretary Alexander Acosta didn’t take up his post until late April, after Trump’s first pick for the role withdrew from consideration. Other top positions at the Labor Department remain vacant, leaving career officials—who had helped to write the original rule — to shepherd a review of the rule that the president requested in February. Aversion toward the risk of litigation from consumer groups has also made the administration reluctant to delay the rule long enough to allow for an overhaul or kill it altogether, industry representatives and consumer advocates say.
The U.S. House passed on Thursday a massive bill designed to repeal many Obama-era Wall Street regulations.
The new legislation, known as the Financial CHOICE Act, is the signature legislative effort of U.S. Rep. Jeb Hensarling, R-Dallas, during his tenure as the House Financial Services Committee chairman. It passed the House on a mostly party-line vote of 233-186. The Texas delegation vote broke down along party lines, with the exception of U.S. Rep. Sam Johnson, R-Richardson, who was absent. The bill dismantles much of the 2010 Dodd-Frank Wall Street overhaul, which was drafted in response to the 2008 financial crisis and became a signature accomplishment of the Obama administration. While the bill breezed through the House chamber, its path forward in the U.S. Senate is far less certain, where Democratic support would be needed to draw the necessary 60 votes.
The House voted (233-186) today for passage of the Financial CHOICE Act, an opening Republican bid to encourage economic growth by loosening regulation of the financial sector, the Wall Street Journal reported. The bill, authored by House Financial Services Committee Chair Jeb Hensarling (R-Texas), would unwind major parts of Dodd-Frank by relieving healthy banks of some regulatory requirements and forcing failing firms through bankruptcy rather than a liquidation process spearheaded by the regulators. It would subject new financial rules to cost-benefit analyses, boost penalties for financial wrongdoers, and repeal the Volcker rule restricting banks from speculative trading. Supporters of the plan say scrapping what they view as onerous regulatory requirements will ultimately help smaller businesses, allowing them to grow and create jobs. The bill is expected to face stiff resistance in the Senate, but aspects of the Financial CHOICE Act could be approved by Congress in smaller pieces or be implemented by the Trump administration.
House Financial Services Committee Chairman Jeb Hensarling (R-Texas) said Thursday he’s considering seeking contempt of Congress charges against the director of the Consumer Financial Protection Bureau (CFPB). Hensarling said CFPB Director Richard Cordray has refused to turn over documents his panel requested for its investigation into Wells Fargo’s sales practices. A report from the Financial Services Committee’s Republican staff released Tuesday argued that Cordray’s refusal was grounds to pursue contempt of Congress charges. “It’s nothing personal against Mr. Cordray, but I’ve got a job to do,” Hensarling said at a briefing with reporters Thursday. “We will use whatever legal means necessary to get those documents.” The CFPB fined Wells Fargo $100 million in September 2016 for opening and charging fees for more than 2 million bank and credit accounts for customers without their authorization. The Office of the Comptroller of the Currency (OCC) and the City of Los Angeles were also involved in the investigation of practices first revealed by the Los Angeles Times in 2013. GOP lawmakers on the panel have argued that Cordray and the CFPB were “asleep at the wheel” and jumped into the investigation late to take credit.
The U.S. House is expected to pass sweeping legislation Thursday sponsored by Texas Republican Jeb Hensarling that would roll back major pieces of the Dodd-Frank Act, the banking law passed by Democrats in the wake of the 2007-2008 financial crisis. The expected party-line vote will represent a milestone for Hensarling, an eight-term congressman who led the opposition to the George W. Bush administration's 2008 bank bailout. As chairman of the House Financial Services Committee, he has focused on loosening the regulatory burdens on banks. The vote in the Republican-dominated House will set up a tough battle in the Senate, where Democrats who see the legislation as an attack on consumer protections appear to have the votes to block it. Hensarling's 600-page bill, known as the Financial Choice ACT of 2017, would repeal some of President Obama's signature financial reforms, chiefly the so-called Volcker Rule limiting certain types of speculative investments by banks. More controversially for Democrats, the bill would weaken the Obama-era Consumer Financial Protection Bureau which was set up to investigate consumer complaints against financial institutions.