Dozens of Obama Administration Financial Rules that Republicans May Kill

By , and Joel Schectman | November 22, 2016

In recent days Republican Congressional leaders have taken several opportunities to warn Obama Administration regulators not to finish any more rulemakings, but some agency heads, such as U.S. Securities and Exchange Commission Chair Mary Jo White, say they are proceeding with their agendas.

By law, Congress already can vote to disapprove of regulations within 60 legislative days of them becoming final. Because of the congressional calendar and other technicalities, regulations made final as far back as mid-May 2016 may be open for rollback once the new administration of Republican President-elect Donald Trump begins.

Here are some noteworthy financial rules that have become final in recent months and could be overturned, or that are pending – awaiting final action which could come between now and Inauguration Day on Jan. 20, 2017.

CONSUMER FINANCIAL PROTECTION BUREAU

Prepaid cards. Intended to help customers understand accounts and avoid fees and charges through clearer disclosures. The industry has criticized the final rules for, among other things, the short implementation time frame.

Mandatory arbitration clauses in contracts, pending. This proposal would end the fine print forcing customers to take any potential disputes to arbitration instead of suing. A controversial rule that has raised the ire of members of Congress.

Payday lending, pending. Long-awaited rule on emergency, short-term cash loans that Republicans have criticized.

Debt collection, pending. Complements the Fair Debt Collection Practices Act to ensure collectors provide correct information, check debts are outstanding, and contact the right debtor.

TREASURY DEPARTMENT

Due diligence. Mandates that financial institutions learn the true identity of account holders, even if they are obscured by shell companies.

OFFICE OF THE COMPTROLLER OF THE CURRENCY

Receivership for uninsured banks, pending. Would set terms for dissolving trust banks and lenders that do not rely on consumer deposits that have a guarantee from the Federal Deposit Insurance Corp.

FEDERAL DEPOSIT INSURANCE CORP

Executive compensation, pending. Bankers would get less short-term payouts and have more of their compensation tied to the long-term health of their firm; banks could claw back executive pay earned via malfeasance. This rule needs several banking agencies’ approval to get done.

NATIONAL CREDIT UNION ADMINISTRATION

Expanding membership. In October, the regulator expanded the number of consumers that are eligible to qualify as savers with the not-for-profit lenders.

SECURITIES AND EXCHANGE COMMISSION

Dodd Frank. The SEC has yet to finish more than a dozen regulations required by the 2010 Wall Street reform legislation. Among those rules are those that would govern private funds, swaps and compensation.

Mutual funds. Liquidity rules intended to protect investors from a sudden sell-off were approved in October. Rules on electronic disclosure and funds’ use of derivatives were expected before the end of the year. Republicans have pushed for the final disclosure rule, while leveraged funds have been anxious about the derivatives one.

Consolidated audit trail. A database tracking equity and options trades that was approved after the election.

Routing, pending. Broker-dealers would be required to post information on how they route large investors’ trading orders.

Transition plans, pending. Investment advisers must put in place business continuity and transition plans for how they would minimize material disruptions in the event of a larger disturbance such as a natural disaster or cyber attack.

Derivatives, pending. Exchanges, swap-execution facilities and clearing agencies would have to report swaps and clearing agencies would have to report whether they do not accept a transaction.

COMMODITY FUTURES TRADING COMMISSION

Automated trading, pending. Recently re-proposed rules on high-frequency trading that relies on algorithms and other software.

Position limits, pending. A rule limiting the positions that traders can hold in the commodity markets that is expected to be finalized before year end, and that some Republicans have criticized.

Uncleared swaps margin. Applies to swaps traded outside of clearinghouses and that cross national boundaries; was approved in late May.

Cybersecurity. Requiring commodities and derivatives firms to frequently test their information technology for vulnerabilities.

FEDERAL RESERVE

The Federal Reserve, an independent government agency, does not face personnel changes between administrations, and has several rules governing Wall Street that are due to be finalized in the months ahead.

Long-term debt, pending. To shield large banks at time of market turmoil, leading firms will have to hold more capital in some circumstances under a rule proposed in October 2015.

Single-counterparty credit limit, pending. Proposed in March, the rule would limit the amount of business any two leading Wall Street firms can do with one another.

Net Stable Funding Ratio, pending. The plan outlined in May will boost the amount of capital that the largest banks must hold to weather a financial shock.

Physical commodity capital rules, pending. Wall Street banks that hold commodity investments would have to hold more capital under a plan outlined in September.

(Reporting By Patrick Rucker, Lisa Lambert and Joel Schechtman; editing by Linda Stern and Phil Berlowitz)

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