It has been a busy and productive 2016 here at Woodstock Institute. What follows is far from an exhaustive account of Woodstock’s policy and research activities over the year. It’s just a quick survey of some of the “greatest hits.”
1. Strong final prepaid rules were issued, and we saw the beginning of pre-rule activities for Dodd-Frank § 1071 on small business data collection
This year, the Consumer Financial Protection Bureau (CFPB) finalized consumer protections for users of prepaid debit cards, a first at the federal level. We were very pleased to see that the final rule reflected recommendations and research Woodstock offered along with partners from multiple states. Additionally, CFPB began work that will hopefully result in robust data collection on small business lending. Such a rule, once adopted, should greatly assist regulators and policymakers in confronting issues regarding access to credit and predatory lending.
2. Department of Labor finalized a strong fiduciary rule
We’ve already been talking about this a lot over the past year, and it represents one of our most lively avenues of recent advocacy. The Department of Labor’s fiduciary rule, which will begin to be implemented in April of 2017, protects the retirement savings of millions of consumers by establishing a conflict of interest standard for financial advisors. The rule is facing several court challenges and will likely face further attack from the incoming Trump administration. In 2017, defense of the rule will be a top priority.
3. Major Community Reinvestment Act agreements were made with Huntington Bank and Fifth Third Bank
Negotiations surrounding mergers and acquisitions have proved to be a highly productive aspect of our work this year. In 2016, prudential regulators at the Federal Reserve, FDIC, and Office of the Comptroller of the Currency (OCC) issued Community Reinvestment Act (CRA) guidance on retail financial services that is consistent with most of Woodstock’s recommendations, including the primacy of having full-service bank branches and ATMs in low- and moderate-income (LMI) areas. In collaboration with National Community Reinvestment Coalition (NCRC), Woodstock helped negotiate a $16.1 billion CRA agreement with Huntington Bank in connection with its acquisition of First Merit. Additionally, Woodstock persuaded the OCC to issue a conditional approval of MB Financial’s application to acquire American Chartered Bank, requiring MB Financial to create a CRA Plan with input from community leaders to address areas in which it had received a less than satisfactory rating in its last CRA exam and requires OCC’s non-objection to plans to open or close branches. Woodstock, NCRC, and Fifth Third Bank also negotiated a $30 billion CRA Plan.
4. Our progress on small business lending research and advocacy
Woodstock played a leading role this year in crafting the Illinois Small Business Lending Act, which was passed by the Illinois Senate Financial Institutions Committee. Woodstock published an Analysis of Business Loans made by fintech small business lenders and presented the findings at numerous forums, including an Illinois Senate Financial Institutions Committee subject matter hearing in Chicago, the Opportunity Finance Network’s Small Business Finance Forum, the FFIEC Consumer Compliance Conference, and a workshop at the NCRC conference in Washington, DC. In the coming year, we plan to publish reports on access to bank small business lending in eight major metropolitan areas in collaboration with our multi-state partners.
5. Amendments were made to the Illinois Wage Assignment Law
Finally, in collaboration with Illinois Asset Building Group, Woodstock helped pass amendments to the Illinois Wage Assignment Law. A wage assignment is a debt collection mechanism used by certain lenders, e.g., payday lenders. With a wage assignment, a lender can tap into a borrower’s paycheck without going to court. The amended law ensures that borrowers know that they can revoke the wage assignment at any time.
Thanks for staying posted. The coming year promises to be interesting on many fronts. We are optimistic that progress is achievable in many areas.