NACHA Government Relations Update - Nov. 30, 2017

Posted November, 29 2017

Battle Over CFPB
Richard Cordray resigned as CFPB Director Friday, Nov. 24 and designated his Chief of Staff, Leandra English, as his temporary replacement, sparking a legal showdown with the White House over who will run the agency. At about the same time on Friday, President Trump designated Mick Mulvaney, who heads the Office of Management and Budget, to lead the bureau until a permanent Director could be nominated and confirmed.

On Sunday night, English filed a lawsuit in the U.S. District Court of D.C. in which she called herself the “rightful Acting Director” of the CFPB and asked for a temporary restraining order to prevent Mulvaney from being recognized as Director. This was filed after CFPB General Counsel, Mary McLeod, published a memo siding with Trump, saying the President had the legal authority to name an Acting Director to the bureau under the Federal Vacancies Reform Act. The lawsuit says “The President’s purported or intended appointment of defendant Mulvaney as Acting Director of the CFPB is unlawful.”

Otting Officially Comptroller of the Currency
On Nov. 27, 2017, Joseph M. Otting became the 31st Comptroller of the Currency, after being sworn into office by Secretary of the Treasury Steven T. Mnuchin and being confirmed by the U.S. Senate on Nov. 16, 2017.

Janet Yellen Stepping Down from the Federal Reserve System’s Board of Governors
On Nov. 20, 2017, Dr. Janet L. Yellen submitted her letter of resignation from her position as a Member of the Federal Reserve System’s Board of Governors, to be effective upon the swearing in of Jerome H. Powell as her successor for Chair.
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Treasury Recommends Changes to FSOC SIFI Designations
On Nov. 17, 2017, the U.S. Department of the Treasury released a report and fact sheet outlining proposed changes that would overhaul the way in which the Financial Stability Oversight Council (FSOC) addresses systemic risks, recommending a heavier focus on industry activities instead of individual firms. In the report (prompted by an April request by President Trump to review the council’s operations) Treasury called the FSOC’s authority to have the Federal Reserve oversee "systemically important financial institutions" (SIFIs) a “blunt instrument” for dealing with financial stability risk. The department recommended that rather than this way, the council should switch to an "activities-based or industry-wide approach." The report also recommended other various changes regarding the council’s targeting of companies that may require greater oversight, stating that designated companies should be provided with a clear “off-ramp” and that the FSOC should be more transparent in its annual reevaluation process of companies marked as being systemically important.

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