The Six Most Surprising Regulation and Reform Stories
February 4, 2013 11:54 AM
The month of January closed out on a week of surprises, with an unexpected change near the top of the OCC, and a lawmaker's unanticipated push for a new structure at that agency in addition to the CFPB. Following are the six stories you didn't want to miss: (Image: Thinkstock)
Michael Brosnan, the OCC's point person on all large banks, said last week he was leaving that position to become examiner-in-charge at Zions Bank. The demotion was supposedly at Brosnan's own request, fueling questions about whether he really wanted to leave and why.Related Article: OCC Senior Leadership Gets Another Surprise Overhaul
Republicans have been publicly calling to revamp the structure of the CFPB for more than a year, replacing its single director with a 5-member commission. But Sen. Mike Crapo, the new lead GOP lawmaker on the Senate Banking Committee, added a new twist last week by endorsing a similar structural change at the OCC. That's a switch Democrats might welcome.Related Article: Crapo Urges Bipartisanship, But Stands Tough on CFPB Fight (Image: Bloomberg News)
With Republicans and Democrats feuding over the structure of the CFPB, there's one lawmaker that could unexpectedly resolve the issue: Sen. Elizabeth Warren. The founder of the CFPB is a unique position to potentially cut a deal with the GOP and secure the agency's legal status - if she wants to.Related Article: How Elizabeth Warren Can Save the CFPB (Image: Bloomberg News)
As talk of narrowing the safety net gains traction, there is a growing divide between those that want to push for a clean break up of the banks and those who argue Dodd-Frank helped to address the "too big to fail" issue. The surprise here? That two smart regulators (one current, one former) could have such a wide divide between them.Related Article: Can We Put the 'Too Big to Fail' Genie Back in the Bottle? (Image: Bloomberg News)
Critics charge that the OCC cut a recent $8.5 billion settlement with the banks over mortgage servicing mistakes in an effort to please Capitol Hill, worried the reviews the agency had mandated were taking too long and costing too much. If that's true, however, the strategy backfired. In an unexpected twist, Sen. Warren and Rep. Maxine Waters are asking regulators for more details about the review process as well as compensation given to consultants during that time.Related Article: Warren, Waters Seek Answers on Mortgage Servicer Settlement
Raj Date, who left his position as CFPB's No. 2 last week, said the conventional wisdom on crafting the QM rule was wrong. It wasn't trying to "find some magical sweet spot between antagonistic interests." Instead it was a way of trying to ensure lenders were taking basic steps to ensure borrowers have the ability to repay a loan.Related Article: CFPB's Date Defends QM, Talks 'Stressful' Deadlines (Image: Bloomberg News)
