The CFPB issued a report last week on how the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) has benefited consumers by effectively eliminating over-limit fees, sharply curtailing re-pricing practices, and reducing the average size of late fees. But the report also reveals the bureau’s intentions to scrutinize add-on products, rewards programs, and other “areas of concern.” Examples of the add-on products getting eyeballed by the bureau are those having to do with debt cancellation...

The CFPB held a forum in Washington, DC, recently on campus banking that featured some clues about likely forthcoming regulatory requirements for lenders that provide such services. One initial finding provided at the event was that arrangements between financial institutions and institutions of higher education on many student banking products are not well understood. Another was that “affinity products” – those co-branded by a lender and an educational institution – do not always have more competitive features...

Overall, internal controls for the CFPB Government Travel Card program should be strengthened to ensure program integrity, according to a new report by the Federal Reserve Office of Inspector General, which audits the bureau. “While controls over the GTC issuance process were designed and operating effectively, we found that controls are not designed or operating effectively to prevent and detect fraudulent or unauthorized use of GTCs, and [to] provide reasonable assurance that cards are properly monitored and closed...

The Financial Regulatory Reform Initiative of the Bipartisan Policy Center, a Washington, DC, think tank, issued a report late last month with dozens of recommendations by which the CFPB could improve transparency and accountability. “Perhaps the most significant trend the task force discovered was that when the bureau operated in a transparent, open and iterative manner, repeatedly seeking input from all stakeholders throughout a process, the results were generally positive,” the report said. “However, when the bureau made...

Drop in GSE Loan Limit Will Harm Special Category QMs, Industry Says. In a letter late last week to the Federal Housing Finance Agency, the regulator of Fannie Mae, Freddie Mac and the Federal Home Loan Banks, the Mortgage Bankers Association warned against any lowering of the conforming loan limit for the size of mortgages that Fannie and Freddie can purchase. “Any FHFA action to lower loan limits would ... undermine the special category of QMs created by the CFPB for loans that are eligible for Fannie Mae and Freddie Mac purchase,” the MBA...

Every component in the residential MBS market was down from the second quarter, and trending lower on a monthly basis, according to Inside MBS & ABS.

Starting in 2014, the FHLB will purchase conventional, conforming fixed-rate mortgages and FHA/VA products from its members, but some of the product will be funneled to Fannie Mae via the MPF Xtra program.

Certain members of the U.S. Senate want to see some type of analysis from FHFA on what impact lower loan limits will have on the housing and mortgage markets.

A steady decline in single-family agency MBS issuance led to a 13.8 percent decline in MBS and ABS production during the third quarter of 2013, according to a new Inside MBS & ABS analysis. A total of $388.53 billion of single-family MBS were issued during the third quarter, a 15.7 percent drop from the previous three-month period. It marked the lowest quarterly output for single-family MBS since the second quarter of last year, although year-to-date production was still up 9.0 percent from the first nine months of 2012. Every component in the residential MBS market was...[Includes three data pages]

Reforms seen in the new era of non-agency jumbo MBS issuance aren’t enough to prompt significant investor participation, according to John Gidman, president of the Association of Institutional Investors. At a hearing this week by the Senate Committee on Banking, Housing and Urban Affairs, Gidman and others called for a number of changes to the non-agency market. “The fundamental structural and process weaknesses for non-agency residential MBS securitization have not been fixed in the current private-label securities market,” Gidman said. “The issuance process itself is very opaque. Ratings continue to be shopped, issuers are still incentivized to water down representations and warranties, and continued variability in structures and documentation make the market more challenging for investors and raise the costs of funding.” He acknowledged...