The Dodd-Frank Act requires derivatives transactions to be cleared through a registered clearing house, and exempts swaps and security based swaps from this clearing requirement if one of the counterparties is not a financial entity. The Business Risk Mitigation and Price Stabilization Act exempts true derivatives end-users from having to post margin as required under Dodd-Frank. True end-users are firms and companies that use derivatives to manage their risks, not to speculate. The legislation is sponsored by Rep. Michael Grimm. Read More »
Representatives Spencer Bachus (R-AL), Frank Lucas (R-OK), K. Michael Conaway (R-TX), and Scott Garrett (R-NJ) introduced H.R. 1573, which would extend the deadline by 18 months for implementing Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The bill gives the regulatory agencies more time to effectively meet the objectives of the derivatives title, to prioritize deliberation over speed, to consider the costs and benefits, and to understand the cumulative impact of the rules that will be applied to the marketplace. Additionally, the bill realigns the U.S. with the ... Read More »
The Responsible Consumer Financial Protection Regulations Act establishes a bipartisan commission of five members at the Consumer Financial Protection Bureau (CFPB). H.R. 1121, introduced by Chairman Spencer Bachus facilitates robust consumer financial protection by empanelling a five-member Commission to carry out all of the duties that would otherwise fall to the Director of the CFPB. This proposed structure of the CFPB is the same structure that has worked well for nearly every other regulatory body in this country, including the FTC, FDIC and SEC. H.R. 1121 is identical to the bipartisan a... Read More »
The expansive powers given to the CFPB to write rules will have far-reaching implications. Yet, the Dodd-Frank Act makes the CFPB’s judgments essentially unreviewable. The Dodd-Frank Act did include a review process, but the process is essentially meaningless . The Act allows the Financial Stability Over-sight Council to review rulemaking by the CFPB, but it must meet virtually impossible prerequisites in order to overturn any CFPB rulemaking. Among the extreme standards the FSOC must meet to overturn a rule are: Two-thirds of FSOC members must approve; The FSOC must find the rule endangers t... Read More »
H.R. 1182 ends the taxpayer-funded bailouts of Fannie Mae and Freddie Mac and put these two companies on a path towards privatization. The failures of the two government-sponsored enterprises (GSEs) have directly cost taxpayers more than $150 billion. H.R. 1182 is sponsored by Rep. Jeb Hensarling. Read More »
H.R. 839, introduced by Rep. Patrick McHenry (NC), would terminate Treasury’ authority to provide new assistance under the Home Affordable Modification Program (HAMP) while preserving the contracts made prior to the bill’s enactment. H.R. 839 prevents $30 billion in TARP funds from being spent. Background: HAMP was announced by the Administration in February 2009 as part of a three-part “Making Home Affordable Program.” $30 billion in TARP funds were set aside for HAMP to provide payments to mortgage servicers for modifying mortgages of struggling borrowers. The Administration claimed HAMP wou... Read More »
H.R. 861, introduced by Rep. Gary Miller (CA) on March 1, terminates the Neighborhood Stabilization Program (NSP) and prevents $1 billion from being spent on this program. Background: In 2008 the Democrats’ GSE bailout bill (the Housing and Economic Recovery Act) established the NSP with $4 billion in funding. NSP provides taxpayer dollars to State and local governments to purchase, renovate, rebuild, and resell abandoned and foreclosed property. The Democrats added another $1.93 billion in funding to the NSP through the Obama stimulus plan in 2009 and another $1 billion in the Dodd-Frank Act.... Read More »
H.R. 836, introduced by Rep. Jeb Hensarling on February 28, 2011, ends HUD’s Emergency Homeowners Relief Program and prevents $1 billion from being spent on this program that increases struggling homeowners’ debts. Background: The Dodd-Frank Act established a $1 billion HUD Emergency Homeowner Relief Program, which provides loans or credit advances to unemployed borrowers who cannot pay their mortgages because of unemployment or reduction in income. Payments under the program may be provided for 12 months, with a possible 12-month extension. The Obama Administration, in its FY 2012 budget pro... Read More »
The legislation, introduced by Capital Markets Subcommittee Chairman Scott Garrett, helps clarify the risk retention rules required under Section 941 of the Dodd-Frank Act to make clear that Fannie Mae and Freddie Mac will be held to the same standards as any other secondary mortgage market participants. A GSE loan purchase or asset-backed security issuance would not affect the status of the underlying assets. On April 6, 2011, the Capital Markets Subcommittee approved the legislation with a vote of 34-0. Read More »
The legislation, introduced by Chairman Bachus, suspends the compensation packages for executives of Fannie Mae and Freddie Mac and places all other employees on the General Schedule pay scale. Since September 2008 when Fannie Mae and Freddie Mac entered Federal conservatorships, the Federal Housing Finance Authority has approved multi-million dollar compensation packages for the GSEs’ top executives. A report released on Thursday by the Inspector General of the FHFA found that the six top executives at Fannie and Freddie were paid $35.4 million since the taxpayers bailed out the GSEs. On Apri... Read More »
