More On Legal & Compliancefrom The Advisor's Professional Library
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The Inspectors General (IG) of the Treasury Department and the Federal Reserve Board have delivered a 34-page report to Rep. Spencer Bachus, R-Ala., the chairman of the House Financial Services Committee and Rep. Judy Biggert, R-Ill., the new chairman of the House Financial Services Committee’s Subcommittee on Insurance, Housing, and Community Opportunity, regarding the Treasury Department’s activities in establishing the CFPB.
Bachus and Biggert had sent a joint request on Nov. 22, 2010, to the IGs—Eric Thorson of Treasury and Elizabeth Coleman of the Fed—posing specific questions that they wanted answered regarding activities and issues related to the start-up of the CFPB, including transparency; the CFPB’s organization and structure; and the CFPB’s regulatory agenda.
Thorson and Coleman said that in preparing the report, “they reviewed the applicable sections of the Dodd- Frank Wall Street Reform and Consumer Protection Act and other relevant laws and requested, obtained, and reviewed relevant information and documentation from Treasury and the Board of Governors of the Federal Reserve System.” They also interviewed key Treasury officials.
The IGs gave responses regarding the CFPB’s policy priorities; its funding; which agencies and officials—such as the SEC and CFTC—that Warren has met with regarding implementation of Dodd-Frank; as well as a CFPB web site that will be set up by the end of January to accept public comments.
The following are some of the IGs’ responses:
- In accordance with its policy, on December 30, 2010, Treasury released information on Dodd-Frank implementation meetings that occurred during the month of November 2010. The disclosure included the names and affiliations of all non-Treasury participants and a list of primary discussion topics. As of the date of our letter, the disclosure is at www.treasury.gov/initiatives/wsr/Pages/DoddFrank.aspx. Also, in response to a Freedom of Information Act request, Treasury posted to its website Professor Warren’s schedule from September 20, 2010, through December 3, 2010. Treasury plans to continue to post Professor Warren’s schedule on a regular basis.
- The Treasury Secretary is not authorized to prescribe rules under the Bureau’s rulemaking authority prior to the designated transfer date (i.e., July 21, 2011).
- While the Treasury Secretary is not authorized to prescribe rules prior to the designated transfer date, Treasury is considering whether it will issue advance notices of proposed rulemaking (ANPRs), which according to Treasury, do not contain substantive rules, but are “a means of gathering information and input, before the transfer date.”
- The CFPB implementation team is using informal channels, including public forums and meetings with industry representatives, to collect information regarding the CFPB’s rulemaking considerations.
- The CFPB implementation team intends to include a page on the CFPB website (which is planned to be launched by the end of January 2011) where the public can provide its input on any number of topics relating to the CFPB.
- Professor Warren has provided the following examples of two policy initiatives that will receive priority: consolidating duplicate and overlapping mortgage disclosure forms mandated by the Truth in Lending Act and the Real Estate Settlement Procedures Act; and, simplifying credit card agreements to ensure that customers fully understand fees and finance charges.
- Thus far, the Bureau implementation team has made two requests to the Board for funds to support the activities to establish the Bureau – an initial request on August 11, 2010, for $18.4 million and a supplemental request on December 21, 2010, for $14.37 million. Treasury officials stated that it would currently be very difficult to estimate the total cost of establishing the Bureau because that activity will span several years. We were told that the Bureau implementation team currently has a draft budget for Fiscal Year (FY) 2011 and FY 2012, which will be included in the President’s FY 2012 budget request.