“This is one of the few laws that has been in place for five years that still has so many aspects that are not understood,” says Scott Daugherty, president and general counsel for Compliance
Alliance, “but one thing everyone continues to agree on are the frustrations that stem from the enactment of Dodd-Frank.”
Part of the frustration stems from the fact that only 235 (60.3 per cent) of the 390 total required rule changes have been finalized, while 84 (21.5 per cent) of requirements haven’t even been proposed yet, says Daugherty. The remainder of the frustration stems from the regulations that have been finalized.
“While the Senate banking committee is attempting to address some of the concerns in Dodd-Frank, we as bankers are more focused on what regulations may be issued next,” says Daugherty. “For those of us on the front lines of attempting to comply with all the new regulations that have been implemented, we would settle for our regulators who are authoring these new requirements to have a clearer understanding of the banking industry and the needs of our customers.”
As the birthday of Dodd-Frank approaches, the best news the industry has received is the proposal to push back the mandatory compliance with the TRID requirements to October. “But we also remain focused on the agenda of the CFPB,” says Daugherty, “including what restrictions will be placed on how the banks administer overdrafts.”
Besides overdrafts, the next item that keeps compliance officers awake at night is the anticipation of the release of the final HMDA rule. The CFPB has stated this final rule is expected in August.
Another big item on the CFPB’s agenda is pre-paid cards.
The CFPB states they are finalizing the proposal, first published in December 2014, which would create comprehensive consumer protections for a range of prepaid financial products, including general-purpose reloadable prepaid cards and certain digital and mobile wallets.
“Under the proposal,” says Daugherty, “prepaid accounts would receive certain protections that are similar to those that exist now for debit and payroll cards.”
The protections relate to:
- Error resolution;
- Limitations on liability when a card is lost or stolen; and
- The provision of information about account activity.
“The proposal also covered general credit card protections to prepaid products that access overdraft services or offer credit features for a fee,” says Daughtery. “Under the proposal, these products would be treated generally as credit cards under TILA and Regulation Z.”
The proposal would include:
- Requirements that creditors assess consumers’ ability to repay before extending them credit;
- Fee limitations in the first year of account opening;
- Certain rules regarding payment periods and processing; and
- Specific disclosures before a consumer acquires a prepaid account.
The final rule is expected in 2016.
“This birthday may be uneventful for some but, in the banking world,” says Daughtery, “Dodd-Frank continues to grow and slowly crank out the new requirements that are defining how we do business.”
Question and concerns are coming to the fore on the fifth anniversary of Dodd-Frank.