Reverse Mortgage Legislation Update: March 4, 2010

Yesterday the House of Representatives passed H.R. 2554, the National Association of Registered Agents and Brokers Reform Act of 2009. It amends the Gramm-Leach-Bliley Act to reestablish the National Association of Registered Agents and Brokers (NARAB) as a nonprofit organization “to prescribe, on a multi-state basis, licensing and insurance producer qualification requirements and conditions.” It establishes a central clearinghouse and requires a mandatory criminal background check for all state-licensed insurance producers.

The Financial Services Bill is back in the news this week. House Financial Services Committee Chairman Barney Frank (D-MA) said that he is willing to put the Consumer Financial Protection Agency (CFPA) under the authority of the Treasury Department, rather than as a standalone office. Senate Banking Committee Chairman Chris Dodd (D-CT) and Sen. Bob Corker (R-TN) meanwhile, have proposed placing the CFPA in the Federal Reserve, which Frank has opposed.

Meanwhile, the Obama administration released more details of the “Volcker Rule” on Wednesday. According to the rule, banks would not be permitted to engage in proprietary trading. Banks would face restrictions on their size, and non-financial firms would also face new capital restrictions. Financial firms would be prohibited from controlling more than 10% of the liabilities of the system, up from the current 10% cap on deposits. The rule has yet to be debated by Congress.

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In Florida, the Senate passed SB 1352 by 40-0 and the bill now moves to the House.

Finally, James H. Freis Jr., director of the Financial Crimes Enforcement Network (FinCEN), the arm of the Treasury that generally tracks drug money and terrorist funding, is investigating reverse mortgage fraud.

Written by Reva Minkoff

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