Legislative Activity

This Week’s Hearings:

  • Tuesday, October 1: The Senate Banking Committee will hold a hearing titled “Housing Finance Reform: Fundamentals of a Functioning Private Label Mortgage Backed Securities Market.” This is the first in a series of eight hearings the committee will hold on specific aspects of the housing finance market, with the goal of introducing and marking up a housing finance reform bill by the year’s end.
  • Tuesday, October 1: The House Financial Services Subcommittee on Financial Institutions and Consumer Credit will hold a hearing titled “Examining Legislative Proposals to Reform the Consumer Financial Protection Bureau (CFPB).” This will be the fifth hearing the committee will hold related to CFPB oversight this year.
  • Wednesday, October 2: The Senate Banking Subcommittee on Economic Policy will hold a hearing titled “Rebuilding American Manufacturing.”
  • Wednesday, October 2: The House Agriculture Subcommittee on General Farm Commodities and Risk Management will hold a hearing titled “The Future of the CFTC: Perspectives on Customer Protections.” This is the third in a series of hearings held by the committee to examine the Commodity Futures Trading Commission (CFTC) as the committee prepares to reauthorize the regulatory body. Other hearings in the series have focused on the market, end-users, and the Commission itself. The CFTC’s authorizing legislation expires today; however, it can continue to operate even if lawmakers delay the reauthorization process. For example, the Commission operated for three years, from 2005 to 2008, without proper reauthorization language.
  • Wednesday, October 2: The House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law will hold a hearing titled “Dodd-Frank’s Impact on Competition in the Financial Industry” to examine how the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) has effected competitiveness in the financial services sector.

Regulatory Activity

SEF Rules to Take Effect on October 2

A new CFTC rule requiring market participants to trade certain over-the-counter (OTC) derivatives at swap executive facilities (SEFs), rather than privately, is set to go into effect on Wednesday, October 2. The CFTC has received numerous requests to extend the rule’s effective date by a few months and allow the industry more time to prepare. However, a spokesperson for the CFTC stated there would not be a “wholesale delay” of the October 2 effective date, and the Commission would review requests for no-action relief on a targeted case-by-case basis.

FHA Needs a Bailout

The Federal Housing Administration (FHA) announced it will need a “bailout” of $1.7 billion in taxpayer cash to cover a shortfall in its mortgage insurance fund. In April, the White House predicted the agency would face a $943 million shortfall for the current fiscal year. FHA Commissioner Carol Galante stated that the shortfall was higher than expected “because of a decline in FHA endorsement volume in the last few months of the fiscal year, consistent with the trend in the broader housing market in response to higher interest rates.”