Bill Introduced in Congress to Make “Valid When Made” the Law of the Land


Chief Deputy Whip Patrick McHenry (R, NC-10), the Vice Chairman of the House Financial Services Committee, introduced H.R. 5724, the Protecting Consumers’ Access to Credit Act of 2016, which would reaffirm the longstanding legal precedent under the National Bank Act and the Federal Deposit Insurance Act that federal law preempts a loan’s interest if valid when made. The legislation was introduced to address one of the issues raised by the Second Circuit in Madden vs. Midland Funding. Legislation.

First Report of SEC’s Whistleblower Office Contains Some Surprises

On November 16, 2011, the SEC’s Office of the Whistleblower released its first annual report to Congress, as required by section 924(d) of the Dodd-Frank Act. The report only includes information about tips received after the final rules implementing the program became effective on August 12, 2011. As a result, it only includes seven weeks of data. Still, the information provides useful insights into the number and types of whistleblower complaints being received and some insights into the Office’s staffing and activities to date. Click here to read more.

S&P Downgrade of U.S. Credit Rating

On August 5, S&P downgraded the sovereign credit rating of the United States to ‘AA+‘ from ‘AAA’, and stated that the outlook on the long-term rating is negative. S&P cited the prolonged controversy between Congress and the Obama Administration over raising the statutory debt limit, and the rising public debt burden as reasons for the downgrade. S&P also published a list of ratings actions on Organizations, Issues (including U.S. Public Finance), Insured Bonds, and Funds that were affected by the rating downgrade. S&P Release on Downgrade. S&P Rating Action Related Information.

On August 5, the Fed, FDIC, NCUA, and OCC announced that, for risk-based capital purposes, the risk weights for Treasury securities and other securities issued or guaranteed by the U.S. government, government agencies and government-sponsored entities will not change as a result of the downgrade by S&P. Agencies’ Joint Release.

On August 2, Moody’s confirmed the ‘Aaa‘ government bond rating of the United States following the raising of the statutory debt limit while assigning the rating a negative outlook. Also on August 2, Fitch confirmed its ‘AAA‘ United States sovereign rating but noted that it projects that the United States government debt will continue to rise over the medium term in a manner inconsistent with maintaining a ‘AAA’ rating. Moody’s Release. Fitch Release.

Note: Free registration is required for Fitch, Moody’s and S&P releases.

SEC Study on Investment Advisers and Broker-Dealers

On January 21, the SEC submitted to Congress a study on investment advisers and broker-dealers, as required under Section 913 of the Dodd-Frank Act. The SEC recommended that it adopt and implement a uniform fiduciary standard of conduct for investment advisers and broker-dealers, no less stringent than the standards applied to investment advisers under the Advisers Act, when those financial professionals provide personalized investment advice about securities to retail investors. SEC Release. SEC Staff Study.