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Entries for category:   Federal Regulatory

 
Apr 17, 2014

CFPB releases guide to completing TILA-RESPA Integrated Disclosure forms
 

On Thursday, the Consumer Financial Protection Bureau (CFPB) released  its Guide to Completing TILA-RESPA Integrated Disclosure Forms (See our April 2, 2014, blog post for more information). The guide "provides instructions for completing the Loan Estimate and Closing Disclosure and also highlights common situations that may arise when completing the forms." The Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA) were first issued in January 2013 and amended through October; they take effect August 1, 2015. For more, access the guide.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Apr 09, 2014

Federal Reserve extends the Volcker Rule compliance deadline to July 21, 2017
 

This week, the Federal Reserve Board announced that it is giving banking entities two additional one-year extensions to "conform their ownership interests in and sponsorship of certain collateralized loan obligations covered by the Dodd-Frank Act's Volcker Rule (See our Dec 10, 2013, blog post – "Five federal financial agencies finalize the highly anticipated Volcker Rule"). The rule prohibits insured depository institutions and their affiliates from "engaging in proprietary trading and from acquiring or retaining ownership interests in, sponsoring, or having certain relationships with a hedge fund or private equity fund." According to Comptroller of the Currency Thomas J. Curry, the roughly 900-page rule is meant to "ensure that banks can't make speculative trades that are so large and risky that they threaten individual firms or the winder financial system." The Federal Reserve previously extended the conformance period for all activities and investments by one year to July 21, 2015. With the two additional one-year extensions, the new deadline is July 21, 2017. For more, read the full news release.


 
Posted by A. Sharett in  Dodd-Frank  Federal Deposit Insurance Corporation  Federal News  Federal Regulatory  Federal Reserve System   Office of the Comptroller of the Currency    |   Permalink

 

Apr 02, 2014

CFPB releases TILA-RESPA Integrated Disclosure rule compliance guide for small businesses
 

On Monday, the Consumer Financial Protection Bureau (CFPB) released a Small Entity Compliance Guide for the TILA-RESPA Integrated Disclosure rule that is designed to help lenders determine their federal mortgage disclosure compliance obligations for the mortgage loans they originate. The plain-language guide features a FAQ format to make it more accessible for industry constituents, "especially smaller businesses with limited legal and compliance staff." The Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA) were first issued in January 2013 and amended through October; they take effect August 1, 2015 (See our Dec 16, 2013, blog post for more information). For more, access the compliance guide.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal News  Federal Regulatory   |   Permalink

 

Apr 01, 2014

Ohio's biggest banks passed the Federal Reserve's Dodd-Frank Act stress test
 

Based on the results of the Dodd-Frank Act stress test, which were recently released by the Federal Reserve, Ohio's major deposit holders are sufficiently prepared for the following severe economic conditions: "unemployment jumps above 11 percent, housing prices plummet by a quarter and equity prices are cut in half," Columbus Business First reports. Of the 30 banks tested, only Salt Lake City-based Zions Bancorp would "have insufficient capital, under the worst circumstances, to meet the required 5 percent Tier 1 capital ratio – the percentage of a bank's capital to its risk-weighted assets," the article said. According to the results, the states seven largest banks would maintain the following capital ratio under severe economic conditions:

  • Fifth Third Bancorp, Ohio’s largest deposit holder, 8.4 percent
  • Huntington Bancshares, Inc., the state's second-largest deposit holder, 7.4 percent
  • U.S. Bancorp, the state's third-largest bank, 8.2 percent
  • PNC Financial Services Group Inc., the state's fourth-largest bank, 9 percent
  • JPMorgan Chase & Co., the state's fifth-largest bank, 6.3 percent
  • KeyCorp, the state's sixth-largest bank, 9.2 percent
Fore more, read the full story and the full Dodd-Frank Act Stress Test 2014: Supervisory Stress Test Methodology and Results March 2014.


 
Posted by A. Sharett in  Dodd-Frank  Federal News  Federal Regulatory  Federal Reserve System   Ohio News   |   Permalink

 

Mar 31, 2014

Illinois attorney general files first-of-its-kind lawsuit asserting Dodd-Frank enforcement authority
 

CFPB Monitor reports that the Illinois attorney general has filed what appears to be the first "state court lawsuit against a small loan lender alleging violations of the Dodd-Frank Act prohibition of unfair, deceptive or abusive acts or practices in addition to state law." In the complaint, Illinois Attorney General Lisa Madigan alleges that CMK Investments, Inc. "misrepresented the true cost of its loans" and that its "loan product was 'structurally unfair' because the account protection fee resulted in 'an endless cycle of debt.'" For more, including the complaint, read the full story.


 
Posted by A. Sharett in  Dodd-Frank  Federal Regulatory   |   Permalink

 

Mar 26, 2014

Six federal agencies issued a proposed rule implementing minimum requirements for appraisal management companies
 

This week, six federal agencies – the Consumer Financial Protection Bureau (CFPB), the Federal Deposit Insurance Corporation (FDIC), the Federal Housing Finance Agency (FHFA), the Federal Reserve, the National Credit Union Administration (NCUA) and the Office of the Comptroller of the Currency (OCC) – issued a proposed rule that would "implement minimum requirements for sale registration and supervision of appraisal management companies (AMCs)" in accordance with provisions of the Dodd-Frank Act. These minimum requirements would "apply to states that elect to establish an appraiser certifying and licensing agency with the authority to register and supervise AMCs" and would not compel a state to establish an AMC registration or supervision program. There is no penalty imposed on any state that does not establish a regulatory structure for AMCs; however, "an AMC is barred by section 1124 from providing appraisal management services for federally related transactions in a state that has not established such a regulatory structure." Public comments will be accepted for 60 days. For more, read the full news release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Deposit Insurance Corporation  Federal News  Federal Regulatory  Federal Reserve System   National Credit Union Administration  Office of the Comptroller of the Currency    |   Permalink

 

Mar 24, 2014

OCC adopts new interagency procedures for the new mortgage rules
 

The Office of the Comptroller of the Currency (OCC) recently adopted interagency examination procedures reflecting new mortgage rules requirements pursuant to the Dodd-Frank Act. These new procedures are currently being incorporated into the Comptroller's Handbook "Consumer Compliance" series. The new procedures were "developed and adopted on an interagency basis to promote consistency in the examination process and communication of supervisory expectations" (See our Feb 26, 2014, blog post for more information). For more, read the full news release.


 
Posted by A. Sharett in  Dodd-Frank  Federal Regulatory  Office of the Comptroller of the Currency    |   Permalink

 

Mar 21, 2014

American Banker obtains confidential data showing racial disparities in CFPB employee evaluations
 

Recently leaked internal staff evaluations show racial disparities in the Consumer Financial Protection Bureau's (CFPB) workplace, according to "confidential agency data" obtained by American Banker. The data relates to the bureau's 2013 employee performance evaluation and ratings system, which shows that Caucasians "were twice as likely...to receive the agency's top grade than were African American or Hispanic employees." These performance reviews were "used to grant raises and issue bonuses." The newspaper reports that the acquired data indicates that "racial disparities can be just as easily identified within the CFPB's ranks as among the lenders the bureau regulates." Some lenders and critics of the agency say the data reveals hypocrisy considering the bureau's use of a "controversial legal theory known as disparate impact – the assertion that different results for different racial groups are themselves a type of wrongful bias, even if they are unintentional," the article said. For more, read the full story.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal News  Federal Regulatory   |   Permalink

 

Mar 21, 2014

U.S. House passes major overhaul to the CFPB that the Senate is expected to defeat
 

On February 27, 2014, the U.S. House of Representatives passed H.R. 3193 by a 232-182 vote to make significant changes to the Consumer Financial Protection Bureau (CFPB), according to the CFPB Monitor. With an indication from the White House that President Obama would veto the bill, many regard the passage of H.R. 3193 as a "political exercise" by Republicans that the Democratic-controlled Senate is expected to defeat. The bill, supported by the American Bankers Association, "incorporates five CFPB reform bills approved in November 2013 by the House Financial Services Committee." H.R. 3193 would replace the CFPB with a new entity called the Financial Product Safety Commission, which would consist of five members, including the vice chairman of supervision of the Federal Reserve System as well as four presidential appointees subject to Senate confirmation. At $300 million, the commission's budget for FYs 2014 and 2015 would be $200 million less than the bureau's appropriation for those two years, the article said. For more, read the full story.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal News  Federal Regulatory   |   Permalink

 

Mar 05, 2014

CFPB urges credit reporting companies to make credit scores freely available to consumers
 

A report recently released by the Consumer Financial Protection Bureau (CFPB) found that accuracy issues are the top consumer complaint about the credit reporting industry. As a result, the bureau is calling on the biggest credit reporting agencies to "make credit scores and related content freely available to their consumers." The top three concerns are incorrect information on a credit report, frustration with the credit reporting company's investigation and difficulty obtaining a credit report or score. The CFPB also published a supervisory bulletin "warning companies that provide information to credit reporting agencies not to avoid investigating consumer disputes." For more, read the full news release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Mar 03, 2014

CFPB Director Richard Cordray outlines the bureau's efforts to improve the credit reporting industry
 

During remarks given at a recent Consumer Advisory Board meeting, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray discussed the "tremendous and growing influence" that credit scores have over consumers' lives, describing the duty to assure that "such personal financial information is updated timely and accurately, and that it is maintained securely" as a critical responsibility. In addition to accepting consumer complaints and helping consumers to "get their issues addressed," the CFPB is also now exercising supervisory authority over "companies that account for 90 percent of the annual receipts in [the credit reporting] market." It also moved the three major credit reporting companies to upgrade the system used for communicating consumer disputes to allow consumers to upload relevant documents. For more, read the full remarks.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Feb 26, 2014

FDIC releases interagency consumer compliance examination procedures for new mortgage rules pursuant to the Dodd-Frank Act
 

As part of the Federal Deposit Insurance Corporation's (FDIC) ongoing efforts to inform supervised institutions about important bank regulatory developments in order to promote transparency in its supervisory program, the FDIC recently released revised interagency consumer compliance examination procedures for the mortgage rules issued pursuant to the Dodd-Frank Act. These rules apply to all FDIC-supervised institutions. The revised procedures will be used to evaluate institutions' compliance with the Ability-to-Repay/Qualified Mortgage Rule, the Loan Originator Compensation Rule, the Mortgage Servicing Rules, the High-Cost Mortgage and Homeownership Counseling Amendment Rule, the Higher-Priced Mortgage Loan (HPML) Escrow Rule, the HPML Appraisal Rule and the Equal Credit Opportunity Act (ECOA) Appraisal Rule. For more, read the full news release.


 
Posted by A. Sharett in  Dodd-Frank  Federal Deposit Insurance Corporation  Federal Regulatory   |   Permalink

 

Feb 24, 2014

Sixth Circuit appellate court holds that Main Street Acquisition Corp. did not violate the FDCPA
 

Late last month, the U.S. Court of Appeals for the Sixth Circuit granted summary judgment in a case involving a debt collection action under the Fair Debt Collection Practices Act (FDCPA). In Phyllis Clark v. Main Street Acquisition Corp., the plaintiff-appellant Phyllis Clark allegedly defaulted on a credit card account she opened with Household Bank in 2006. Household Bank then sold "the right to claim the balance owed to Main Street Acquisition Corp.," who in turn hired Slovin & Associates Co., L.P.A. to recover the debt. Included in the documents Slovin provided to Clark as evidence of her outstanding balance was an affidavit from Jason Harrison, assistant vice president of Main Street, in which he said he had "personal knowledge" of the facts stated herein and indicated that the "balance due and owing to Plaintiff by Defendant on the Account is $1,429.24, plus interest at the legal rate per annum from June 30, 2010 and costs."

After settlement negotiations failed, Slovin filed a collection action in Crittenden County, Kentucky, on September 19, 2011, "requesting as relief the outstanding balance and costs." Clark subsequently filed a class action complaint against Main Street in the District Court for the Southern District of Ohio on May 25, 2012, in which she alleged, among other things, that the corporation had violated the FDCPA by the "intentional filings of false affidavits for the purpose of obtaining judgments against debtors in collection law suits and coercing debtors." The district court granted Main Street summary judgment on May 24, 2013.

The appellate court held that such "costs in an unstated amount" are "not a false representation" according to the FDCPA. Court costs as well as "other collection costs related to the default to the extent permitted by law" were "expressly authorized" by the Cardmember Agreement creating the debt. In addition, Harrison's statements in his affidavit that he had "personal knowledge" of the data "were neither misleading nor deceptive." Even though the electronic business records were acquired from the original lender, the appellate court held that "the least sophisticated consumer understands that lenders and debt collectors will by necessity have to rely on business records that they may not have personally created, especially in an age of automated, computerized transactions."

For more, read the full opinion.


 
Posted by A. Sharett in  Federal News  Federal Regulatory  Ohio News   |   Permalink

 

Feb 21, 2014

Banks fight back against federal regulators' plan to monitor checking overdraft fees
 

In a report released last June, the Consumer Financial Protection Bureau (CFPB) found that opting-in to overdraft coverage puts consumers at risk in part due to the fact that most banks have adopted automated systems for assigning overdraft fees (See our June 12, 2013, blog post for more information). The bureau, the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller jointly proposed last year that "all institutions include detailed breakdowns of their revenue from account fees in the public quarterly reports they file with the FDIC," Bloomberg reports. In response to complaints from small banks, which "earn a larger slice of their revenue" from checking account fees, the FDIC and OCC broke ranks with the bureau and opposed the change. Then last month, federal regulators released a revised version of the plan, which "would exempt banks with assets under $1 billion." Despite this change, the Independent Community Bankers of America trade group still opposes it, describing it as the "latest in a long line of new regulatory burdens faced by" small institutions. The group is asking federal regulators to exempt all institutions with total consolidated assets of less than $10 billion, the article said. For more, read the full story.
 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Deposit Insurance Corporation  Federal Regulatory  Federal Reserve System   Office of the Comptroller of the Currency    |   Permalink

 

Feb 19, 2014

CFPB deputy director delivers tough compliance message during the MBA's mortgage servicing conference
 

Consumer Financial Protection Bureau (CFPB) Deputy Director Steven Antonakes delivered prepared remarks during the Mortgage Bankers Association's National Mortgage Servicing Conference & Expo in Orlando today in which he said he was "deeply disappointed by the lack of progress the mortgage servicing industry has made" since the financial crisis, noting that the "fundamental rules" of mortgage servicing have "changed forever" and that the bureau is "ready, willing and able to vigorously enforce" the new bar it has set regarding the treatment of American consumers. With one in 10 homeowners still underwater and two million households at high risk for foreclosure, he said the bureau's work is "far from over." Antonakes highlighted how the Loan Originator Compensation rule and the Ability to Repay (QM) rule aim to clean up the mortgage market by restricting certain practices and helping borrowers know where they stand (See our Jan 10, 2014, blog post for more information). The deputy director said the bureau has been and continues to be responsive to "critical operational or interpretive issues" related to implementation of the new rules and he outlined the bureau's specific expectations for compliance. For more, read the full prepared remarks.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Feb 18, 2014

Federal Reserve approves final rule establishing prudential standards for liquidity, risk management and capital
 

Today, the Federal Reserve Board approved a final rule that establishes a number of enhanced prudential standards for liquidity, risk management and capital for large U.S. bank holding companies and foreign banking organizations to help increase the resiliency of their organizations. It also "requires a foreign banking organization with a significant U.S. presence to establish an intermediate holding company over its U.S. subsidiaries, which will facilitate consistent supervision and regulation of the U.S. operations of the foreign bank." The rule was required by the Dodd-Frank Act. For more, read the full news release.
 
Posted by A. Sharett in  Dodd-Frank  Federal Regulatory  Federal Reserve System    |   Permalink

 

Feb 14, 2014

OCC proposes rule that would establish minimum standards for the risk governance frameworks of certain banks
 

The Office of the Comptroller of the Currency (OCC) is requesting comment on a proposed rule that would "establish minimum standards for the design and implementation of a risk governance framework for large insured national banks, insured federal savings associations and insured federal branches of foreign banks with average total consolidated assets of $50 billion of more." The proposed rule outlines the roles and responsibilities of the organizational units charged with designing and implementing a risk governance framework. Front-line units, independent risk management and internal audits will be responsible for establishing "an appropriate system to control risk taking" and to "provide credible challenges to management's recommendations and decisions when appropriate." The proposal would require a covered bank to have a comprehensive written statement articulating its risk appetite, featuring both qualitative components and quantitative limits. Each board member would have the duty to oversee a covered bank's compliance with safe and sound banking practices, and to actively oversee a covered bank's risk-taking activities. At least two members of each covered bank's board would not be members of the bank's or the parent company's management. The comment period ends March 28, 2014. For more, read the full news release.


 
Posted by A. Sharett in  Federal Regulatory  Office of the Comptroller of the Currency    |   Permalink

 

Feb 12, 2014

Article by Bricker & Eckler partner Anthony Sharett addresses uncertainties regarding enforcement of the newly enacted CFPB rules
 

In the February 2014 issue of Mortgage Compliance Magazine, Bricker & Eckler partner Anthony Sharett recently addressed considerations and potential issues related to the Consumer Financial Protection Bureau's (CFPB) enforcement of its newly enacted rules. With the Ability-to-Repay and Qualified Mortgage requirements effective as of January 10, 2014, now is an opportune time to review CFPB Bulletin 2013-06 from June 2013, which outlines the bureau's Responsible Business Conduct expectations of supervised entities: self-policing, self-reporting, remediation and cooperation. However, because the bureau is a new agency with little history regarding enforcement actions, it is virtually impossible for lenders to determine beforehand how the bureau will treat minor and major violations of the new mortgage rules, particularly those that occur this year. For more, read the full story.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Feb 10, 2014

Bricker & Eckler partner Anthony Sharett discusses the implications of the OCC's recently introduced guidelines on risk and challenge management
 

Agenda, a Financial Times service, recently published an article describing guidelines introduced by the Office of the Comptroller of the Currency (OCC) "on how bank directors should govern risk and challenge management" in response to the financial meltdown (See our Jan 21, 2014, blog post – "OCC releases proposed standards for its 'heightened expectations' regarding the risk management practices of major financial institutions"). Bricker & Eckler partner Anthony Sharett discussed previous requirements set forth by the Federal Deposit Insurance Corporation (FDIC), the OCC and the now defunct Office of Thrift Supervision (OTS), noting how the OCC's new risk governance guidelines will make frontline oversight and management policies more uniform for examiners. For more, read the full story (subscription required).


 
Posted by A. Sharett in  Federal Deposit Insurance Corporation  Federal Regulatory  Office of the Comptroller of the Currency    |   Permalink

 

Feb 08, 2014

OCC issues updated "Mortgage Banking" booklet addressing new CFPB rules
 

The Office of the Comptroller of the Currency (OCC) recently issued the "Mortgage Banking" booklet of the Comptroller's Handbook, which updates a similarly titled booklet that was issued in March 1996 with examination procedures issued in March 1998. The booklet also replaces section 750 of "Mortgage Banking," which was "issued in November 2008 as part of the former Office of Thrift Supervision's (OTS) Examination Handbook for the examination of federal savings associations (FSA)." It applies to all banks engaged in mortgage banking activities and addresses the nature, general requirements and core examination procedures regarding the Consumer Financial Protection Bureau's (CFPB) recently imposed requirements related to mortgage servicing standards, loan origination compensation parameters, the Secure and Fair Enforcement of Mortgage Licensing (SAFE) Act of 2008, and ability-to-repay requirements (See our Jan 30, 2014, blog post – "Bricker & Eckler partner Anthony Sharett discusses how new CFPB regulations are impacting consumers and the banking industry"). For more, read the full OCC bulletin.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory  Office of the Comptroller of the Currency    |   Permalink

 

Feb 07, 2014

Comptroller of the Currency Thomas J. Curry testifies before a Senate committee on the OCC's implementation of the Dodd-Frank Act
 

On Thursday, Comptroller of the Currency Thomas J. Curry testified before the U.S. Senate Committee on Banking, Housing and Urban Affairs on the OCC's implementation of the Dodd-Frank Act. In addition, Comptroller Curry discussed what his office is doing to both "improve the security of consumer financial information held by national banks and federal savings associations" and "improve its supervisory processes." The day before, Comptroller Curry testified about the Volcker Rule before the U.S. House Committee on Financial Services (See our Feb 5, 2014, blog post for more information). For more, read the full news release, which includes his written testimony and oral statement.


 
Posted by A. Sharett in  Dodd-Frank  Federal Regulatory  Office of the Comptroller of the Currency    |   Permalink

 

Feb 06, 2014

Bricker & Eckler partner Anthony Sharett discusses the significance of the CFPB's move to regulate the debt collection industry
 

Bank Safety & Soundness Advisor recently published an article assessing the significance and potential impacts of the Consumer Financial Protection Bureau's (CFPB) recently released Advance Notice of Proposed Rulemaking (ANPR) for regulating the debt collection industry (See our Nov 6, 2013, blog post – "CFPB is considering rules for debt collection"). Among several financial industry experts who provided insight into the issue was Bricker & Eckler partner Anthony Sharett, who commented on the apparent determination of the bureau to regulate the industry, describing its efforts as a "watershed moment." For more, read the full story (subscription required).


 
Posted by K. Warmsby in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Jan 30, 2014

Bricker & Eckler partner Anthony Sharett discusses how new CFPB regulations are impacting consumers and the banking industry
 

Bricker & Eckler partner Anthony Sharett recently did a Q&A session with Columbus Business First reporter Evan Weese on the Consumer Financial Protection Bureau's (CFPB) performance so far, as well as the impact of its newly enacted Qualified Mortgage (QM)/Ability to Repay regulations. Anthony gave the bureau a B grade for its consumer protection efforts, while acknowledging the extreme difficulties the banking industry face regarding compliance deadlines for these new regulations. For more, read the full story.


 
Posted by K. Warmsby in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Jan 27, 2014

CFPB proposes rule to oversee larger nonbank providers of international money providers
 

The Consumer Financial Protection Bureau (CFPB) recently proposed a rule that would expand its authority to assess the largest banks' and credit unions' compliance with the Remittance Rule to include "any nonbank international money transfer provider that provides more than one million international money transfers annually" (See our Jan 22, 2012, blog post – "CFPB sets new rules for international money transfers") International money transfers were generally not covered by federal consumer protection regulations before the Dodd-Frank Act, which created the agency. The proposed rule "would bring new oversight to about 25 of the largest providers in the market," enabling the bureau to ensure that these nonbanks offer the following consumer protections:

  • Better disclosures regarding exchange rates, fees, the amount of money that will be delivered abroad, and the date the money will be available.
  • The ability to cancel a remittance within 30 minutes of payment "regardless of the reason the consumer wants to cancel."
  • Holding remittance transfer providers accountable for certain types of errors and requiring that they investigate and correct certain errors should a remittance sender report a problem within 180 days. "Companies that provide remittance transfers may also be responsible for mistakes made by their agents."
For more, read the full proposed rule and news release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal News  Federal Regulatory   |   Permalink

 

Jan 22, 2014

U.S. House subcommittee holds hearing on the potentially negative impacts of the CFPB's QM Rule
 

CFPB Monitor recently reported on a U.S. House of Representatives Subcommittee on Financial Services hearing held this month in which "[f]our lender representatives and one consumer law nonprofit testified about the necessity to consider changes" to the Qualified Mortgage (QM) Rule. During the hearing, titled "How Prospective and Current Homeowners Will Be Harmed by the CFPB's Qualified Mortgage Rule," Republicans claimed that "the QM Rule may eliminate non-QM loans, which would impair the ability of lenders to work with borrowers on an individual basis," while Democrats held that the QM Rule is necessary to "protect borrowers against predatory lender practices." The following witnesses testified:

  • Michael D. Calhoun, President of the Center for Responsible Lending
  • Bill Emerson, CEO of Quicken Loans, Inc., on behalf of the Mortgage Bankers Association
  • Jack Hartings, President and CEO of The Peoples Bank Co., on behalf of the Independent Community Bankers of America
  • Frank Spencer, President and CEO of Habitat for Humanity of Charlotte, North Carolina
  • Daniel Weickenand, CEO of Orion Federal Credit Union, on behalf of the National Association of Federal Credit Unions
For more, read the full CFPB Monitor post.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Jan 16, 2014

Five federal agencies approve an interim final rule authorizing banks to retain interests in certain collateralized debt obligations backed by bank-issued trust preferred securities
 

On Wednesday, five federal agencies – the Commodity Futures Trading Commission, the Federal Reserve Board, the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC) and the Securities and Exchange Commission (SEC) approved an interim final rule outlining the qualifications that must be met in order for banking entities to retain an interest in or sponsorship of certain collateralized debt obligations backed primarily by trust preferred securities (TruPS CDOs) from the investment prohibitions of section 619 of the Dodd-Frank Act's Volcker Rule (See our Dec 23, 2013, blog post for more information). They are accepting comment on the rule for 30 days. Under the interim final rule, the qualifications that must be met are that:

  • the truPS CDO was established and the interest was issued before May 19, 2010;
  • the banking entity reasonably believes that the offering proceeds received by the TruPS CDO were invested primarily in Qualifying TruPS Collateral; and
  • the banking entity's interest in the TruPS CDO was acquired on or before December 10, 2013, which is the date that these agencies issued final rules implementing section 619.

For more, read the full news release.


 
Posted by A. Sharett in  Dodd-Frank  Federal Deposit Insurance Corporation  Federal Regulatory  Federal Reserve System   Office of the Comptroller of the Currency    |   Permalink

 

Jan 15, 2014

Federal Reserve Board requests comment on two proposed revisions to risk-management standards
 

The Federal Reserve Board recently announced its request for public comment on proposed revisions to "the Regulation HH risk-management standards for certain financial market utilities that have been designated as systematically important by the Financial Stability Oversight Council." The Board is also requesting comment on related revisions to Part I of the Federal Reserve Policy on Payment System Risk (PSR policy). Comments on both proposals must be submitted by March 31, 2014. For more, including links to submit comments, read the full news release.


 
Posted by A. Sharett in  Federal Regulatory  Federal Reserve System    |   Permalink

 

Dec 13, 2013

Federal Reserve Board requests public comment on proposed amendments to check collection and return rules
 

Responding to the reality that the nation's check collection system has evolved from "one that is largely paper-based to one that is virtually all electronic," the Federal Reserve Board this week requested public comment on proposed amendments to check collection and return rules. The board is proposing that "electronic checks and electronic returned checks that banks exchange by agreement" also be subject to the check collection and return provisions in Regulation CC (Availability of Funds and Collection of Checks). The board is also requesting comments on "alternative approaches to modify the current expeditious-return and notice of nonpayment requirements" in an effort to encourage the few remaining banks demanding paper returns to "accept electronic returns." Comments are due by May 2, 2014. For more, read the full press release.


 
Posted by A. Sharett in  Federal Regulatory  Federal Reserve System    |   Permalink

 

Dec 10, 2013

Five federal financial agencies finalize the highly anticipated Volcker Rule
 

After two years of work, five federal financial regulatory agencies today finalized the highly anticipated Volcker Rule as required by the 2010 Dodd-Frank Act, Reuters reports. The Commodity Futures Trading Commission, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Federal Reserve Board, and the Securities and Exchange Commission approved the roughly 900-page rule, which aims to "ensure that banks can't make speculative trades that are so large and risky that they threaten individual firms or the wider financial system." According to the Federal Reserve Board, the final rules "provide exemptions for certain activities, including market making, underwriting, hedging, trading in government obligations, insurance company activities, and organizing and offering hedge funds or private equity funds." The activities and investments of covered banking organizations must be in compliance by July 21, 2015; however, "a banking entity that does not engage in covered trading activities will not need to establish a compliance program." The final rules also clarify that "certain activities are not prohibited, including acting as agent, broker or custodian." For more, read the full story and press release.


 
Posted by A. Sharett in  Dodd-Frank  Federal Deposit Insurance Corporation  Federal Regulatory  Federal Reserve System   Office of the Comptroller of the Currency    |   Permalink

 

Nov 09, 2013

NCUA to host a free, two-part webinar on how to comply with forthcoming remittance and mortgage lending rules
 

The National Credit Union Administration  (NCUA) will host a free, two-part webinar titled, "New Dodd-Frank Remittances and Mortgage Lending Rules," on Mon, Nov. 18, 2013, and Wed, Dec. 18, 2013, at 2 p.m. each day. On Monday, a high-level overview will be provided on remittance transfers, higher-priced mortgage loan appraisals, mortgage servicing and higher-priced loan escrows. Tuesday's topics are the ability-to-repay and qualified mortgages, high-cost mortgage and home ownership counseling, loan originator compensation, and Equal Credit Opportunity Act appraisals and valuations. For more, including registration information, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory  National Credit Union Administration   |   Permalink

 

Sep 24, 2013

CFPB Director Richard Cordray discusses the future of banking regulation in the aftermath of the financial crisis
 

Today, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray discussed the aftermath of the financial crisis and the future of banking regulation during the American Banker Regulatory Symposium in Arlington, Virginia. Cordray discussed how the creation of the CFPB centralized authority for the administration and enforcement of consumer financial laws that until then had been strewn across seven federal agencies. For more, read the full remarks.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Sep 07, 2013

CFPB files amicus brief with the FTC arguing that collectors must disclose when debt is time-barred
 

CFPB Monitor reports that an amicus brief filed jointly by the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) offers a view that would effectively expand the Fair Debt Collection Practices Act (FDCPA) to "require debt collectors to disclose that a debt is time-barred when attempting to collect." In the brief filed for Delgado v. Capital Management Services, LP, et al., the two agencies argue that "a time-limited settlement offer can mislead an unsophisticated consumer to believe that a debt is enforceable even if the offer is not accompanied by any explicit or implied threat of litigation." For more, read the full story.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Sep 05, 2013

CFPB bulletin outlines what furnishers must do to comply with the Fair Credit Reporting Act
 

The Consumer Financial Protection Bureau (CFPB) released a bulletin detailing its expectations for Fair Credit Reporting Act (FCA) compliance by companies known as furnishers, which supply information to consumer reporting companies. The bureau noted it success improving e-OSCAR – the electronic system used to send information on consumer disputes from the three major consumer reporting companies to furnishers – so that it could "send information relating to consumer disputes to furnishers." For more, read the full press release and bulletin.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Jul 29, 2013

Bricker partners attending ACI Consumer Finance Class Actions & Litigation Conference
 

In an effort to stay abreast of important trends within the consumer finance litigation and enforcement practice area, Bricker partners Anthony M. Sharett and Drew H. Campbell are attending the American Conference Institute's Consumer Finance Class Actions & Litigation Conference in Chicago, Illinois.   The conference will include in-house roundtables, CFPB updates, litigation and settlement trends, and regulatory and enforcement updates.  



 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Jul 29, 2013

Federal regulators assure banking agencies it's safe to modify private student loans
 

This week, the Federal Deposit Insurance Corporation, the Federal Reserve Board and the Officer of the Comptroller of the Currency released joint statements "encouraging financial institutions to work constructively with private student loan borrowers experiencing financial difficulties." Unemployed or underemployed student loan borrowers can struggle to make payments, the statement said, and financial institutions should clearly explain programs that can help these borrowers modify their loans, including extensions, deferrals, renewals and rewrites. Private lenders have previously expressed concerns that modifying a private student loan "might force them to categorize it as a troubled asset," which could subject them to other regulations, The Wall Street Journal reports. An FDIC spokesman said the federal banking agencies put out their statement "to clear up that confusion," saying "loan modifications would be viewed favorably on a bank's books if they are done in a 'prudent' way," the article said. For more, read the full press release and story.


 
Posted by A. Sharett in  Federal Deposit Insurance Corporation  Federal News  Federal Regulatory  Federal Reserve System   Office of the Comptroller of the Currency    |   Permalink

 

Jul 17, 2013

U.S. Senate clears Richard Cordray to run the CFPB a year and a half after he was appointed to the position
 

U.S. Senate Republicans reached an eleventh-hour agreement with their Democratic counterparts Monday night to confirm Richard Cordray as director of the Consumer Financial Protection Bureau (CFPB), The Columbus Dispatch reports. In January 2012, President Obama appointed Cordray under a controversial recess appointment after Republicans held up his nomination in protest of the structure of the agency itself, which they thought should be "overseen by a five-member board" and subject to the congressional appropriations process (see our Jan 04, 2012, blog post for more information). The compromise was made to avoid a showdown between the two parties over filibusters, the rules for which Senate Majority Leader Harry Reid (D-Nevada) has been threatening to change due to what he describes as congressional obstruction from Republicans. By confirming Cordray, a Grove City native and former Ohio attorney general, “the Senate assured that he can remain in his post for a five-year term, and it effectively ended speculation about Cordray returning to Ohio to seek the Democratic nomination for governor in 2014,” the article said. For more, read the full story.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal News  Federal Regulatory   |   Permalink

 

Jul 11, 2013

Federal agencies propose rule to exempt subset of higher-priced mortgage loans from the recently finalized appraisal requirements
 

Six federal financial regulatory agencies are proposing exemptions for a final rule on appraisal requirements that was imposed by the Dodd-Frank Act and finalized in January 2013, according to a press release from the Federal Reserve Board (see our January 19, 2013, blog post for more information). In response to public comments received regarding the appraisal rule, the new rule would exempt the following three types of higher-priced mortgage loans from the appraisal requirements: "loans of $25,000 or less; certain 'streamlined' refinancings; and certain loans secured by manufactured housing." The agencies — the Consumer Financial Protection Bureau (CFPB), the Federal Deposit Insurance Corporation (FDIC), the Federal Housing Finance Agency (FHFA), the National Credit Union Administration (NCUA) and the Office of the Comptroller of the Currency (OCC) — will accept public comments on all aspects of the proposal until September 9, 2013. For more, including a link to the proposed rule, read the full press release.



 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Deposit Insurance Corporation  Federal Regulatory  Federal Reserve System   National Credit Union Administration  Office of the Comptroller of the Currency    |   Permalink

 

Jul 10, 2013

Sharett featured on Bank Safety & Soundness Advisor webinar panel
 

Bricker & Eckler Partner Anthony Sharett shared his expertise on consumer compliance exams today during the Bank Safety & Soundness Advisor's CFPB-Influenced Community Bank Exams: Best Practices for the New Consumer Compliance Exam webinar. He was joined by Andrew Campbell, counsel for Ober Kaler's Financial Institutions Group, and Cliff Stanford, former assistant general counsel at the Federal Reserve. For more information, click here.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Jul 09, 2013

Regulatory agencies propose rule to strengthen leverage ratio standards for the most significant U.S. banking organizations
 

Today, the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board and the Office of the Comptroller of the Currency (OCC) proposed a new rule that would enable restrictions on discretionary bonus payments and capital distributions at any of the eight largest, "most systematically significant U.S. banking organizations" that fail to maintain "a tier 1 capital leverage buffer of at least 2 percent" of its assets, which is "above the minimum supplementary leverage ratio requirement of 3 percent, for a total of 5 percent." In addition, the rule would also require insured depository institutions of covered bank holding companies (BHCs) to "meet a 6 percent supplementary leverage ratio to be considered 'well capitalized' for prompt corrective action purposes. For more, read the full press release.


 
Posted by A. Sharett in  Federal Deposit Insurance Corporation  Federal Regulatory  Federal Reserve System   Ohio Regulatory   |   Permalink

 

Jul 03, 2013

New Federal Reserve Board rule increases capital quality and quantity requirements
 

The Board of Governors of the Federal Reserve recently approved a final rule that increases the minimum requirements that banking institutions must meet with regard to the quantity and quality of their capital, according to a press release from the board. The quantity requirement establishes "a new minimum ratio of common equity tier 1 capital to risk-weighted assets of 4.5 percent and a common equity tier 1 capital conservation buffer of 2.5 percent of risk-weighted assets that will apply to all supervised financial institutions. The rule also raises the minimum ratio of tier 1 capital to risk-weighted assets from 4 percent to 6 percent and includes a minimum leverage ratio of 4 percent for all banking organizations." With regard to the quality of capital, the final rule "implements strict eligibility criteria for regulatory capital instruments." The phase-in period for smaller banking organizations will begin in January 2015, while the phase-in for larger institutions will begin in January 2014. For more, read the full press release.


 
Posted by A. Sharett in  Federal Regulatory  Federal Reserve System    |   Permalink

 

Jul 01, 2013

Banking agencies issue updated host state loan-to-deposit ratios
 

Today, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation issued updated host state loan-to-deposit ratios, which are used to determine whether banks are compliant with section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, according to a joint release from the agencies. The provision prohibits a bank from "establishing or acquiring a branch or branches outside of its home state primarily for the purpose of deposit production" and provides a process to test compliance that uses these percentages. For more, read the full release and access the updated ratios.


 
Posted by A. Sharett in  Federal Deposit Insurance Corporation  Federal Regulatory  Federal Reserve System   Office of the Comptroller of the Currency    |   Permalink

 

Jun 28, 2013

CFPB orders U.S. Bank and Dealers' Financial Services to refund $6.5 million to servicemembers
 

Yesterday, the Consumer Financial Protection Bureau (CFPB) announced that Minneapolis-based U.S. Bank violated the Truth in Lending Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act when it targeted active-duty servicemembers with deceptive marketing and lending practices through its Military Installment Loans and Education Services (MILES) auto loans program, according to a press release from the bureau. Lexington, Kentucky-based Dealers' Financial Services (DFS), which markets the program, manages its website and processes loan applications before submitting them to U.S. Bank, was also found guilty of the following deceptive marketing practices: understating the costs of the vehicle service contract, understating the costs of the insurance and misleading consumers about product benefits.

To make payments, the program required servicemembers to use a decades-old system known as the military allotment system, which was originally designed to "help deployed servicemembers send money home to their families and pay their creditors at a time when automatic bank payments and electronic transfers were not yet common bank services." The bureau found that not only did the lenders often require repayment through fee-charging, third-party processors, but that the bank also failed to properly disclose the schedule of payments, which by coming out of every paycheck amounted to twice each month. U.S. Bank must repay at least $3.2 million and DFS has agreed to pay $3.3 million to active-duty servicemembers. The CFPB decided not to impose a civil penalty, but said it will work with the Department of Defense as part of an interagency group tasked with improving the allotment system. For more, read the full press release and remarks from CFPB Director Richard Cordray.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory   |   Permalink

 

Jun 25, 2013

CFPB proposes modifications and narrow revisions to several mortgage rules
 

To ensure that the ability-to-pay rule, as well as new rules for mortgage servicing, escrow accounts, high-cost mortgages, and compensation and qualifications for loan originators "deliver their intended value for customers," the Consumer Financial Protection Bureau (CFPB) recently proposed several modifications and narrow revisions to these rules that are designed to provide clarity to lenders and other concerned parties, according to a press release from the bureau (see our February 13, 2013, blog post for more information). The proposed changes serve to:

  • Outline procedures for obtaining follow-up information on loss-mitigation applications
  • Facilitate servicers' offering of short-term forbearance plans
  • Facilitate lending in rural or underserved areas
  • Make clarifications about financing of credit insurance premiums
  • Clarify the definition of a loan originator
  • Clarify the points and fees thresholds for manufactured housing employees
  • Revise effective dates of Loan Originator rule and ban on financing of credit insurance

For more, including a copy of the proposal, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory   |   Permalink

 

Jun 19, 2013

U.S. Supreme Court agrees to hear a case challenging disparate-impact discrimination theory
 

Monday, the U.S. Supreme Court agreed to hear Mt. Holly Gardens Citizens in Action v. Mt. Holly, which challenges the controversial anti-discrimination tool known as "disparate impact," Forbes reports. Disparate-impact discrimination theory involves the use of statistical analyses to pursue discrimination claims against governments, lenders and others "even if they had no intent of mistreating members of minority groups."

In Mt. Holly, a federal court rejected claims made by residents of a poor New Jersey neighborhood that the town's redevelopment plan to replace "hundreds of units of inexpensive housing with middle-income homes" was discriminatory "simply because some black and Latino residents would no longer be able to afford to live" in that neighborhood. Reversing the federal court's decision, the Third Circuit Court of Appeals rejected the township's argument "that virtually any redevelopment project in a minority neighborhood would fail to comply with the Fair Housing Act under disparate-impact analysis" — an opinion the Obama administration supported in a friend-of-the-court brief.

This case will potentially have a significant impact on the consumer lending industry as it "will be a key test of whether the government can use such statistical analysis to pursue discrimination claims." For more, read the full story.


 
Posted by A. Sharett in  Case Law Summary  Federal Regulatory   |   Permalink

 

Jun 12, 2013

CFPB report finds that opting-in to overdraft coverage puts consumers at greater risk
 

A new Consumer Financial Protection Bureau (CFPB) report released this week found that due in part to the fact that most banks have adopted automated systems for assigning overdraft fees, what was once "an occasional courtesy" has become "a significant source of industry revenues," with it and non-sufficient fund fees now representing "60 percent or more of consumer checking account fee income," according to a press release from the bureau. Another contributing factor is that procedures and criteria for these fees vary by institution, some of which have complicated fee structures, transaction postings and overdraft coverage limits that make it difficult for consumers to anticipate and avoid these fees. What's more, the report found that customers who opt-in to overdraft coverage end up paying more in overdraft and non-sufficient fund fees, and are more likely to end up with involuntary account closures due to negative account balances. For more, including a link to the full report and fact sheet, read the full press release and CFPB Director Richard Cordray's prepared remarks.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Jun 06, 2013

Latest issue of FDIC publication covers credit risk assessments, IT examinations and M&A compliance
 

Today, the Federal Deposit Insurance Corporation's (FDIC) Division of Risk Management Supervision released the Summer 2013 issue of Supervisory Insights — a biannual publication that "provides a forum for discussing how bank regulation and policy are put into practice in the field, sharing best practices, and communicating about the emerging issues that bank supervisors are facing." Supervisory Insights enters its tenth year in publication with this issue, and so chose a broad range of topics as featured content to reflect the "unprecedented change during the past decade" within the financial services industry. Articles featured in this issue are: “Credit Risk Assessment of Bank Investment Portfolios," “Mergers and Acquisitions: A Compliance Perspective," and "The Evolution of Bank Information Technology Examinations.” For more, visit this FDIC webpage to access the full issue.


 
Posted by A. Sharett in  Federal Deposit Insurance Corporation  Federal Regulatory   |   Permalink

 

May 31, 2013

CFPB's Consumer Complaint Database expands coverage and introduces location information
 

The Consumer Financial Protection Bureau (CFPB) today announced that it has again expanded the scope and functionality of its Consumer Complaint Database as part of an ongoing effort to increase transparency within the consumer financial services market (see our March 28, 2013, blog post for more information), according to a press release from the bureau. The database, which in March "expanded from more than 19,000 credit card complaints to nearly 90,000 complaints on credit cards, mortgages, student loans, bank accounts and services, and other consumer loans, like auto loans," now also includes complaints about money transfers and credit reporting. In addition, every complaint now lists the state it came from so that people can "more easily localize data." For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory   |   Permalink

 

May 30, 2013

CFPB director outlines bureau's core policy recommendations for youth financial education
 

Tying the endurance of the nation's democratic system to the "effective operation of a free market economy," Consumer Financial Protection Bureau (CFPB) Director Richard Cordray delivered prepared remarks during the Financial Industry Regulatory Authority (FINRA) Investor Education Conference in Washington, D.C., yesterday that described the agency's efforts to "bridge the widening gap between people’s actual financial capability and the increasingly complex financial decisions they have to make." Director Cordray said that while the bureau’s rules, oversight and enforcement actions are intended to make sure "that consumer financial markets are not rigged against people," self-protection remains the "best and most immediate form of consumer protection." In that vein, Director Cordray lauded FINRA's National Financial Capability Study as a "crucial source of information about the habits of American consumers and the complex decisions they face in the financial marketplace," and provided an outline of the bureau's recently unveiled core policy recommendations for youth financial education. For more, read the full press release and access FINRA's National Financial Capability Study.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

May 30, 2013

CFPB amends ability-to-repay rule to facilitate lending by certain small creditors and community lenders
 

Yesterday, the Consumer Financial Protection Bureau (CFPB) announced that it has finalized amendments modifying the ability-to-repay rule so as to "facilitate access to credit" for small creditors, community development lenders and housing stabilization programs, according to a press release from the bureau. Developed to help prevent another mortgage crisis, the ability-to-repay rule created the "Qualified Mortgages" (QMs) standard, featuring requirements designed to "protect consumers from taking on loans they do not have the financial means to pay back" (see our January 10, 2013, blog post for more information). Under the finalized amendments:

  • Nonprofit and community-based lenders that work "to help low- and moderate-income consumers obtain affordable housing" and make no more than 200 loans per year are exempted from the ability-to-repay rule, as are mortgage loans made through certain homeownership stabilization and foreclosure prevention programs.
  • Small creditors that make 500 or fewer first-lien mortgages annually and have less than $2 billion in assets are provided a two-year transition period during which they can make some balloon loans that will still meet the definition of QMs. These creditors are also allowed to "charge a higher annual percentage rate for certain first-lien Qualified Mortgages while maintaining a safe harbor for the Ability-to-Repay requirements."
  • The points and fees threshold — established to ensure that QMs aren't compromised by excessive compensation paid to loan originators — no longer applies to compensation paid by a mortgage broker to a loan originator employee or by a lender to a loan originator employee. Compensation paid by a creditor to a mortgage broker, as well as "any origination charges paid by a consumer to a creditor," must still be included in the points and fees.

The ability-to-repay rule, complete with these amendments, will go into effect on January 10, 2014. For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory   |   Permalink

 

May 17, 2013

CFPB initiatives focus on assisting immigrant communities
 

During a Consumer Advisory Board Meeting in Los Angeles Wednesday, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray described how the bureau's new remittance rule will protect immigrant community members when they transfer money to loved ones abroad (see our May 01, 2013, blog post for more information). Describing financial literacy and financial capability as "essential components of citizenship," Director Cordray also detailed the bureau's concerted efforts to make "more personal finance education available to everyone in this country." Because nearly two-thirds of the Latinos living in the United States access the internet from a mobile device, the bureau announced its first foray into mobile technology with the unveiling of "CFPB en Español" — a program dedicated to making many of the bureau's resources and forms available in Spanish that also features the new consumer database "AskCFPB," which was optimized for use on both computers and mobile devices. For more, read Director Cordray's full remarks.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

May 09, 2013

Comptroller of the Currency says federal agencies must work together to supervise the financial system
 

Comptroller of the Currency Thomas J. Curry discussed bank supervision after the financial crisis during the 49th Annual Conference on Bank Structure and Competition in Chicago today. In order to detect risks across our multifaceted and far-reaching financial system, Curry said that his office is stepping up coordination with the Federal Reserve, the FDIC and the CFPB to "develop integrated strategies for joint supervision of complex institutions and new tools to aid oversight." He also described a new "heightened expectations" program, which aims to increase standards regarding audit and risk management. For more, read Curry’s remarks.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Deposit Insurance Corporation  Federal Regulatory  Federal Reserve System   Office of the Comptroller of the Currency    |   Permalink

 

May 09, 2013

CFPB report details how student loan debt is affecting individuals and the broader economy
 

After receiving more than 28,000 comments to the February 2013 Notice and Request for Information regarding student debt issues, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray announced during a field hearing on student loan debt today that the bureau has published a new report discussing how high student debt — particularly from private student loans — is preventing many consumers from achieving "a full financial life" and could be harmful to "recovering consumer markets." Whereas traditionally, consumers with student debt "typically had higher income and were therefore more likely to buy a home," today the opposite appears to be trending: those saddled with student loan debt are refraining from purchasing homes and cars as well as starting businesses. In addition, these consumers are shying away from moving to rural communities that may necessitate home and car ownership, and are relying on their parents while being unable to begin their own retirement savings. The report features several potential policy and market-based solutions that would help borrowers who pay on time refinance their loans, and would provide a "road to recovery" for borrowers in distress and a "credit clean slate" for borrowers in default. For more, read the full press release, prepared remarks and report.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

May 08, 2013

Sharett to join panel at MBA's Legal Issues and Regulatory Compliance Conference
 

Bricker & Eckler partner Anthony Sharett will be presenting at the Mortgage Bankers Association's Legal Issues and Regulatory Compliance Conference, which takes place May 19-22, 2013, in Boca Raton, Florida. Anthony will be a panelist for the Litigation Forum session titled “Enforcement,” which will focus on the range of enforcement actions by federal and state regulators and strategies available to companies to address them. Joining Anthony on the panel will be Rachel M. Dollar, partner at Smith Dollar PC, and Jason McElroy, associate at Weiner Brodsky Kider PC. For more information, visit the conference website


 
Posted by A. Sharett in  Federal Regulatory   |   Permalink

 

May 01, 2013

New CFPB rules for international money transfers will take effect on October 28, 2013
 

New rules from the Consumer Financial Protection Bureau (CFPB) regulating international money transfers will take effect on October 28, 2013, after being delayed and revised following complaints from the financial industry that the regulations would put them out of business, according to a press release from the bureau (see our Dec 26, 2012, blog post for more information). The revised rule requires remittance providers to disclose that fees and foreign taxes may apply to a transfer, but no longer requires them to specifically disclose each fee or foreign tax, The Wall Street Journal reports. The rule also requires that remittance providers "attempt to recover the funds" if a sender uses the wrong account number, but no longer requires them to "bear the cost of funds that cannot be recovered," the release said. For more, read the full Wall Street Journal story (subscription required) and CFPB press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Apr 30, 2013

CFPB amendment to CARD Act enables stay-at-home partners to get credit
 

Yesterday, the Consumer Financial Protection Bureau (CFPB) released an amendment to the Credit Card Accountability Responsibility and Disclosure Act (CARD Act) that makes it easier for stay-at-home spouses and partners with access to a working partner's income to get a new credit card or an increased credit limit, according to a press release from the bureau. The amendment revises the CARD Act requirement that a card issuer "evaluate a consumer's ability to pay before opening a new credit card account or increasing a credit limit" to allow consideration of not only the applicant's independent income or assets, but also "third-party income if the applicant has a reasonable expectation of access to it." For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Apr 19, 2013

CFPB report finds that confusing financial advising credentials are used to defraud older Americans
 

According to a report recently released by the Consumer Financial Protection Bureau (CFPB), older Americans are at risk of being deceived by the more than 50 different designations that financial advisers use "to indicate that they have advanced training or expertise in the financial needs of older consumers." The report, titled "Senior Designations for Financial Advisers: Reducing Consumer Confusion and Risks," found that the requirements, examinations and oversight can differ significantly for similar sounding designations. Lacking "comprehensive supervision and enforcement," these credentials are used to defraud older Americans, whose retirement savings, inheritance and accumulated home equity can make them "attractive targets for the marketing of various financial products," the release said. For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory   |   Permalink

 

Apr 04, 2013

CFPB announces enforcement actions against four mortgage insurance companies for illegal kickbacks to lenders
 

In Washington, D.C., today, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray announced that four mortgage insurance companies are facing enforcement actions for illegally providing inflated "reinsurance" payments to mortgage lenders "in exchange for referring business to them," according to a press release from the bureau. The CFPB’s investigation revealed that these mortgage insurance companies used subsidiaries to funnel millions of dollars to lenders as payments for reinsurance, which is additional insurance to protect lenders against the risk of default on loans made to home buyers that "cannot make a 20 percent down payment," the release said. For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Mar 28, 2013

CFPB's Consumer Complaint Database expands its coverage to include an array of financial services
 

In an effort to increase transparency within the consumer financial services market and to encourage civic participation in reform efforts, the Consumer Financial Protection Bureau (CFPB) announced today that its Consumer Complaint Database has been expanded "from about 19,000 credit card complaints to more than 90,000 complaints on mortgages, student loans, bank accounts and services, other consumer loans, and credit cards" — making it the largest collection of federal consumer financial complaint data in the nation, according to a press release from the bureau. The database is updated daily with complaints involving approximately 450 companies so far, and each database entry includes "the type of complaint, the date of submission, the consumer's ZIP code, and the company that the complaint concerns." Providing the hashtag #CFPBdata for sharing ideas, the bureau encourages "consumers, analysts, developers, data scientists, civic hackers, and companies that serve consumers" to analyze, augment and mash the data with other public sets so as to "highlight innovative uses" and make the data as contributive as possible toward the bureau's efforts. CFPB Director Richard Cordray announced the expansion of the database during a consumer response field hearing in Des Moines, Iowa. For more, read the full press release and Director Cordray's prepared remarks, and access the Consumer Complaint Database.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Mar 28, 2013

CFPB's Consumer Complaint Database expands its coverage to include an array of financial services
 


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Mar 25, 2013

Federal and state bank supervisors announce increase in required electronic loan data fields
 

According to a joint release from the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the Conference of State Bank Supervisors, an increase from five to 30 mandatory loan data fields in the Interagency Loan Data Request (ILDR) — a "voluntary, standardized data request that banks can use to electronically submit loan information for safety and soundness examinations" — will "facilitate greater consistency in the data submission process." Overall participation in the ILDR, which has 82 fields total, is voluntary; however, 30 of those fields are mandatory for electronic submissions. For more, read the full press release.


 
Posted by A. Sharett in  Federal Deposit Insurance Corporation  Federal Regulatory  Federal Reserve System   Office of the Comptroller of the Currency   Ohio Division of Financial Institutions  Ohio Regulatory   |   Permalink

 

Mar 22, 2013

New guidance from the CFPB aims to stop illegal discriminatory markup on car loans
 

The Consumer Financial Protection Bureau (CFPB) released a bulletin yesterday that provides "guidance to indirect auto lenders within the CFPB's jurisdiction on how to address fair lending risk," according to a press release from the bureau. Unlawful, discriminatory pricing may be responsible for "tens of millions of dollars in consumer harm each year" with discretionary "dealer markups" on car loans causing African Americans and Hispanics to be "charged higher markups than other, similarly situated, white consumers." For more, including links to the bulletin, a fact sheet on the bulletin and an infographic on auto lending, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Mar 19, 2013

CFPB Director Richard Cordray explains proposed rule on student loan servicers
 

During a press call in Washington, D.C., last week, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray discussed the bureau's proposed rule to redefine certain student loan servicers so that they fall under the authority of the CFPB. Cordray said that because borrowers have "no control or choice over which company services a loan," complaints abound from borrowers over a lack of customer service and the availability of information from these servicers. With student loan debt totaling more than $1 trillion by the end of 2012, Cordray said that the "rapid growth of this market and the recent rise of delinquency rates" demands the bureau's attention. For more, read the full story.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Mar 18, 2013

Proposed rule would enable the CFPB to monitor larger nonbank student loan servicers
 

Last week, the Consumer Financial Protection Bureau (CFPB) announced a proposed rule that would expand federal supervision over student loan servicers beyond larger banks to include certain nonbanks for the first time, according to a press release from the bureau. Nonbank student loan servicers that handle more than 1 million borrower accounts for either federal or private student loans would be classified as "larger participants," allowing the CFPB to monitor them for compliance with federal consumer financial laws. With this new definition, the bureau would have the authority to supervise "the seven largest student loan servicers," which manage a combined 49 million borrower accounts. The rule comes as part of the bureau's ongoing efforts to monitor and regulate the student loan industry (see our December 17, 2012, blog post for more information). For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Mar 15, 2013

Comptroller of the Currency Thomas J. Curry discusses community bank and thrift supervision
 

At the Independent Community Bankers of America National Convention & Techworld in Las Vegas, Nevada, Thursday, Comptroller of the Currency Thomas J. Curry discussed what the Office of the Comptroller of the Currency is doing to support community bank and thrift institutions and “what community banks and thrifts need to do to remain strong and profitable,” according to his prepared remarks. “Small banks and thrifts are the lifeblood of communities across America, and they are a key focal point for the Office of the Comptroller of the Currency,” Curry said. For more, read Curry’s full remarks.


 
Posted by A. Sharett in  Federal Regulatory  Office of the Comptroller of the Currency    |   Permalink

 

Mar 11, 2013

Register now for the Bank Safety & Soundness Advisor’s webinar on QMs and ATP rules
 

Bricker & Eckler Partner Anthony Sharett will be among a panel of experts who will present during the Bank Safety & Soundness Advisor’s upcoming webinar on the impact of the new qualified mortgage (QM) and ability to repay (ATP) rules recently released by the Consumer Financial Protection Bureau (CFPB). The 90-minute webinar — scheduled for Tuesday, March 26, at 2 p.m. EST — will address the types of loans that fit the CFPB’s new definition for qualified mortgages, what it means to qualify for ability to repay (ATR) standards, and how these new rules will impact the profitability of mortgages. For more, including registration information, visit the webinar website.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Feb 27, 2013

CFPB Director Richard Cordray highlights the bureau’s successes during a national credit union meeting in Washington, D.C.
 

At the Credit Union National Association’s 2013 Governmental Affairs Conference in Washington, D.C., today, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray praised credit unions for serving as “the true consumer protectors” before the bureau was established, according to his prepared remarks. He also explained that since most credit unions do not fall under the bureau’s supervision because they have $10 billion or less in assets, the CFPB created the Credit Union Advisory Council to fill in the gap of day-to-day contact between the bureau and credit unions. Director Cordray then provided in-depth explanations of the bureau’s Ability-to-Repay rule (otherwise known as the Qualified Mortgage rule) as well as its implementation of common-sense requirements for mortgage servicers, saying that small institutions like credit unions are exempt from several of these rules’ provisions due to the bureau’s “recognition and acknowledgement that the traditional credit union lending model is deserving of respect and should be treated differently under our rules.” For more, read the full transcript of Director Cordray’s remarks. 


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory  National Credit Union Administration   |   Permalink

 

Feb 26, 2013

CFPB Director Richard Cordray outlines the bureau's efforts during a national attorneys general meeting in Washington, D.C.
 

At the 2013 winter/spring meeting of the National Association of Attorneys General in Washington, D.C., today, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray spoke about the work the bureau is doing to create "a fairer, more transparent marketplace — one where prices and risks are made clear and where consumers are protected against fraud," and how those efforts are helped through collaboration with state governments, according to his prepared remarks. Efforts include creating new rules to protect against excesses and irresponsible practices in the mortgage market; regulating and monitoring the credit card market as well as the student loan industry; developing tools to help consumers navigate the financial market; and simplifying loan forms. For more, read the full transcript of Cordray’s prepared remarks.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Feb 22, 2013

CFPB works to develop alternative repayment options for private student loan borrowers
 

Yesterday, the Consumer Financial Protection Bureau (CFPB) released a Notice and Request for Information in the Federal Register as part of its ongoing effort of devising ways to give private student loan borrowers “more flexible repayment options,” according to a press release from the bureau. Such borrowers are having “trouble negotiating affordable repayment plans with their lenders and servicers” on private loans, which — unlike federal student loans — offer no income-based repayment, long-term forbearance or rehabilitation options if the borrower defaults. According to the release, the bureau is seeking input on the following issues:

  • How student loan burdens might impact the broader economy and hinder access to mortgage credit and automobile loans;
  • How distressed borrowers manage their student loan obligations;
  • What options currently exist for borrowers to lower their monthly payments on private student loans;
  • Examples of successful alternate payment programs in other markets and which features could apply to this market; and
  • The most effective mechanisms for communicating with distressed borrowers.

Comments will be accepted until April 8, 2013. For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Feb 18, 2013

Register now for the Bank Safety & Soundness Advisor’s fair lending webinar
 

Bricker & Eckler partner Anthony Sharett will be among a panel of experts who will present during the Bank Safety & Soundness Advisor’s Disparate Impact and Fair Lending Enforcement webinar on March 5, 2013, at 2 p.m. EST. The 90-minute webinar is designed to teach community bankers and credit unions how to avoid fair lending actions from regulators. Topics include warning signs that regulators look for in financial institutions; how to avoid being dragged into a fair lending infraction by a third-party vendor; and regulatory issues related to marketing and advertising. For more, including registration information, visit the webinar website.


 
Posted by A. Sharett in  Federal Regulatory   |   Permalink

 

Feb 13, 2013

CFPB announces implementation plan for new mortgage rules
 

The Consumer Financial Protection Bureau (CFPB) announced a plan today that it will implement during 2013 to help ensure that the mortgage industry is in compliance with new consumer protections that are set to go into effect in January 2014, according to a press release from the bureau. To ensure that the Ability-to-Pay rule, as well as new rules for mortgage servicing, appraisals, escrow accounts, high-cost mortgages, and compensation and qualifications for loan originators are “understood, applied, and carried out evenly and effectively,” the CFPB will take the following actions:

  • Coordinate with other federal government regulators to help promote “a consistent regulatory experience for industry”
  • Publish plain-language, easy-to-understand written and video guides this spring that will be especially useful for “smaller businesses with limited staff for compliance”
  • Beginning in the spring, publish updates to official interpretations that will answer questions and provide guidance on how to comply with the rules with priority given to the issues that are important to the largest number of providers or consumers and those that “critically affect mortgage companies’ implementation decisions”
  • Publish readiness guides in the summer that will feature checklists and suggested implementation plans, and later this year publish more in-depth implementation procedures that can be used for “self-assessments and internal reviews”
  • Pursue a broad-reaching consumer education program as the implementation date approaches

For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory   |   Permalink

 

Feb 07, 2013

OCC clarifies CFPB’s final rule for reporting thresholds
 

The Office of the Comptroller of the Currency (OCC) recently released a bulletin to explain that because the Consumer Financial Protection Bureau (CFPB) “raised the asset size exemption threshold to $42 million for depository institutions” with respect to the requirements of Regulation C — which implemented the Home Mortgage Disclosure Act (HMDA) — institutions with “assets of $42 million or less as of December 31, 2012,” will not be required to collect HMDA data in 2013. The adjustment, which raises the threshold from $41 million to $42 million, is effective for data collection in 2013 and does not affect “the institution’s responsibility to report data” that it was required to collect in 2012, the bulletin said. For more, read the full bulletin.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory  Office of the Comptroller of the Currency    |   Permalink

 

Jan 31, 2013

Steven Antonakes named acting deputy director of the CFPB
 

Today — Raj Date’s last day serving as deputy director of the Consumer Financial Protection Bureau (CFPB) — the bureau announced that Steven Antonakes will temporarily serve as deputy director of the agency while still maintaining his current duties as the bureau’s associate director of supervision, enforcement, and fair lending, according to a press release from the CFPB (see our November 14, 2012, blog post for more information). For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Jan 31, 2013

CFPB seeks comment on campus financial products marketed to students
 

The Consumer Financial Protection Bureau (CFPB) announced today that it is launching an inquiry into the financial products and services that are marketed to students through universities and colleges to determine “whether these arrangements are in the best interest of students,” according to a press release from the bureau. Although the Credit CARD Act of 2009 “restricted financial institutions from using certain types of marketing practices on college campuses” and made agreements between financial and academic institutions subject to public disclosure, certain campus financial products — including school-affiliated bank accounts, student ID cards that double as debit cards, and cards used to access student loans and scholarships — fall outside the scope of the CARD Act. The bureau is seeking comment from families, students, the public, the higher education community and financial institutions regarding their experiences with these products. For more, including a guide to financial services for college students and a consumer advisory for students about potential financial pitfalls, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Jan 30, 2013

Companies consider balking at the CFPB’s requirements as the validity of Director Cordray’s appointment hangs in the balance
 

Since the U.S. Court of Appeals for the D.C. Circuit ruled last week that three recess appointments made by President Obama were invalid, companies subject to oversight by the Consumer Financial Protection Bureau (CFPB) are questioning whether the fact that CFPB Director Richard Cordray’s appointment was made on the same day will be a potential game changer, The National Law Journal reports (see our January 25, 2013, blog post for more information). The Dodd-Frank Act of 2010 prohibits the CFPB from using any powers that it didn’t inherit from seven other agencies if it doesn’t have a director, which means the agency cannot supervise non-banks if it doesn’t have a director, the article said. While some of these companies may decide to balk at the bureau’s compliance demands should Cordray’s appointment be deemed invalid, some lawyers are advising against this, insisting that the bureau is not going anywhere and treating inspectors poorly while potential legal issues play out will not help these companies in the long run, the article said. For more, read the full story (subscription required).


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory   |   Permalink

 

Jan 25, 2013

Federal appeals court finds President Obama’s recess appointments unconstitutional
 

A three-judge panel of the U.S. Court of Appeals for the District of Columbia ruled today that President Barack Obama “violated the Constitution when he used controversial recess appointments last year to fill three vacancies on the National Labor Relations Board,” The Columbus Dispatch reports. The ruling could mean that President Obama’s recess appointment of former Ohio Attorney General Richard Cordray to head the Consumer Financial Protection Bureau last year may also be found unconstitutional since it took place on the same day as the three NLRB appointments — January 12, 2012. However, because the Obama administration has vowed to appeal the ruling to the U.S. Supreme Court, Cordray — whom the president re-nominated on Thursday — will likely stay on at his post until the Court issues a decision, the article said. For more, read the full story.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Jan 24, 2013

Register now for OMBA’s QM seminar
 

The Ohio Mortgage Bankers Association (OMBA) is hosting a “QM and Truth-in-Lending Final Rules and Your Mortgage Lending Business” seminar on Friday, February 1, 2013, from 1 to 4 p.m. at Bricker & Eckler’s downtown Columbus office. Bricker & Eckler Partner Anthony Sharett will cover the two final rules and one proposed rule released by the Consumer Financial Protection Bureau (CFPB) in early January, providing a thorough discussion of what is required of a lending institution and its staff. For more information or to register to attend the event, contact OMBA Executive Director and COO Marianne Collins at omba@ohiomba.org.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Jan 24, 2013

OCC to host workshop on board participation requirements
 

The Office of the Comptroller of the Currency (OCC) announced today that it will host a workshop for directors of institutions that are supervised by the OCC that is designed to provide “practical information on the fundamental requirements of board participation,” according to a press release from the office. The workshop, which is one of 37 being offered across the United States to “enhance and expand the skills of national community bank and federal savings association directors,” will take place March 4-6 at The Brown Hotel in Louisville, Kentucky, the release said. For more, read the full press release.


 
Posted by A. Sharett in  Federal Regulatory  Office of the Comptroller of the Currency    |   Permalink

 

Jan 22, 2013

CFPB temporarily delays implementation of international remittance transfer rules
 

The Consumer Financial Protection Bureau (CFPB) announced today that it is temporarily delaying implementation of its international remittance transfer rules that were slated to go into effect on February 7, 2013, according to a press release from the bureau. The as-yet-unannounced new implementation date will allow time for review following the January 30, 2013, closing of the comment period for substantive changes to the final rule (see our December 26, 2012, blog post for more information). For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Jan 19, 2013

CFPB and Federal Reserve issue appraisals rule for higher-priced mortgage loans
 

The Consumer Financial Protection Bureau (CFPB) has been busy. In the past eight days, it has issued the much anticipated qualified mortgage standards, amended the high-cost mortgage and homeownership counsel amendments (HOEPA), and, most recently, issued a rule regarding appraisals for higher priced (subprime) mortgage loans (HPMLs) on January 18, 2013. 

This rule implements amendments to the Truth in Lending Act (TILA) enacted in Dodd-Frank. The rule permits a lender to extend an HPML only if the following conditions are met:

  • The lender obtains a written appraisal;
  • The appraisal is performed by a licensed or certified appraiser; and
  • The appraiser physically inspects the property from the inside.

What’s more, the rule requires lenders to notify the borrower at the application stage about the appraisal, that the applicant will receive a copy of the appraisal, the applicant will pay for the appraisal, and that the applicant may have a separate appraisal conducted at her expense.

Importantly, mortgages provided under the new qualified mortgage rule are exempt from this new rule as are reverse mortgages, some construction loans, short-term bridge loans, loans for manufactured homes, and transactions secured by a mobile home, boat or trailer. The rule is effective January 18, 2014. A link to the entire appraisal rule is here


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Deposit Insurance Corporation  Federal Regulatory   |   Permalink

 

Jan 11, 2013

CFPB issues final rules for high-cost mortgages
 

The Consumer Financial Protection Bureau (CFPB) issued final rules yesterday for high-cost mortgages that ban balloon payments, which are large, lump sum payments usually due at the end of a loan, with some exceptions. The rules also ban and limit certain fees and practices, including a ban on fees for modifying loans; capping late fees at four percent of the payment that is past due; prohibiting closing costs from being rolled into the loan amount; and restricting fees for payoff statements, according to a press release from the bureau. The rules also ban the practice of “encouraging a consumer to default on an existing loan to be refinanced by a high-cost mortgage.” The rules require consumers to receive housing counseling before taking out a high-cost mortgage and require lenders to provide a list of homeownership counseling organizations to consumers “shortly after they apply for a mortgage.” Creditors are now also required to extend the duration of an escrow account on high-cost mortgage loans from the current one year minimum to a minimum of five years. For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory   |   Permalink

 

Jan 10, 2013

CFPB issues ability-to-repay rule and defines “qualified mortgage”
 

The Consumer Financial Protection Bureau (CFPB) adopted the ability-to-repay rule today, which requires lenders to “ensure prospective buyers have the ability to repay their mortgage” in an effort to protect consumers from what the bureau calls “irresponsible mortgage lending,” a press release from the CFPB said. The rule requires lenders to verify consumers’ financial information, including their employment status, income and assets, current debt obligations, credit history and mortgage payment information, the release said. The new rule also says that lenders must verify that a borrower has “sufficient assets or income” to repay a loan and that teaser rates can no longer be used to determine a borrower’s ability to repay “both the principal interest and the interest over the long term.”

The bureau also defined criteria for qualified mortgages — they cannot have excessive upfront points and fees or “toxic loan features,” such as interest-only payments, terms exceeding 30 years or negative-amortization payments, the release said. Qualified mortgages will also cap the debt-to-income ratio at 43 percent or less to ensure that consumers can afford the loan.

For more, read the full press release and fact sheet, as well as prepared remarks that CFPB Director Richard Cordray presented during the ability-to-pay rule field hearing.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory   |   Permalink

 

Dec 26, 2012

CFPB issues proposed revisions to money-transfer rules
 

Last week, the Consumer Financial Protection Bureau (CFPB) issued proposed revisions to a rule designed to protect consumers who transfer money internationally by requiring remittance transfer providers to "disclose certain fees and taxes, as well as the exchange rate that will apply to the transfer," according to a press release from the bureau (see the Nov. 30, 2012, blog post — "CFPB will revise money-transfer rules amid concerns from banks"— for more information). The proposed changes would provide "increased flexibility and guidance" regarding disclosure of foreign taxes and institution fees, and would protect providers from having to bear the cost of unrecoverable funds if it can be demonstrated that "the consumer provided an incorrect account number and certain other conditions are satisfied," the release said. Additionally, the proposed rules would eliminate the requirement that taxes imposed by foreign regional, provincial, state or other local governments be disclosed, while requiring such disclosure for foreign taxes imposed by a country's central government, the release said. For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Dec 20, 2012

CFPB is seeking public comment on the CARD Act
 

The Consumer Financial Protection Bureau (CFPB) announced this week that it is seeking public comment on how the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) has impacted consumers’ daily lives and the behavior of the credit card market, according to a press release from the CFPB. The bureau is specifically requesting comment on the following:

  • How the terms and conditions of credit card agreements have changed and how the practices of credit card issuers regarding disclosures of rates and fees have changed and affected consumers
  • The success of protections against unfair or deceptive acts or practices and whether issuers have circumvented or tried to circumvent these protections
  • Changes in the cost and availability of credit
  • The use of risk-based pricing in the credit market

For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Dec 19, 2012

Annual CRA asset-size threshold adjustment announced for small and intermediate small institutions
 

A joint release from the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency announced the annual adjustment to the asset-size thresholds that are “used to define small bank, small savings association, intermediate small bank, and intermediate small savings association under the Community Reinvestment Act (CRA) regulations.” Under the CRA rules, asset-sized thresholds must be evaluated and adjusted each year based on the change in the average of the Consumer Price Index (CPI), the release said. For more, including the annual adjustments and historical asset-size threshold data, click here.


 
Posted by A. Sharett in  Federal Deposit Insurance Corporation  Federal Regulatory  Office of the Comptroller of the Currency    |   Permalink

 

Dec 17, 2012

CFPB releases Student Lending Examination Procedures
 

The Consumer Financial Protection Bureau (CFPB) announced today that it has released an extension to its General Supervision and Examination Manual that will serve as a field guide for CFPB examiners to ensure large banks and nonbanks that make private student loans have the “appropriate processes in place to prevent harm to borrowers,” according to a press release from the bureau. The Student Lending Examination Procedures will verify that these institutions are doing the following with regard to student loans:

  • Using accurate, non-discriminatory advertising or marketing
  • Making appropriate disclosures regarding loan costs and terms
  • Providing borrowers with accurate account information such as monthly payment requirements, charges, fees and interest rate changes
  • Using adequate procedures to handle borrower inquiries and complaints.

The bureau also announced the availability of the following new consumer tools:

  • Guides for students and families shopping for student loans and managing money while in college
  • A comparison tool to help students and their families compare financial aid offers from multiple schools
  • A new web tool to help student loan borrowers navigate their repayment options.

For more, read the full press release and the Student Lending Examination Procedures.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Dec 14, 2012

CFPB proposes rule to allow financial services companies to run trial disclosure programs
 

Yesterday, the Consumer Financial Protection Bureau (CFPB) announced a proposed policy that would allow “banks, credit unions, and other financial services companies to propose and conduct trial disclosure programs” on a case-by-case basis to help the bureau identify the best ways to provide the information consumers need to “make financial decisions in a marketplace of evolving programs and products,” according to a press release from the bureau. For a company to be granted a waiver from current disclosure requirements to pursue a proposed trial, the CFPB will evaluate how the trial will improve consumer understanding with regard to the costs, benefits and risks of products and services; how it will “help develop more cost-effective disclosure rules or policies”; and the extent to which the program is designed to “mitigate any risk to consumers,” the release said. For more, read the full press release and the proposed policy.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Dec 13, 2012

CFPB releases report on the U.S. credit reporting system
 

Yesterday, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray announced the release of a CFPB report on the big three credit reporting companies — Equifax, Experian and TransUnion — outlining how they manage consumer data, according to The Columbus Dispatch and prepared remarks from Cordray. Calling it “one of the most comprehensive looks at the credit reporting industry to date,” the report explores how these companies collect, organize and maintain consumer credit information, Cordray said. According to a CFPB press release, key takeaways in the report, titled “Key Dimensions and Processes in the U.S. Credit Reporting System: A review of how the nation’s largest credit bureaus manage consumer data,” are:

  • More than half of the trade lines in the credit bureau databases are supplied by the credit card industry
  • More than a third of disputes have to do with collections
  • Less than one in five people obtain copies of their credit report each year
  • Most information contained in credit reports comes from a few large companies
  • Most complaints are forwarded to the furnishers that provided the original information

For more, read The Columbus Dispatch article and Director Cordray’s remarks, as well as the full CFPB press release and report.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Nov 30, 2012

CFPB reminds nationwide specialty consumer reporting agencies to provide a streamlined process for consumers requesting free annual consumer reports
 

The Consumer Financial Protection Bureau released a bulletin yesterday to nationwide specialty consumer reporting agencies reminding them of “their obligation under the law to provide a streamlined process for consumers to request a free annual consumer report,” according to a press release from the bureau. In addition, the CFPB also issued warning letters to agencies that may be violating the law by failing to provide an easy way for consumers to get free access to these annual reports, the release said. Consumers not only have a right to a free annual report from the largest three credit bureaus, but also from nationwide specialty consumer reporting agencies, which “primarily collect and provide specific types of information on a consumer’s history,” such as medical payments, employment, tenancy, check-writing or insurance claims, the release said. For more, read the press release and the bulletin.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Nov 30, 2012

CFPB will revise money-transfer rules amid concerns from banks
 

After banks complained that rules for international money transfers established by the Consumer Financial Protection Bureau that were supposed to take effect on February 7 could push them out of business, the bureau announced this week that it will issue revised rules for comment in December, Bloomberg reports. The changes will address “what should happen if a consumer provides an incorrect account number for a transfer and how remittance providers must disclose third-party fees and foreign taxes,” the article said. For more, read the full story.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Nov 20, 2012

CFPB and FTC crackdown on misleading or deceptive mortgage advertisements
 

The Consumer Financial Protection Bureau and the Federal Trade Commission have teamed up to investigate mortgage fraud through deceptive ads by mortgage brokers, homebuilders and other non-bank entities, the National Law Journal reports. Looking for potential violations of the 2011 Mortgage Acts and Practices Advertising Rule, which “bars misleading claims about government affiliation, interest rates, fees, costs, payments associated with the loan, and the amount of cash or credit available to the consumer,” the agencies have opened 19 investigations of the “most egregious offenders” and have sent warning letters to “companies with lesser violations,” the article said. For more, read the full story (subscription required).


 
Posted by D. Gibson in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Nov 15, 2012

New CFPB initiative encourages consumer-friendly innovation
 

The Consumer Financial Protection Bureau (CFPB) recently announced the launch of Project Catalyst, an initiative that seeks to “encourage consumer-friendly innovation and entrepreneurship in markets for consumer financial products and services,” according to a press release from the bureau. Project Catalyst will enable the CFPB to better engage with those companies at the forefront of innovation and to better understand new and emerging products and trends in the marketplace. The bureau has already partnered with three companies — BillGuard, Plastyc and Simple — with the intention of analyzing their data to gain insight about “consumer behaviors and trends” that will ultimately shape policy decisions, the release said. For more, read the press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory   |   Permalink

 

Nov 14, 2012

CFPB Deputy Director Raj Date stepping down
 

Raj Date, deputy director of the Consumer Financial Protection Bureau (CFPB), is stepping down from the agency at the end of January 2012, Bloomberg News reports. A former executive at Capital One and Deutsche Bank, Date argued for the creation of the bureau alongside Elizabeth Warren during the debate over Dodd-Frank. Following Warren’s departure from the bureau in July 2011, Date became its head and the CFPB’s special adviser to the Treasury secretary, the article said. After President Barack Obama appointed Richard Cordray to be the bureau’s director in January 2012, Date became the agency’s deputy director.

In an email announcing Date’s decision to leave the agency, bureau spokeswoman Jen Howard praised his leadership and data-driven approach. The timing of Date’s departure from the bureau will allow him to “finish work on some mortgage service regulations” and “help wrap up several mortgage rules the CFPB is due to finalize by January, notably one on so-called qualified mortgages,” the article said. For more, read the full story.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Nov 13, 2012

Eligible borrowers have until December 31, 2012, to request a free, impartial foreclosure review
 

As directed by the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System, mortgage servicers are undertaking a number of advertising and outreach efforts in multiple languages to remind eligible borrowers in communities “hardest hit by mortgage foreclosures” of the December 31 deadline to request a free, impartial review through the Independent Foreclosure Review, according to a press release from the OCC. The free review is part of an April 2011 enforcement action that “required 14 large mortgage servicers to retain independent consultants to conduct a comprehensive review of foreclosure activity in 2009 and 2010 to identify borrowers who may have been financially injured due to errors, misrepresentations, or other deficiencies in the foreclosure process,” the release said. For more, read the press release and visit the Independent Foreclosure Review website.


 
Posted by A. Sharett in  Federal Regulatory  Federal Reserve System   Office of the Comptroller of the Currency    |   Permalink

 

Nov 12, 2012

Mortgage bankers and realtors fear a “perfect storm” of regulation
 

Federal rules establishing “standards for non-abusive lending” and requiring “banks to hold a slice of risky mortgages on their books” are to take effect in January, which is making lenders concerned that if additional rules in the form of “capital standards mandated in the international Basel III accords” are released around the same time, the multiple rules “might overlap or conflict” to create a “perfect storm of regulation,” Bloomberg News reports. Consumer advocates call the mortgage industry’s fears ”overblown” and insist it be “more judicious with its complaints” as the industry routinely insist that any rule will “increase the cost of credit or reduce access to credit,” the article said. For more, read the full story.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Nov 09, 2012

Capital regulatory rules proposed in June will not go into effect on January 1, 2013
 

According to a joint release from the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, the three proposals to revise and replace the current capital regulatory rules that were announced in June will not become effective on January 1, 2013, due to concerns from industry participants that they would not have “sufficient time to understand” the final regulatory capital rule or to “make necessary system changes.” The U.S. federal banking agencies said that while they “take seriously our internationally agreed timing commitments” as members of the Basel Committee on Banking Supervision, they must take “operational and other considerations into account” when determining appropriate dates for transition and implementation, the release said. For more, read the press release.


 
Posted by A. Sharett in  Federal Deposit Insurance Corporation  Federal Regulatory  Federal Reserve System   Office of the Comptroller of the Currency    |   Permalink

 

Nov 09, 2012

What the election results mean for Dodd-Frank and the CFPB
 

Many in the financial services industry were watching the presidential election results closely. This is particularly true of the companies within the financial services industry under the regulatory and enforcement purview of the Consumer Financial Protection Bureau (CFPB).  

Presidential candidate Mitt Romney had explained on the campaign trail that he would work diligently to repeal Dodd-Frank and disband the CFPB. He and others believe that the regulatory and enforcement powers of the CFPB are unchecked and have inundated the industry with unnecessary new rules and regulations. 

The House Committee on Financial Services recently announced that regulators have written 224 of the 400 new rules promulgated as a result of Dodd-Frank — these rules consume 7,365 pages. 

But despite the opposition to Dodd-Frank and the CFPB, President Barack Obama’s re-election means that both are here to stay. Indeed, President Obama has made consumer protection a focus in his first administration and all signs suggest that will continue. What’s more, with the election of Elizabeth Warren to the United States Senate, she will no doubt continue to champion causes aimed at consumer protection.

Recently, Director Cordray presented the five-year strategic plan for the CFPB. Now, it appears that the plan is even more relevant than it was just a few weeks ago.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory   |   Permalink

 

Nov 02, 2012

CFPB and FHFA partner to develop a National Mortgage Database
 

The Federal Housing Finance Agency (FHFA) and the Consumer Financial Protection Bureau (CFPB) are partnering to create a National Mortgage Database, which will be “the first comprehensive repository of detailed mortgage information” but will not include personally identifiable information, according to a press release from the CFPB. The database, which will be used to support the agencies’ policymaking and research efforts, will include “loan-level data about the mortgage including: the borrower’s financial and credit profile; the mortgage product and terms; the property purchased or refinanced; and the ongoing payment history of the loan,” the release said. The database is also intended to help regulators “better understand emerging mortgage and housing market trends” so that they may develop appropriate consumer protections. For more, including examples of how the database can support the agencies’ work, read the press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Nov 01, 2012

CFPB releases report highlighting market problems discovered through supervision
 

The Consumer Financial Protection Bureau (CFPB) released its first Supervisory Highlights report outlining “problems CFPB examiners discovered through the agency’s supervision process,” according to a press release from the bureau. The report, which details supervision work from July 21, 2011, to September 30, 2012, uncovered issues pertaining to credit line increase processes, compliance with fair credit reporting requirements and mortgage disclosure procedures.

The CFPB also published an appeals process for supervised institutions and an updated version of the CFPB Supervision and Examination Manual, a field guide used by examiners, the release said. For more, read the press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Oct 26, 2012

CFPB Director Cordray discusses consumer advocacy at the National Consumer Law Center Conference in Seattle
 

Consumer Financial Protection Bureau (CFPB) Director Richard Cordray delivered prepared remarks during the National Consumer Law Center Conference in Seattle yesterday. Cordray discussed several of the CFPB’s efforts to “improve the daily lives and financial opportunities for consumers,” including its supervision of consumer debt collectors and its new mortgage servicing standards. Cordray highlighted the bureau’s efforts to increase the transparency of the private student loan industry and also described how it is beginning to penalize those who “violate the law and cause meaningful consumer harm.” For more, read Director Cordray’s prepared remarks.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Oct 25, 2012

New CFPB rule subjects debt collection lawyers to federal regulations
 

As part of the Consumer Financial Protection Bureau’s new rule establishing for the first time federal supervision authority over debt collectors, debt collection lawyers in firms with “more than $10 million in annual receipts from consumer debt collection activities” will be subject to the bureau’s field examiners who will review these firms' procedures, “evaluate the quality of their compliance and identify risks to consumers,” the National Law Journal reports. Opponents call federal regulation of the practice of law inappropriate and a potential interference with the attorney-client privilege. The bureau did limit its jurisdiction to lawyers whose “principal business activity is debt collection,” but justified keeping the overall provision by arguing that “consumer debt collection is a consumer financial service” and that debt collection attorneys do not provide “legal advice or services to those consumers,” the article said. For more, read the full story.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Oct 24, 2012

CFPB is now accepting complaints about credit reporting
 

The Consumer Financial Protection Bureau (CFPB) announced Monday that it will begin accepting consumer complaints about credit reporting, according to a press release from the bureau. Consumer credit reporting agencies include the “three largest credit reporting companies that sell comprehensive consumer reports; consumer report resellers that repackage information they buy from the largest companies; and specialty consumer reporting companies that primarily collect and provide specific types of information like on payday loans or checking accounts,” the release said.

This marks the first time that consumers have been able to access individual-level complaint assistance about credit reporting at the federal level. Consumers must first file a dispute and get a response from the credit reporting agency; if the agency does not respond or the consumer is dissatisfied with the resolution, the consumer may contact the CFPB for assistance with the following issues:

  • Incorrect information on a credit report;
  • A consumer reporting agency’s investigation;
  • The improper use of a credit report;
  • Being unable to get a copy of a credit score or file; and
  • Problems with credit monitoring or identify protection services.

For more, read the press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Oct 24, 2012

CFPB to oversee debt collectors beginning January 2, 2013
 

A rule published today by the Consumer Financial Protection Bureau (CFPB) established that beginning on January 2, 2013, the CFPB will be the first federal institution ever to supervise the larger consumer debt collectors, according to a press release from the bureau. Any firms engaging in three main types of debt collection with more than $10 million in “annual receipts from consumer debt collection activities” — which is approximately 175 debt collectors and 60 percent of the industry’s annual receipts — will be under the jurisdiction of the bureau, the release said.

In addition to creating a debt collection question and answer section for its Ask CFPB database, the bureau also released a field guide to help examiners “ensure that companies and banks engaging in debt collection are following the law,” the release said. This field guide will help examiners evaluate, among other things, whether debt collectors provide required disclosures and accurate information; have a complaint and dispute resolution process; and communicate civilly and honestly with consumers, the release said.

For more, read the press release. Check back for a more comprehensive analysis of the bureau’s procedures regarding the supervision of debt collectors.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Oct 22, 2012

OCC Deputy Comptroller Carolyn G. DuChene discussed enterprise risk management at community bank seminar
 

Deputy Comptroller for Operational Risk Carolyn G. DuChene discussed the importance of enterprise risk management in banking during a seminar for community banks held by Bank Safety & Soundness Advisor, according to a press release from the Office of the Comptroller of the Currency (OCC). During her presentation, DuChene “stressed the links between risk management and strategic and capital planning,” the release said. For more, including a full transcript of her remarks, read the press release.


 
Posted by A. Sharett in  Federal Regulatory  Office of the Comptroller of the Currency    |   Permalink

 

Oct 15, 2012

Comptroller of the Currency Thomas J. Curry addressed the American Bankers Association today
 

Today, Comptroller of the Currency Thomas J. Curry spoke at the American Bankers Association’s national convention in San Diego, California, about regulatory issues facing federal savings associations and national banks, according to a press release from the OCC. Curry addressed the various concerns these institutions have regarding implementation of the Dodd-Frank Act, with particular attention paid to how smaller community banks can achieve compliance. For more, read the press release and Curry’s prepared remarks.


 
Posted by A. Sharett in  Dodd-Frank  Federal Regulatory  Office of the Comptroller of the Currency    |   Permalink

 

Oct 11, 2012

CFPB releases draft strategic plan for public comment
 

The Consumer Financial Protection Bureau (CFPB) released its draft strategic plan for 2013-2018 on October 10, 2012. The document outlines the bureau’s mission, vision and values and describes four strategic goals that it aims to achieve over the next five years, including preventing financial harm to consumers while promoting practices that benefit them; empowering consumers to live better financial lives; informing the public, policy makers and the bureau’s own policy-making with data-driven analysis of consumer finance markets and consumer behavior; and advancing the bureau’s performance by maximizing resource productivity and enhancing impact. The bureau is inviting public comment on the draft plan through October 25, 2012. For more, read the draft strategic plan.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Oct 10, 2012

OCC releases final rule for large bank stress tests
 

Yesterday, the Office of the Comptroller of the Currency (OCC) announced the publication of its final rule regarding company-run stress testing, which is required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The rule applies to all financial institutions with total consolidated assets greater than $10 billion that are “regulated by a primary federal financial regulatory agency,” according to a press release from the OCC. The rule requires institutions with average total consolidated assets of $50 billion or more to begin conducting annual stress tests this year, but delays implementation for institutions that have between $10 and $50 billion in total consolidated assets until October 2013, the release said. For more, read the press release and the final rule.


 
Posted by A. Sharett in  Dodd-Frank  Federal Regulatory  Office of the Comptroller of the Currency    |   Permalink

 

Oct 03, 2012

Inaugural CFPB Consumer Advisory Board Meeting Held
 

Consumer Financial Protection Bureau (CFPB) Director Richard Cordray held the bureau’s first board meeting on September 27, 2012 in St. Louis. The public meeting had approximately 200 in attendance and provided Cordray an opportunity to summarize the bureau’s accomplishments during its first year in existence and a snapshot of its future priorities.  In addition, 25 members of the Consumer Advisory Board were sworn in.

During the meeting, Director Cordray applauded the “Know Before You Owe” program and explained that providing an opportunity for consumers to tell their stories has given the CFPB a roadmap toward consumer protection.  He also emphasized that the bureau’s future success depends upon accessibility to the American public. 

For more information on the meeting, read this Bricker & Eckler Bulletin.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Oct 02, 2012

OCC orders American Express to pay $6 million in restitution and $500,000 civil money penalty
 

The Office of the Comptroller of the Currency (OCC), in coordination with the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau (CFPB) and the Federal Deposit Insurance Corporation (FDIC), announced yesterday that American Express Bank was assessed a $500,000 civil money penalty for “violations of section 5 of the Federal Trade Commission Act,” according to a press release from the OCC. The penalty is based on “the bank’s failure to properly manage vendors who engaged in deceptive debt collection practices,” the release said. American Express Bank was also ordered to provide an estimated 17,000 affected customers with approximately $6 million in restitution, and to “establish an effective vendor management program to oversee the provision of products to the bank’s customers,” the release said. For more, read the press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Sep 30, 2012

Sharett to join panel at MBA Regulatory Compliance Conference
 

On September 30, 2012, Anthony Sharett will be a panelist for the Litigation Forum Session titled "Enforcement" at the Mortgage Bankers Association's Regulatory and Compliance Conference. The session focuses on the array of enforcement actions brought by state and federal regulators and strategies for addressing them. Joining Anthony on the panel will be Paul Hancock, an attorney with K&L Gates, and David Souders, an attorney with Weiner Brodsky Sidman Kider PC.

The three day conference is in Washington, D.C. More information can be found here.


 
Posted by A. Sharett in  Dodd-Frank  Federal Regulatory  Ohio Regulatory   |   Permalink

 

Sep 28, 2012

CFPB to host webinar on new remittance rule, releases list of countries that qualify for exception
 

The Consumer Financial Protection Bureau’s new remittance rule, which creates consumer protections for certain electronic transfers to other countries, will go into effect on February 7, 2013. The bureau is hosting a webinar on Tuesday, October 16, 2012, to help the financial industry understand and comply with the rule. In addition, they are releasing a small business guide and a list of “countries and other areas to which a particular exception to the rule’s disclosure requirements applies,” according to a press release from the bureau. For more, read the press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory   |   Permalink

 

Sep 25, 2012

Federal regulatory agencies release regulatory capital estimation tool
 

The Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency announced yesterday that a regulatory capital estimation tool is now available to help community banks and other institutions “estimate the potential effect” that recently proposed regulatory capital rules “could have on their capital ratios,” according to a joint press release from the agencies. The tool is available for banks and savings associations, as well as bank and savings and loan holding companies. For more, read the press release.


 
Posted by A. Sharett in  Federal Regulatory   |   Permalink

 

Sep 24, 2012

CFPB and FDIC order Discover Bank to refund $200 million to customers, pay $14 million fine
 

The Consumer Financial Protection Bureau (CFPB) and the Federal Deposit Insurance Corporation (FDIC) issued a joint press release today announcing that Discover Bank has been ordered to “refund approximately $200 million to more than 3.5 million consumers and pay a $14 million civil money penalty,” according to a release from the bureau. The $14 million civil money penalty will be split evenly between the U.S. Treasury and the CFPB’s Civil Penalty Fund. An investigation initially undertaken by the FDIC and joined by the CFPB last year found that Discover used “deceptive telemarketing and sales tactics” to mislead customers into paying for various add-on credit card services, such as payment protection, credit score tracking, identity theft protection and wallet protection, the release said. For more, read the press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Sep 21, 2012

Transcript of CFPB Director Richard Cordray’s remarks at CFED conference now available online
 

The prepared remarks that Consumer Financial Protection Bureau (CFPB) Director Richard Cordray recently gave during the Corporation for Enterprise Development (CFED) 2012 Assets Learning Conference in Washington, D.C., are now available on the bureau’s website. According to the CFED website, the organization’s goal is to empower “low- and moderate-income households to build and preserve assets by advancing policies and programs that help them achieve the American Dream.” During his remarks, Cordray reiterated the bureau’s commitment to “addressing the concerns of the financially disempowered” through regulation of financial practices that are “unfair, deceptive, abusive, or discriminatory toward customers.” For more, read the full transcript of Richard Cordray’s remarks.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Sep 20, 2012

Inaugural meeting of CFPB’s new Consumer Advisory Board to take place next week in St. Louis
 

The Consumer Financial Protection Bureau (CFPB) announced yesterday that the inaugural meeting of its new Consumer Advisory Board will take place on Thursday, September 27, 2012, in St. Louis, Missouri, according to a press release from the bureau. The meeting, which is open to the public, will feature remarks from CFPB Director Richard Cordray as well as the chair and vice chair of the Consumer Advisory Board. For more, read the press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Sep 13, 2012

FDIC issues final rule on permissible investments for state and federal savings associations
 

The Office of the Comptroller of the Currency (OCC) has advised the chief executive officers of all national banks, federal savings associations, federal branches and agencies, department and division heads, and all examining personnel to review “the Federal Deposit Insurance Corporation’s (FDIC) final rule and guidance issued July 24, 2012, on investments in corporate debt securities,” according to a press release from the OCC. Federal savings associations must be in compliance with the FDIC’s final rule by January 1, 2013. The release also reminds these institutions that by January 1, 2013, they must be in compliance with the “OCC’s final rules and guidance regarding investments in other securities,” which was published on June 26, 2012. For more, read the OCC’s press release and read the FDIC’s final rule.


 
Posted by A. Sharett in  Dodd-Frank  Federal Regulatory   |   Permalink

 

Sep 11, 2012

CFPB to begin supervision of credit reporting agencies on September 30
 

On September 30, 2012, the Consumer Financial Protection Bureau (CFPB) will begin supervising credit bureaus and other consumer reporting companies to ensure that they are complying with requirements of federal consumer financial law, according to a press release from the bureau (see our September 6 blog post for more information). The Columbus Dispatch expounded on what this means for the three largest credit reporting companies — Experian, Equifax and TransUnion — as part of its ongoing coverage of consumer credit issues. In addition to making sure the companies “have employees who are trained to answer consumers’ questions about their credit reports,” examiners will be evaluating whether the agencies are providing accurate information about consumers, handling consumer disputes, and preventing fraud and identity theft, the article said. For more, read the full story.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Sep 06, 2012

CFPB releases exam procedures to ensure credit reporting companies are following the law
 

The Consumer Financial Protection Bureau (CFPB) recently announced exam procedures that will be used to ensure that credit bureaus and other consumer reporting companies are “complying with requirements of consumer financial law,” according to a press release from the bureau. Examiners will be assessing whether companies are using and providing accurate information, handling consumer disputes, making disclosures available, and preventing fraud and identity theft. For more, read the press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Sep 05, 2012

OCC names new director for enforcement and compliance
 

The Office of the Comptroller of the Currency (OCC) announced today that Ellen M. Warwick has been named as director for enforcement and compliance, according to a press release from the agency. Reporting to Deputy Chief Counsel Daniel P. Stipano, Warwick will “oversee the OCC’s Law Department Division that conducts investigations, recommends administrative actions, and litigates those enforcement actions on behalf of the agency,” the release said. For more, including a brief biography of Warwick, read the press release.


 
Posted by A. Sharett in  Federal Regulatory   |   Permalink

 

Aug 27, 2012

OCC releases list of rescinded documents
 

The Office of the Comptroller of the Currency (OCC) is rescinding documents in an effort to “develop an integrated supervisory policy platform for national banks and federal savings associations (FSAs),” according to a press release from the OCC. The office provided a list of such documents and indicated that “the reason each document is rescinded” falls into one of the following four categories:

  • Outdated – The document is no longer needed. Any attachments to the document are rescinded only as they relate to national banks and FSAs.
  • Replaced – The document and any attachments are superseded by subsequent guidance.
  • Incorporated – The document conveyed interagency guidance that was incorporated into a Comptroller’s Handbook booklet.
  • Transmittal – The document is a cover letter that merely conveyed another document. The rescission does not change the applicability of the conveyed document. To determine the applicability of the conveyed document, please refer to the original issuer of the document.

For more, read the press release and the Rescinded OCC Documents list.


 
Posted by A. Sharett in  Federal Regulatory   |   Permalink

 

Aug 23, 2012

OCC promotes bank financing projects that expand access to healthy food
 

In its latest Community Developments Investments electronic newsletter, the Office of the Comptroller of the Currency (OCC) described “how national banks and federal savings associations can and are helping to finance projects that bring fresh produce and healthy food choices to underserved low-income neighborhoods,” according to a press release from the OCC. Such projects use New Markets Tax Credits, the Community Development Financial Institutions Fund, and several other public-private partnerships available “through programs sponsored by the U.S. Departments of Treasury, Agriculture, and Health and Human Services,” the press release said. Participation in these programs may result in “positive consideration in a bank’s Community Reinvestment Act examination,” the release said. For more, read the press release and the latest edition of Community Developments Investments, titled “Bank Financing of Healthy-Food Initiatives.”


 
Posted by A. Sharett in  Federal Regulatory   |   Permalink

 

Aug 21, 2012

Conservative foundation examines CFPB’s finances
 

Using financial records from the Consumer Financial Protection Bureau (CFPB) obtained under the Freedom of Information Act, Judicial Watch — a “conservative foundation aimed at fighting government corruption” — rebuked the bureau’s allocation of $465,000 for sign language translation services, its use of $4,500 to enroll six employees in a banking law fundamentals class, and the salaries of several of its employees, CNNMoney reports. The CFPB contends that the sign language services are required for ADA compliance and that any unused funds will be returned at the end of the year; that the banking law fundamentals class is considered a qualifying program for the continuing education requirements of the bureau’s enforcement attorneys; and that the Dodd-Frank Act sets the director’s salary and requires the salaries and benefits for employees of the bureau to be “comparable to the Federal Reserve Board and other federal financial regulators,” the article said. For more, read the full story.


 
Posted by A. Haque in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory   |   Permalink

 

Aug 16, 2012

Regulatory agencies propose rule on appraisals for higher-risk mortgages
 

Six federal financial regulatory agencies — the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, the National Credit Union Administration and the Office of the Comptroller of the Currency — issued a proposed rule yesterday that would establish new appraisal requirements for “higher-risk mortgage loans,” according to a joint press release from the agencies.

Under the Dodd-Frank Act, mortgage loans are deemed higher-risk if “they are secured by a consumer's home and have interest rates above a certain threshold.” The proposed rule would require creditors to “use a licensed or certified appraiser” to prepare “a written report based on a physical inspection” of the property and to “disclose to applicants information about the purpose of the appraisal,” the release said. Additionally, to address fraudulent property flipping, creditors would be required to “obtain an additional appraisal at no cost to the consumer for a home-purchase higher-risk mortgage loan if the seller acquired the property for a lower price during the past six months,” the release said.

For more information, including the Federal Register notice as well as information on submitting comments about the proposal, read the press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory   |   Permalink

 

Aug 14, 2012

Ohio executive nominated as vice chair-elect for the Mortgage Bankers Association
 

William Cosgrove, president and CEO of the Strongsville-based Union National Mortgage Co., has been nominated as vice-chair elect of the Mortgage Bankers Association (MBA) for 2013, according to a news article from the MBA. Cosgrove has served as a member of the MBA’s legislative steering committee, its residential board of governors advisory committee and its board of directors, as well as chairman of MORPAC, the industry’s political action committee, and the Ohio Mortgage Bankers Association, the article said. MBA members will elect Cosgrove at the MBA’s 99th Annual Convention & Expo in October. For more, read the full story.


 
Posted by A. Sharett in  Federal Regulatory  Ohio Regulatory   |   Permalink

 

Aug 10, 2012

CFPB proposes rules to protect homeowners from mortgage servicer mistakes and surprises
 

The Consumer Financial Protection Bureau (CFPB) announced today two sets of proposed rules intended to enhance consumer protections with regard to the process for “evaluating consumers for alternatives to foreclosure” and to “lessen potential burdens on small servicers,” according to a press release from the bureau. The proposed rules are in response to complaints of mortgage servicers losing applications and paperwork, and making it exceptionally difficult to correct errors when they do arise, the release said.

The first set of proposed rules aims to help consumers avoid costly surprises by providing them with “clear and timely information about their mortgages,” the release said. Those rules include: clear monthly mortgage statements; warnings before interest rates adjust; options for avoiding costly “force-placed” insurance; and early information and options for avoiding foreclosure. The second set of rules would dictate “requirements for handling consumer accounts, correcting errors, and evaluating borrowers for options to avoid foreclosure,” the release said. Those rules include: payments promptly credited; maintenance of accurate and accessible documents and information; errors corrected quickly; direct and ongoing access to servicer personnel to assist delinquent borrowers; and evaluation of borrowers for options to avoid foreclosure.

For more information on the proposed rules, read the press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory   |   Permalink

 

Jul 31, 2012

CFPB’s semi-annual report showcases 2012 highlights
 

In its semi-annual report released this week, the Consumer Financial Protection Bureau (CFPB) showcased several of the activities in which it has been engaged since the start of 2012. According to a press release from the bureau, highlighted activities, accomplishments and achievements include:

  • Consumer Engagement: The CFPB regularly requests input from consumers to help guide its policies for regulation and enforcement. The bureau also “helps resolve consumer disputes with lenders by taking complaints through its website and by telephone, mail, fax, and by referral from other agencies.”
  • Financial Education: The CFPB has designed a number of tools and resources, including a public database of complaints the bureau has received about financial products, to help consumers “make responsible financial decisions.”
  • Regulation: The bureau has taken a number of steps to reform the mortgage market, including writing rules that help consumers make informed decisions, simplifying mortgage disclosure forms, and bringing “greater transparency and accountability to mortgage servicing.”
  • Research: The CFPB has been conducting “in-depth studies on consumer financial products, such as reverse mortgages and private student loans,” and has issued numerous Requests for Information to gather input from consumers and industry participants on a range of pertinent issues.
  • Supervision: The bureau has been expanding its supervisory authority beyond larger banks and credit unions to include certain nonbank entities that have “never before been federally supervised.” This includes residential mortgage companies, payday lenders and private education lenders.
  • Enforcement: A recent CFPB investigation led to enforcement action against Capital One, including $140 million that will be returned to customers who were “wronged by the company.”

For more, read our review of the semi-annual report.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory   |   Permalink

 

Jul 30, 2012

CFPB and U.S. Department of Education release report on the private student loan market
 

This month, the Consumer Financial Protection Bureau (CFPB) and the U.S. Department of Education released a report detailing the risky practices and loose underwriting in the private student loan market that has resulted in more borrowers and more debt, according to a press release from the bureau. Between 2001 and 2008, the private student loan market grew from less than $5 billion to over $20 billion as many lenders bypassed school financial aid offices and marketed loans directly to students, making money by “originating and then selling private student loans with less regard for borrowers’ creditworthiness,” the release said. The report features a list of recommendations for reforming the private student loan market. For more information, read the press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory   |   Permalink

 

Jul 19, 2012

CFPB announces first enforcement action, targets Capital One
 

This week, the Consumer Financial Protection Bureau (CFPB) announced its first public enforcement action, charging Capital One Bank with employing deceptive marketing tactics to promote add-on credit card services such as payment protection and credit monitoring, according to a press release from the bureau. The action requires Capital One to “refund approximately $140 million to two million customers and pay an additional $25 million penalty,” the release said. For more information, read the press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory   |   Permalink

 

Jul 07, 2012

OCC releases report providing risks facing national banks and thrifts
 

On July 5, 2012, the Office of the Comptroller of the Currency (OCC) released a 31 page report providing its semiannual risk perspective relating to the national banks and federal savings associations that it charters, regulates, and supervises.  According to the OCC, its National Risk Committee (NCR) "monitors the condition of the banking system and emerging threats to the system's safety and soundness." 

The report provides the OCC's three major risk concerns facing banks and thrifts: (1) the aftereffects of the housing crisis; (2) revenue challenges facing the banking industry in a down economy; and (3) the emerging trend that banks may take excessive risks to improve profit margins. 

A copy of the report may be found here and the OCC press release is here.


 
Posted by A. Sharett in  Federal Regulatory   |   Permalink

 

Jun 28, 2012

CFPB report: homeowners are confused about reverse mortgages
 

In a report released today, the Consumer Financial Protection Bureau (CFPB) found that few American consumers completely understand the reverse mortgage market, including the fact that property taxes and insurance must still be paid even with a reverse mortgage, according to a press release from the bureau. Additionally, the study found that consumers are getting reverse mortgages at younger ages and that 70 percent of borrowers take the proceeds as a lump sum payment, the release said. The bureau is seeking public input regarding reverse mortgages. For more, read the press release and the full report.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory   |   Permalink

 

Jun 22, 2012

Texas community bank leads lawsuit against the CFPB
 

The State National Bank of Big Spring, a community bank in Texas, filed a lawsuit alleging that certain provisions of the Dodd-Frank Act are unconstitutional, particularly the creation of the Consumer Financial Protection Bureau (CFPB), American Banker reports. As the first known community bank to file a lawsuit against the CFPB, State National executives say that the bureau can “essentially determine who gets a home loan…credit card…and a loan for college” with a board that has “unlimited regulatory power” and a director who is “not accountable to Congress, the President or the Courts,” the article said. For more, read the full story.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory   |   Permalink

 

Jun 20, 2012

CFPB to share consumer complaints with the public
 

In an effort to increase the efficiency and transparency of the credit card market, the Consumer Financial Protection Bureau (CFPB) will make available to the public the “individual-level consumer complaint data” it receives, according to a press release from the bureau. Although no personally-identifiable information will be available on the database, the bureau hopes to add similar data on other products, including “mortgages, student and other consumer loans, and other bank products (such as checking and savings accounts),” once the database progresses from its beta stage, the release said. 


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory   |   Permalink

 

Jun 19, 2012

CFPB Director Richard Cordray speaks at the American Constitution Society Conference
 

Consumer Financial Protection Bureau (CFPB) Director Richard Cordray spoke at the American Constitution Society Conference in Washington, D.C., last week about the function and goals of the CFPB. For more, read the full transcript of his prepared remarks.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Jun 18, 2012

CFPB conducting study of pre-dispute arbitration agreements
 

The Consumer Protection Financial Bureau (CFPB) issued a notice and request for information on the use of pre-dispute arbitration agreements for any future dispute between covered persons and consumers in connection with the offering or providing of consumer financial products or services. Comments regarding the scope, methods and data sources for conducting the study must be submitted on or before June 23, 2012. 


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory   |   Permalink