{ "id": "IN10769", "type": "CRS Insight", "typeId": "INSIGHTS", "number": "IN10769", "active": true, "source": "EveryCRSReport.com", "versions": [ { "source": "EveryCRSReport.com", "id": 578968, "date": "2018-03-07", "retrieved": "2018-05-10T11:10:39.543613", "title": "Financial Regulation: FY2018 Appropriations and the Financial CHOICE Act (H.R. 10)", "summary": "Background\nOn September 14, 2017, the House passed H.R. 3354, which included the FY2018 Financial Services and General Government (FSGG) Appropriations bill in Division D. The Senate Appropriations Committee released an FY2018 FSGG chairmen\u2019s mark on November 20, 2017, but further action has yet to occur on the bill. Much of the federal government, including agencies covered by FSGG appropriations, has been operating for the first part of FY2018 under successive continuing resolutions (P.L. 115-56, P.L. 115-90, P.L. 115-96, P.L. 115-120, and P.L. 115-123), now effective through March 23, 2018. \nAlthough financial services are a focus of the FSGG bill, the bill does not actually include funding for most of the financial service regulators. Instead, this funding comes through a variety of sources, including fees or assessments on regulated institutions. (See CRS Report R43391, Independence of Federal Financial Regulators: Structure, Funding, and Other Issues.)\nFederal regulation of the banking industry is divided among the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), the Office of Comptroller of the Currency (OCC), and the Consumer Financial Protection Bureau (CFPB). In addition, credit unions are regulated by the National Credit Union Administration (NCUA), and the housing government-sponsored enterprises are regulated by the Federal Housing Finance Agency (FHFA). None of these agencies receive their primary funding through the appropriations process.\nFederal securities regulation is divided between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), both of which are funded through appropriations bills. CFTC funding is appropriated from the general fund, whereas the SEC funding is offset through fees collected by the SEC. \nFinancial CHOICE Act Provisions\nAlthough funding may not be provided by the FSGG bill, legislative provisions affecting financial regulation in general and some financial regulatory agencies specifically have often been included in FSGG bills.\nThe provisions in Titles IX and X of H.R. 3354 (Division D) are identical, or nearly identical, to some sections in the Financial CHOICE Act (H.R. 10), which passed the House on June 8, 2017. (For more information, see CRS Report R44839, The Financial CHOICE Act in the 115th Congress: Selected Policy Issues.) Many of these provisions would amend the 2010 Dodd-Frank Act. H.R. 10, however, contained a much broader range of provisions than H.R. 3354. The Senate FSGG mark has few similar provisions, although it would put the CFPB under the regular appropriations process. \nTable 1 below contains a listing of the sections from H.R. 3354 and the corresponding sections of H.R. 10. In addition to several provisions providing regulatory relief in banking and securities markets, policy changes in the FSGG bill include the following:\nSIFI Designation. Dodd-Frank applied enhanced prudential regulation to nonbank financial firms if they are designated as systemically important financial institutions (SIFIs) by the Financial Stability Oversight Council (FSOC). H.R. 3354 would repeal FSOC\u2019s ability to designate nonbank financial firms for enhanced regulation.\nOFR. Dodd-Frank created the Office of Financial Research (OFR) to provide research support to FSOC. H.R. 3354 would eliminate OFR.\nAppropriations. As mentioned above, aside from the SEC and CFTC, most financial regulators determine their own budgets and assess fees to cover expenditures. H.R. 3354 as passed would bring the remaining financial regulators except for the NCUA\u2014the FDIC, OCC, Fed, CFPB, and FHFA\u2014as well as FSOC into the appropriations process. The Fed\u2019s spending related to monetary policy and the FDIC\u2019s deposit insurance fund would remain outside of the appropriations process. Fees and assessments that agencies currently collect to fund themselves would typically appear as offsetting collections.\nCFPB. In addition to the funding changes, H.R. 3354 would repeal the CFPB\u2019s supervisory authority and its authority to regulate small dollar credit (e.g., payday loans); unfair, deceptive, or abusive acts and practices (UDAAP); and arbitration agreements in financial products.\nRisk Retention. H.R. 3354 would amend the provision of the Dodd-Frank Act mandating risk retention rules by applying those requirements only to securities that are wholly composed of residential mortgages. Securities backed by assets that are not residential mortgages\u2014such as commercial real estate mortgages, commercial loans, auto loans, or other types of debt\u2014would not be subject to the risk retention rule.\nVolcker Rule. The Volcker Rule from Dodd-Frank prohibits banks from proprietary trading of \u201crisky\u201d assets and from \u201ccertain relationships\u201d with risky investment funds, including acquiring or retaining \u201cany equity, partnership, or other ownership interest in or sponsor[ing] a hedge fund or a private equity fund.\u201d H.R. 3354 would repeal the Volcker Rule.\nBankruptcy for Financial Institutions. H.R. 3354 would add a new subchapter to the Bankruptcy Code designed specifically to handle the failure of certain financial firms. \nTable 1. Provisions of the Financial CHOICE Act in H.R. 3354\nTopic\nH.R. 3354, Division D\nH.R. 10\n\nRepeals rules whose authority is eliminated by bill\nSection 902\nSection 2\n\nRepeals various Financial Stability Act provisions\nSection 903\nSection 151\n\nBrings financial regulators under appropriations \n(except NCUA due to H.Amdt. 443). Sections 904-907; Section 925Title III, Subtitle E; Section 712\nDisclosuresSection 908Section 426\nSection 31 feesSection 909Section 416\n\nInvestment fund research\nSection 910\nSection 421\n\nGovernment-business forum on capital formation\nSection 911\nSection 446\n\nAngel investors\nSection 912\nSections 451-452\n\nVenture capital funds\nSection 913\nSection 471\n\nManufactured housing\nSection 914\nSections 501-502\n\nDeposit account termination\nSection 915\nSection 511\n\nFIRREA amendments\nSection 916\nSection 512\n\nLoans held in portfolio\nSection 917\nSection 516\n\nSmall bank holding company policy\nSection 918\nSection 526\n\nCommunity Institution Mortgage Relief\nSection 919\nSection 531\n\nRegulations appropriate to business models\nSection 920\nSection 546\n\nJobs for loan originators\nSection 921\nSection 556\n\nSmall business loan data\nSection 922\nSection 561\n\nDepository institution records and disclosure\nSection 923\nSection 576\n\nInterest rate after loan transfer\nSection 924\nSection 581\n\nCFBP authority and budget changes\nSections 925-929\nSections 712, 727, 733, 735, 737\n\nNonresidential risk retention\nSection 930\nSection 842\n\nProhibition in single ballot\nSection 931\nSection 845\n\nVolcker Rule repeal\nSection 932\nSection 901\n\nFinancial institution bankruptcy\nTitle X\nSection 121-123\n\nSource: Congressional Research Service.\nOther provisions related to financial regulation include Section 114 of Division A, which would repeal the Department of Labor\u2019s 2016 Fiduciary Rule, and H.Amdt. 441, which would prohibit the use of appropriated funds toward enforcing the SEC\u2019s conflict minerals rule.", "type": "CRS Insight", "typeId": "INSIGHTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/IN10769", "sha1": "f286b4e4d0e6f9b47fb974a7816e08509dc0eb6d", "filename": "files/20180307_IN10769_f286b4e4d0e6f9b47fb974a7816e08509dc0eb6d.html", "images": {} } ], "topics": [ { "source": "IBCList", "id": 4895, "name": "Financial Services & General Government Appropriations" } ] }, { "source": "EveryCRSReport.com", "id": 576251, "date": "2017-12-07", "retrieved": "2017-12-12T14:17:21.755961", "title": "Financial Regulation: FY2018 Appropriations and the Financial CHOICE Act (H.R. 10)", "summary": "Background\nOn September 14, 2017, the House passed H.R. 3354, which included the FY2018 Financial Services and General Government (FSGG) Appropriations bill in Division D. The Senate Appropriations Committee released an FY2018 FSGG chairmen\u2019s mark on November 20, 2017, but further action has yet to occur on the bill. Much of the federal government, including agencies covered by FSGG appropriations, has been operating for the first part of FY2018 under a continuing resolution effective through December 8, 2017. \nAlthough financial services are a focus of the FSGG bill, the bill does not actually include funding for most of the financial service regulators. Instead, this funding comes through a variety of sources, including fees or assessments on regulated institutions. (See CRS Report R43391, Independence of Federal Financial Regulators: Structure, Funding, and Other Issues.)\nFederal regulation of the banking industry is divided among the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), the Office of Comptroller of the Currency (OCC), and the Consumer Financial Protection Bureau (CFPB). In addition, credit unions are regulated by the National Credit Union Administration (NCUA), and the housing government-sponsored enterprises are regulated by the Federal Housing Finance Agency (FHFA). None of these agencies receive their primary funding through the appropriations process.\nFederal securities regulation is divided between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), both of which are funded through appropriations bills. CFTC funding is appropriated from the general fund, whereas the SEC funding is offset through fees collected by the SEC. \nFinancial CHOICE Act Provisions\nAlthough funding may not be provided by the FSGG bill, legislative provisions affecting financial regulation in general and some financial regulatory agencies specifically have often been included in FSGG bills.\nThe provisions in Titles IX and X of H.R. 3354 (Division D) are identical, or nearly identical, to some sections in the Financial CHOICE Act (H.R. 10), which passed the House on June 8, 2017. (For more information, see CRS Report R44839, The Financial CHOICE Act in the 115th Congress: Selected Policy Issues.) Many of these provisions would amend the 2010 Dodd-Frank Act. H.R. 10, however, contained a much broader range of provisions than H.R. 3354. The Senate FSGG mark has few similar provisions, although it would put the CFPB under the regular appropriations process. \nTable 1 below contains a listing of the sections from H.R. 3354 and the corresponding sections of H.R. 10. In addition to several provisions providing regulatory relief in banking and securities markets, policy changes in the FSGG bill include the following:\nSIFI Designation. Dodd-Frank applied enhanced prudential regulation to nonbank financial firms if they are designated as systemically important financial institutions (SIFIs) by the Financial Stability Oversight Council (FSOC). H.R. 3354 would repeal FSOC\u2019s ability to designate nonbank financial firms for enhanced regulation.\nOFR. Dodd-Frank created the Office of Financial Research (OFR) to provide research support to FSOC. H.R. 3354 would eliminate OFR.\nAppropriations. As mentioned above, aside from the SEC and CFTC, most financial regulators determine their own budgets and assess fees to cover expenditures. H.R. 3354 as passed would bring the remaining financial regulators except for the NCUA\u2014the FDIC, OCC, Fed, CFPB, and FHFA\u2014as well as FSOC into the appropriations process. The Fed\u2019s spending related to monetary policy and the FDIC\u2019s deposit insurance fund would remain outside of the appropriations process. Fees and assessments that agencies currently collect to fund themselves would typically appear as offsetting collections.\nCFPB. In addition to the funding changes, H.R. 3354 would repeal the CFPB\u2019s supervisory authority and its authority to regulate small dollar credit (e.g., payday loans); unfair, deceptive, or abusive acts and practices (UDAAP); and arbitration agreements in financial products.\nRisk Retention. H.R. 3354 would amend the provision of the Dodd-Frank Act mandating risk retention rules by applying those requirements only to securities that are wholly composed of residential mortgages. Securities backed by assets that are not residential mortgages\u2014such as commercial real estate mortgages, commercial loans, auto loans, or other types of debt\u2014would not be subject to the risk retention rule.\nVolcker Rule. The Volcker Rule from Dodd-Frank prohibits banks from proprietary trading of \u201crisky\u201d assets and from \u201ccertain relationships\u201d with risky investment funds, including acquiring or retaining \u201cany equity, partnership, or other ownership interest in or sponsor[ing] a hedge fund or a private equity fund.\u201d H.R. 3354 would repeal the Volcker Rule.\nBankruptcy for Financial Institutions. H.R. 3354 would add a new subchapter to the Bankruptcy Code designed specifically to handle the failure of certain financial firms. \nTable 1. Provisions of the Financial CHOICE Act in H.R. 3354\nTopic\nH.R. 3354, Division D\nH.R. 10\n\nRepeals rules whose authority is eliminated by bill\nSection 902\nSection 2\n\nRepeals various Financial Stability Act provisions\nSection 903\nSection 151\n\nBrings financial regulators under appropriations \n(except NCUA due to H.Amdt. 443). \nSections 904-908; Section 926\nTitle III, Subtitle E; Section 712\n\nDisclosures\nSection 909\nSection 426\n\nSection 31 fees\nSection 910\nSection 416\n\nInvestment fund research\nSection 911\nSection 421\n\nGovernment-business forum on capital formation\nSection 912\nSection 446\n\nAngel investors\nSection 913\nSections 451-452\n\nVenture capital funds\nSection 914\nSection 471\n\nManufactured housing\nSection 915\nSections 501-502\n\nDeposit account termination\nSection 916\nSection 511\n\nFIRREA amendments\nSection 917\nSection 512\n\nLoans held in portfolio\nSection 918\nSection 516\n\nSmall bank holding company policy\nSection 919\nSection 526\n\nCommunity Institution Mortgage Relief\nSection 920\nSection 531\n\nRegulations appropriate to business models\nSection 921\nSection 546\n\nJobs for loan originators\nSection 922\nSection 556\n\nSmall business loan data\nSection 923\nSection 561\n\nDepository institution records and disclosure\nSection 924\nSection 576\n\nInterest rate after loan transfer\nSection 925\nSection 581\n\nCFBP authority and budget changes\nSections 926-930\nSections 712, 727, 733, 735, 737\n\nNonresidential risk retention\nSection 931\nSection 842\n\nProhibition in single ballot\nSection 932\nSection 845\n\nVolcker Rule repeal\nSection 933\nSection 901\n\nFinancial institution bankruptcy\nTitle X\nSection 121-123\n\nSource: CRS\nOther provisions related to financial regulation include Section 114 of Division A, which would repeal the Department of Labor\u2019s 2016 Fiduciary Rule, and H.Amdt. 441, which would prohibit the use of appropriated funds toward enforcing the SEC\u2019s conflict minerals rule.", "type": "CRS Insight", "typeId": "INSIGHTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/IN10769", "sha1": "1107b96dd000704dfb30928669c157edd89c2dd2", "filename": "files/20171207_IN10769_1107b96dd000704dfb30928669c157edd89c2dd2.html", "images": {} } ], "topics": [ { "source": "IBCList", "id": 4895, "name": "Financial Services & General Government Appropriations" } ] }, { "source": "EveryCRSReport.com", "id": 465511, "date": "2017-09-14", "retrieved": "2017-10-02T22:27:00.295436", "title": "Financial Regulation: FY2018 Appropriations and the Financial CHOICE Act (H.R. 10)", "summary": "Background\nOn September 14, 2017, the House passed the remaining FY2018 appropriations bills as H.R. 3354, which included the Financial Services and General Government (FSGG) Appropriations bill (H.R. 3280) in Division D. An FY2018 FSGG bill has not yet been introduced in the Senate.\nAlthough financial services are a focus of the FSGG bill, the bill does not actually include funding for most of the financial service regulators. Instead, this funding comes through a variety of sources, including fees or assessments on regulated institutions. (See CRS Report R43391, Independence of Federal Financial Regulators: Structure, Funding, and Other Issues.)\nFederal regulation of the banking industry is divided among the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), the Office of Comptroller of the Currency (OCC), and the Consumer Financial Protection Bureau (CFPB). In addition, credit unions are regulated by the National Credit Union Administration (NCUA), and the housing government-sponsored enterprises are regulated by the Federal Housing Finance Agency (FHFA). None of these agencies receive their primary funding through the appropriations process.\nFederal securities regulation is divided between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), both of which are funded through appropriations. CFTC appropriations from the general fund are set in FSGG bill in the Senate and the Agriculture bill in the House, whereas the SEC funding is set in the FSGG bill in both, but then offset through fees collected by the SEC. \nFinancial CHOICE Act Provisions\nAlthough funding for many financial regulatory agencies may not be provided by the FSGG bill, legislative provisions affecting financial regulation in general and some of these agencies specifically have often been included in FSGG bills.\nThe provisions in Titles IX and X of H.R. 3354 (Division D) are identical, or nearly identical, to some sections in the Financial CHOICE Act (H.R. 10), which passed the House on June 8, 2017. (For more information, see CRS Report R44839, The Financial CHOICE Act in the 115th Congress: Selected Policy Issues.) Many of these provisions would amend the 2010 Dodd-Frank Act. H.R. 10, however, contained a much broader range of provisions than H.R. 3354. \nTable 1 below contains a listing of the sections from H.R. 3354 and the corresponding sections of H.R. 10. In addition to several provisions providing regulatory relief in banking and securities markets, policy changes in the FSGG bill include the following:\nSIFI Designation. Dodd-Frank applied enhanced prudential regulation to nonbank financial firms if they are designated as systemically important financial institutions (SIFIs) by the Financial Stability Oversight Council (FSOC). H.R. 3354 would repeal FSOC\u2019s ability to designate nonbank financial firms for enhanced regulation.\nOFR. Dodd-Frank created the Office of Financial Research (OFR) to provide research support to FSOC. H.R. 3354 would eliminate OFR.\nAppropriations. As mentioned above, aside from the SEC and CFTC, most financial regulators determine their own budgets and assess fees to cover expenditures. H.R. 3354 as amended would bring the remaining financial regulators except for the NCUA\u2014the FDIC, OCC, Fed, CFPB, and FHFA\u2014as well as FSOC into the appropriations process. The Fed\u2019s spending related to monetary policy and the FDIC\u2019s deposit insurance fund would remain outside of the appropriations process. Fees and assessments that agencies currently collect to fund themselves would typically appear as offsetting collections in the federal budget.\nCFPB. In addition to the funding changes, H.R. 3354 would repeal the CFPB\u2019s supervisory authority and its authority to regulate small dollar credit (e.g., payday loans); unfair, deceptive, or abusive acts and practices (UDAAP); and arbitration agreements in financial products.\nRisk Retention. H.R. 3354 would amend the provision of the Dodd-Frank Act mandating risk retention rules by applying those requirements only to securities that are wholly composed of residential mortgages. Securities backed by assets that are not residential mortgages\u2014such as commercial real estate mortgages, commercial loans, auto loans, or other types of debt\u2014would not be subject to the risk retention rule.\nVolcker Rule. The Volcker Rule from Dodd-Frank prohibits banks from proprietary trading of \u201crisky\u201d assets and from \u201ccertain relationships\u201d with risky investment funds, including acquiring or retaining \u201cany equity, partnership, or other ownership interest in or sponsor[ing] a hedge fund or a private equity fund.\u201d H.R. 3354 would repeal the Volcker Rule.\nBankruptcy for Financial Institutions. H.R. 3354 would add a new subchapter to the Bankruptcy Code designed specifically to handle the arguably unique characteristics associated with the failure of certain financial firms. \nTable 1. Provisions of the Financial CHOICE Act in H.R. 3354\nTopic\nH.R. 3354, Division D\nH.R. 10\n\nRepeals rules whose authority is eliminated by bill\nSection 902\nSection 2\n\nRepeals various Financial Stability Act provisions\nSection 903\nSection 151\n\nBrings financial regulators under appropriations \n(except NCUA due to H.Amdt. 443). \nSections 904-908; Section 926\nTitle III, Subtitle E; Section 712\n\nDisclosures\nSection 909\nSection 426\n\nSection 31 fees\nSection 910\nSection 416\n\nInvestment fund research\nSection 911\nSection 421\n\nGovernment-business forum on capital formation\nSection 912\nSection 446\n\nAngel investors\nSection 913\nSections 451-452\n\nVenture capital funds\nSection 914\nSection 471\n\nManufactured housing\nSection 915\nSections 501-502\n\nDeposit account termination\nSection 916\nSection 511\n\nFIRREA amendments\nSection 917\nSection 512\n\nLoans held in portfolio\nSection 918\nSection 516\n\nSmall bank holding company policy\nSection 919\nSection 526\n\nCommunity Institution Mortgage Relief\nSection 920\nSection 531\n\nRegulations appropriate to business models\nSection 921\nSection 546\n\nJobs for loan originators\nSection 922\nSection 556\n\nSmall business loan data\nSection 923\nSection 561\n\nDepository institution records and disclosure\nSection 924\nSection 576\n\nInterest rate after loan transfer\nSection 925\nSection 581\n\nCFBP authority and budget changes\nSections 926-930\nSections 712, 727, 733, 735, 737\n\nNonresidential risk retention\nSection 931\nSection 842\n\nProhibition in single ballot\nSection 932\nSection 845\n\nVolcker Rule repeal\nSection 933\nSection 901\n\nFinancial institution bankruptcy\nTitle X\nSection 121-123\n\nSource: CRS\nOther provisions related to financial regulation include Section 114 of Division A, which would repeal the Department of Labor\u2019s 2016 Fiduciary Rule, and H.Amdt. 441, which would prohibit the use of appropriated funds toward enforcing the SEC\u2019s conflict minerals rule.", "type": "CRS Insight", "typeId": "INSIGHTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/IN10769", "sha1": "a7b8416ff8091af48ff932b9dc14a6e0c4265005", "filename": "files/20170914_IN10769_a7b8416ff8091af48ff932b9dc14a6e0c4265005.html", "images": {} } ], "topics": [ { "source": "IBCList", "id": 4895, "name": "Financial Services & General Government Appropriations" } ] } ], "topics": [ "Appropriations", "CRS Insights", "Economic Policy" ] }