Regulation Roundup

CFPB Legal Battle, Amid Succession Drama, Continues

And the (legal) beat went on.

The drama surrounding the Consumer Financial Protection Bureau (CFPB) continues – and did anybody think it would be otherwise?

The latest news is still centered on succession, namely that current acting director Leandra English is set on challenging Mick Mulvaney’s appointment to the role by President Donald Trump. The latter had been named to the position by Trump on Nov. 24, after outgoing head Richard Cordray had left the Bureau and named English as his successor, setting the stage for the showdown.

Reuters reported that English said via court filing this past Friday (Dec. 1) that she will seek a preliminary injunction against Mulvaney and the administration itself by tomorrow, Dec. 5.  The ascension of Mulvaney got a boost last week, when a federal judge refused to block his appointment.

In the meantime, and across the pond, PSD2-related news finds a bit of an extension for banks, as financial firms now have an additional 18 months to meet security standards that are part and parcel of the legislation. Various media outlets have stated that the show will go on for PSD2 as planned, meaning the official transition will still take place in January. As noted by CBROnline.com, the European Commission has stated that banks have a bit more time to adopt the standards.

Those standards relate to tougher security practices and the end of screen scraping – which the Commission has said will be actionable 18 months after the technical standards are published in the EU’s official journal, which is slated for September of 2019. The EU stated via release that “this means that the PSD2 provisions on strong customer authentication and on secure communication, which are directly specified in the RTS, will not apply immediately.” As has been noted, passwords or credit card information will no longer be enough to make payments.

Separately, Jerome Powell, tapped by Trump as the next chair of the Federal Reserve, at his confirmation hearing at the end of last month said that a bank regulation (via the Dodd-Frank Act) rollback may be in order, but also stated that he will protect the Fed’s political independence. Amid those statements, the Fed is also poised to boost interest rates and trim a balance sheet that has ballooned to $4.5 trillion, bringing it down by as much as $3 trillion over four years.

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