A recent report by a government watchdog highlighted the actions taken by Equifax and the CFPB during the year since the public learned about the credit reporting agency’s serious data breach. The U.S. Government Accountability Office released a report on the Equifax data breach, describing in detail how hackers exploited vulnerabilities in the Equifax system to gain access to sensitive personal information for at least 145.5 million individuals. According to ...

The CFPB should drop the current debt-to-income ratio cap and the so-called GSE patch from the qualified-mortgage definition, the Urban Institute recommends. The CFPB is required by statute to review the ability-to-repay rule, which includes the QM definition, and issue a final report on its findings by Jan. 10, 2019. One of the most important elements of the review could be the fate of the “GSE patch,” which is set to expire in January 2021, or on the day ...

A community bank in Texas and two DC-based nonprofit groups recently filed a petition with the U.S. Supreme Court challenging the constitutionality of the CFPB’s sole-director structure. The State National Bank of Big Spring, 60 Plus Association, and Competitive Enterprise Institution originally filed a lawsuit in 2012 in the U.S. District Court for the District of Columbia, alleging the CFPB’s structure violated the U.S. Constitution’s separation of powers. The district ...

A court panel recently declined to enforce a civil investigative demand issued by the CFPB because the language is too broad and generic. Attorneys said it was the second strike against the bureau for aggressive interpretation of its authority after the D.C. circuit ruled a CID invalid last year. A panel of the U.S. Court of Appeals for the Fifth Circuit held that a CID issued to Source for Public Data – a company that provides public records through an internet-based ...

Almost 10 months into Acting Director Mick Mulvaney’s tenure at the CFPB, the bureau filed its first new lawsuit. The CFPB last week filed charges against Future Income Payments (FIP), Irvine, CA, in federal district court in the Central District of California. The bureau alleged that FIP’s pension-advance products were loans with interest rates “that are substantially higher than credit card interest rates,” according to the complaint, which also names the company's owner ...

CFPB Updates Model Disclosures Under Fair Credit Reporting Act . The CFPB last week issued an interim final rule updating two model disclosures to reflect changes made to the FCRA by the recent Dodd-Frank reform act.The Economic Growth, Regulatory Relief, and Consumer Protection Act, which became law in May, requires nationwide consumer reporting agencies to provide “national security freezes” free of charge to consumers. The [Includes three briefs] ...

James Lockhart, the Federal Housing Finance Agency director who headed the regulator when the government takeover of Fannie Mae and Freddie Mac occurred in September 2008, told Inside The GSEs he never dreamed the conservatorships would last a decade. “We thought it might go a couple of years and Congress would act,” he said. Lockhart added philosophically: “Perhaps, the conservatorships worked too well.” Lockhart, who eventually became a vice chairman of WL Ross & Co., and played a key role in that firm’s mortgage-related investments, said he’s happy that the two are now steadily profitable. But he...

The bulk of the House Financial Services Committee hearing last week focused on the lack of reform and how the GSEs’ growing role in the housing market makes them more of a liability to taxpayers today than they were before the housing crisis. The hearing was held on September 6, the 10-year anniversary of the conservatorship that has lasted longer than anyone expected. Retiring chairman of the committee Rep. Jeb Hensarling, R-TX, called the date the “not so happy anniversary” and said while reform is critical, it’s proven illusive.Hensarling introduced a bipartisan bill during the hearing, the Bipartisan Housing Finance Reform Act of 2018, but implied it likely won’t go anywhere in this Congress.

Freddie Mac is developing an exchange path in preparation for the single security initiative that will combine the Freddie and Fannie Mae markets into one Uniform Mortgage-Backed Security. To make that transition easier for the June 2019 single security launch, Freddie teamed up with Tradeweb to create a simple, standardized transaction entry point to submit valid legacy MBS for exchange. The platform will also accept float compensation and choose a settlement date. Investors will be able to request exchanges through their order management systems integration with Tradeweb or enter them directly into Tradeweb. The platform will provide a direct-to-Freddie path for...

More than two dozen trade groups signed an open letter to the administration and Congress urging them to preserve what works in the current housing-finance system and get more private capital back into the market. “There is a pressing need to ensure that the existing progress is cemented rather than cast aside,” said the groups, which include the Mortgage Bankers Association, the Community Home Lenders Association, the Community Mortgage Lenders of America, Independent Bankers of America and the Credit Union National Association. The groups want to make sure that any effort to change the role the GSEs play doesn’t result in market disruptions that reduce access to credit in the single-family and multifamily space.