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23 » VISIT US ONLINE @ DSNEWS.COM WHY DID NEARLY ONE THIRD OF HOUSE DEMOCRATS VOTE TO OPPOSE THE CFPB? When it comes to the Consumer Financial Protection Bureau (CFPB), Democratic and Re- publican lawmakers are generally sharply divided with Democrats vigorously defending the bureau or any action it takes. So why did 64 Democrats—about a third of the 188 Democrats in the U.S. House of Representatives—vote in favor of H.R. 3192, the Homebuyers Assistance Act, to implement a formal grace period until February 1, 2016, for compliance with the CFPB's TILA-RESPA Integrated Disclosure (TRID) rule? Even the White House issued a statement saying that the president was advised to veto the bill if it reaches his desk. Perhaps the amount of consternation and even "angst," as CFPB Director Richard Cordray put it in his testimony before Congress on September 29, expressed by those who work in the mortgage industry over whether they could be fully compliant with TRID in time for the October 3 effective date generated some sympathy among Democratic lawmakers and motivated them to vote in favor of the formal grace period. at was the case with Rep. Brad Sherman (D-California), co-sponsor of H.R. 3192 along with Rep. French Hill (R-Arkansas). "ese new forms and regulations are complicated," Sherman said. "Smaller lenders and title companies are complying in good faith with a 1,888 page regulation that is only now being tested in real life home closings. e Hill- Sherman bill tells these smaller lender, title, and escrow companies to implement the new forms immediately. However, if they act in good faith but make unintentional mistakes, they will not be subject to retribution for those mistakes made prior to February 1, 2016." e Obama administration, which created the CFPB out of the Dodd-Frank Act four years ago, has been fiercely protective of the bureau and has fought repeated efforts by Republicans to reform the CFPB. e White House issued a statement saying it believes it was unnecessary to announce a formal grace period for TRID. "e CFPB has already clearly stated that initial examinations will evaluate good faith efforts by lenders," the White House wrote. "e Administration strongly opposes H.R. 3192, as it would unnecessarily delay implementation of im- portant consumer protections designed to eradi- cate opaque lending practices that contribute to risky mortgages, hurt homeowners by removing the private right of action for violations, and undercut the Nation's financial stability." Both Sherman and Rep. John Garamendi (D-California), who voted in favor of the bill, noted that smaller lenders generally do not have the resources in place to quickly comply with the new regulations. A spokesperson for Garamendi told DS News the Congressman voted in favor of H.R. 3192 "because the bill simply codifies the CFPB's announced policy regarding enforce- ment. Secondly, while bigger servicers may have the capability to make such an immediate transi- tion, smaller servicers may not have the resourc- es. He believed the bill provides an adequate grace period, and Congressman Garamendi had them in mind when making his decision." Sherman questioned Cordray on the issue of a possible grace period, or "hold harmless" pe- riod, for TRID compliance during the director's testimony before Congress in late September. In that hearing, Sherman likened the TRID rule to building a new ship, saying no matter how much time is spent at the dock, the builder is not finished building the ship until it's taken on a "shakedown cruise," or a test run. e shake- down cruise began on October 3, however, since the new regulations and integrated forms could not be applied prior to the TRID effective date. Cordray said on multiple occasions the CFPB would be lenient with those making a good faith effort to comply with TRID, though he stead- fastly refused to say for how long after the rule took effect the grace period would last. In that Congressional hearing on September 29, Sher- man asked the director if he would be willing to announce a three-month hold harmless period for those making a good faith effort to comply. Cordray responded that he was "pushing hard" to make an announcement along the lines of what Sherman was asking for before October 3. When no such announcement came, Con- gress took the matter into its own hands, fueled by House Majority Leader Kevin McCarthy (R-California) and quickly voted to pass H.R. 3192. e bill passed by a vote of 303 to 121 with bipartisan support—239 Republicans and 64 Democrats voted in favor. All 121 who voted nay were Democrats. Ten representatives (seven Re- publicans, three Democrats) did not vote; every Republican who voted chose to vote in favor of the bill's passage. SENATOR BROWN TO BIG BANKS: 'GIVE ME MORE INFO' Sen. Sherrod Brown (D-Ohio), ranking member of the Senate Banking Committee, wrote a letter to more than a dozen big banks and investment banking firms requesting more information on settlements they entered into with 15 government enforcement agencies since January 1, 2005. Brown wants to know if the banks are in compliance with their respective settlements and asked for information regarding the banks' compliance procedures, particularly those initiated after the settlements; the amount of legal fees the banks paid; any sanctions imposed along with the names and positions of employees on which sanctions were imposed; and any non-public agreements the banks made with government enforcement agencies. "[A]t my direction as ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, the Minority staff is reviewing issues related to the compliance with, and enforcement of, laws, statutes, regulations, and rules governing the operations of financial institutions," Brown wrote in the letter, which was dated September 30, 2015. e recipients of the letters were not made public, but citing a "person familiar with the matter," Bloomberg said the recipients included JPMorgan Chase, Citigroup, Morgan Stanley, Goldman Sachs, Bank of America, Credit Suisse, and Deutsche Bank. Several of these institutions entered into multi- billion dollar settlements with the government for their roles in the mortgage meltdown and financial crisis, notably JPMorgan Chase ($13 billion in November 2013), Citi ($7 billion in July 2014), and Bank of America ($16.65 billion in August 2014). ese institutions are regularly checked by independent monitors to ensure they are complying with the terms of their respective settlements. Brown listed his staff investigator Bob Roach as the contact for the letter recipients, which may be troubling to the banks since Roach is known for his investigations on such firms as Goldman Sachs and Deutsche Bank as a member of the Senate Permanent Subcommittee on Investigations, according to reports. Despite using the Senate Banking Committee letterhead, a spokesperson for the committee said Brown's letter was not sanctioned by the committee. e letter was not signed by Committee Chairman Richard Shelby (R-Alabama).

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