Last week, the CFPB ordered a Missouri mortgage lender, Fidelity Mortgage Corp., and its former owner and current president, Mark Figert, to pay $81,076 to settle allegations it funneled “illegal kickbacks” to a bank in exchange for loan referrals. The bureau charged that Fidelity, a St. Louis-based non-depository mortgage lender, entered into an agreement with an unnamed bank in which the bank referred potential borrowers to Fidelity in exchange for kickbacks. The kickbacks were disguised as inflated lease payments...

The U.S. District Court for the Central District of California has rejected a legal challenge to the constitutionality of the CFPB that was brought by debt relief firm Morgan Drexen, which became the subject of a bureau enforcement action after the filing. Back in July, Morgan Drexen sued the bureau in federal district court in Washington, DC, challenging the constitutionality of the agency, as well as accusing it of “data mining” and attempting to obtain sensitive bankruptcy information protected by attorney-client privilege...

Consumer complaints to the CFPB about their mortgages again dropped off during the fourth quarter of the calendar, but were still up 25.2 percent for the 12-month period ending Dec. 31, 2013, versus one year prior, a new analysis by Inside the CFPB shows. One pattern that has emerged over the last nine quarters is that mortgage gripes have been comparatively low during the fourth quarter, only to surge during the next three quarters, and then fall off again in the next three-month period. During the most recent cycle, that has translated into a 33.3...

The CFPB’s emphasis on consumer complaints has injected a whole new compliance dynamic for lenders of all types and sizes. And in order to successfully manage what is likely the most problematic complaint – confusion – lenders are going to need a more sophisticated triage process. “In an environment in which regulators cite customer confusion as a primary rationale for actions on everything from advertising and sales practices to rewards programs to arbitration clauses, establishing a high threshold for a matter to qualify as a...

With more than 850,000 private student loans in default, and even more in delinquency, loan lenders and servicers have been made keenly aware that regulators think they need to do more to help struggling borrowers refinance their student loan debt. Earlier this month, CFPB Director Richard Cordray, Education Secretary Arne Duncan, and Acting Deputy Treasury Secretary Mary Miller convened a meeting with the nation’s largest private student lenders and servicers to review the situation and to drum up solutions. One of the big problems, according...

Smaller residential mortgage servicers are going to be challenged by the increased costs of new servicing requirements from the CFPB as they seek to opportunistically grow through strategic acquisitions, according to analysts at Fitch Ratings. “Many U.S. residential mortgage servicers have been working diligently to meet the new servicing requirements,” the Fitch crew said in a recent analysis. “Many large servicers have already made significant progress towards meeting the Jan. 10, 2014, deadline, in particular those servicers...

The Office of the Inspector General of the Federal Reserve Board plans to complete several audits and evaluations of the CFPB, including one on the CFPB’s own compliance with the Dodd-Frank Act, which requires the bureau to describe the impact of any proposed rule on the cost of credit for small entities. Also on tap is an evaluation of the CFPB’s supervision program for large banks and nonbanks, and a third on the bureau’s hiring process. Also, the OIG will join its counterparts at the Federal Deposit Insurance Corp., the National Credit Union...

The CFPB has released updates to its mortgage origination examination procedures and its mortgage servicing exam procedures. “These updates harmonize existing procedures for handling mortgage origination and mortgage servicing examinations with the revised interagency procedures that address the new mortgage regulations issued in January 2013, which have now taken effect,” the bureau said. The exam procedures for both mortgage origination and mortgage servicing now cover final rules issued by CFPB through November 2013. These...

Warner Introduces Prepaid Card Fee Legislation. Sen. Mark Warner, D‐VA, recently introduced legislation that would require new disclosures of prepaid card fees. Under Warner’s bill, the CFPB would be required to standardize the required disclosures. Under S. 1903, the Prepaid Card Disclosure Act of 2014, the bureau would be required to issue rules to establish the format for the fee disclosures. Also, the CFPB would have the authority to require an electronic link to the disclosures in the form of a quick response code, barcode or similar...

Industry analysts predict that the New York ruling will limit rep-and-warrant claims on vintage non-agency MBS as well as future claims on recently issued jumbo MBS.