House Financial Services Committee Advances Eight Bills

The House Financial Services Committee this week approved eight bills, including several of interest to members of the Mortgage Bankers Association.

The bills range from protecting veterans’ credit and extending small bank examination cycles, both of which are MBA-supported and passed with bipartisan support. But while some of the bills marked out of committee tie in to the broader regulatory relief package, S. 2155, which passed the Senate last week, several remain out of the Senate bill’s sphere.

“These eight important measures continue the Committee’s efforts to ensure that hardworking Americans have access to credit; to ensure that the regulatory burden does not fall disproportionately on our smaller banks and credit unions; and to make sure that our startup businesses and our entrepreneurs have access to capital while balancing very legitimate concerns for the stability of our financial system,” said Committee Chairman Jeb Hensarling, R-Texas.

Bills reported out by the committee include:

H.R. 2683, the Protecting Veterans Credit Act of 2017

Introduced by Rep. John Delaney, D-Md., the bill amends the Fair Credit Reporting Act to exclude from consumer report information certain medical debt incurred by a veteran if the hospital care or medical services relating to the debt predates the credit report by less than one year; and a fully paid or settled veteran’s medical debt that had been characterized as delinquent, charged off, or in collection. It also establishes a dispute process for consumer reporting agencies with respect to such veterans’ medical debt.

The bill, supported by MBA, passed unanimously (59-0).

H.R. 5076, the Small Bank Exam Cycle Improvement Act of 2018

Introduced by Rep. Claudia Tenney, R-N.Y., the bill amends the Federal Deposit Insurance Act to increase the qualifying asset threshold for insured depository institutions eligible for 18-month on-site examination cycles from $1 billion to $3 billion. The bill, supported by MBA, passed 60-0; but MBA noted no companion legislation exists in S. 2155.

H.R. 4659  (no title)

The bill, introduced by Rep. Blaine Luetkemeyer, R-Mo., would require appropriate federal banking agencies to recognize the exposure-reducing nature of client margin for cleared derivatives. It would amend the Federal Deposit Insurance Act, the Bank Holding Company Act and the Home Owners’ Loan Act to allow for the supplementary leverage ratio to recognize the exposure-reducing effect of initial margin posted for centrally cleared derivatives. The bill passed 45-15.

H.R. 4790, the Volcker Rule Regulatory Harmonization Act

Introduced by Rep. French Hill, R-Ark., the bill amends Section 619 of the Dodd-Frank Act to streamline regulatory authority over the Volcker Rule by granting the Federal Reserve exclusive rulemaking authority and identifying the primary federal agency for the sole examination and enforcement authority over an entity. It also exempts community banks from the Volcker Rule if they do not have and are not controlled by an entity with $10 billion or more in total consolidated assets and total trading assets and trading liabilities that are more than 5 percent of total consolidated assets. The legislation is based on Section 901 of H.R. 10, the Financial CHOICE Act of 2017. The bill passed 50-10.

H.R. 4861, the Ensuring Quality Unbiased Access to Loans Act of 2017

Introduced by Rep. Trey Hollingsworth, R-Ind., the bill would repeal the Federal Deposit Insurance Corp.’s Guidance on Supervisory Concerns and Expectations Regarding Deposit Advance Products’ (78 Fed. Reg. 70552; November 26, 2013). It would also require federal banking agencies to each issue regulations, subject to notice and comment, to establish standards for short-term, small-dollar loans or lines of credit made available by insured depository institutions. The bill passed 34-26.

H.R. 5051, the Public Company Registration Act

Introduced by Rep. Sean Duffy, R-Wis., it amends section 12(g) of the Securities Exchange Act to raise the threshold for companies to register as a public reporting company with the Securities and Exchange Commission from 500 non-accredited investors to 2,000, with the $10 million threshold indexed for inflation. Additionally, the bill raises the threshold under section 12(g) for issuers to terminate a class of securities from 300 to 1,200 investors. It also amends section 15(d) of the Securities Exchange Act to raise the exemption from filing supplemental and periodic information with the SEC from 300 to 1,200 investors. The bill passed 34-26.

H.R. 5082, the Practice of Law Technical Clarification Act of 2018

Introduced by Rep. Alex Mooney, R-W.Va., the bill amends the Fair Debt Collection Practices Act to exclude from the definition of “debt collector” any law firm or licensed attorney engaged in litigation activities in connection with a legal action in a court of law to collect a debt on behalf of a client to the extent that such legal action is served on the defendant debtor or service is attempted, in accordance with the applicable statute or rules of civil procedure. The bill passed 35-25.

H.R. 5323, the Derivatives Fairness Act

Introduced by Rep. Warren Davidson, R-Ohio, the bill amends Title I of the Dodd-Frank Act to add a new section 177 entitled “Credit Valuation Adjustment.” It would exempt from the Credit Valuation Adjustment capital charge non-cleared derivatives with certain counterparties commonly described as “end-users.” The bill passed 34-26.