House Financial Services Committee Chairman Jeb Hensarling (R-TX) began distributing a summary of changes for the reintroduction of the Financial CHOICE Act. The effort, sometimes referred to as the “CHOICE Act 2.0,” introduces several changes to the original legislation. The CSBS Examiner covered the first version of the bill in previous issues.
New provisions to the bill include that:
- Banks must only meet a 10% leverage ratio to gain relief via the capital election. Banks that meet a 10% leverage ratio are also entirely exempt from stress tests.
- The CFPB’s leadership will remain a sole directorship, removable at will – The CHOICE Act originally envisioned a five member, bipartisan commission as heading up the agency.
- The CFPB will no longer have supervisory authority, and its enforcement authority is limited to enumerated consumer protection laws. Additionally, the Bureau’s consumer complaint database will be made private.
- For rules with an impact of $100 million or more, financial agencies will be required to file a written statement explaining their process and evaluation and to select the most cost-effective, least burdensome alternative (unless explained otherwise).
- The bill will still propose repealing Chevron deference, but will delay implementation for two years after enactment of the CHOICE Act.
- Financial agencies required to minimize duplication between state and federal authorities in enforcement actions, determine when joint investigations and enforcement actions are appropriate, and designate a “lead agency” in joint investigations and enforcement actions.
- The Comptroller of the Currency and CFPB Director will no longer serve on the FDIC Board of Directors, but leaves in place the seat for a member with state bank supervisory experience.
- The bill will codify the “valid when made” doctrine, essentially overturning the Madden v. Midland ruling that limited interest rates of loans sold to non-banks.