As part of its scrutiny of the use of mandatory pre‐dispute arbitration clauses in consumer financial contracts, the CFPB is proposing to conduct a nationwide telephone survey of 1,000 credit card holders. In Section 1028 of the Dodd‐Frank Wall Street Reform and Consumer Protection Act, Congress instructed the bureau to complete a study about arbitration. Section 1028 also authorizes the CFPB to “prohibit or impose conditions or limitations on the use of” such agreements based on the study results, the attorneys at the...

Eight lender industry trade groups have called upon the CFPB and the Department of Housing and Urban Development to provide written guidance that clearly spells out that complying with the bureau’s ability‐to repay/qualified mortgage rulemaking will not make lenders vulnerable to disparate impact liability under the Fair Housing Act or the Equal Credit Opportunity Act. In February of this year, HUD came out with its disparate impact rule under which liability for such claims can be established as per the Fair Housing Act. Back in...

The CFPB has published the first update to its exam procedures for the new mortgage regulations it issued in January 2013 having to do with appraisals, escrow accounts, and compensation and qualifications for loan originators. The exam procedures offer financial institutions and mortgage companies guidance on what the CFPB will be looking for as the rules become effective. “The CFPB recognizes that the easier we make it for financial institutions and mortgage companies to follow the new regulations, the better off consumers...

The CFPB recently put out two more small entity compliance guides, one for its loan originator rule and the other for its mortgage servicing rules that were finalized in January and kick in Jan. 10, 2014. The loan originator rule generally regulates how compensation is paid to a loan originator in most closed-end mortgage transactions. That includes prohibiting a loan originator’s compensation from being based on the terms of the transaction or a proxy for a transaction term. The LO rule also prohibits loan...

The American Bankers Association asked the CFPB for more detailed guidance on the “temporary qualified mortgage” for government-sponsored enterprise and agency mortgage loans. Earlier this year, the bureau proposed some amendments to its mortgage rules under the Real Estate Settlement and Procedures Act and the Truth in Lending Act. Among them are some proposed revised commentaries regarding the standards that a creditor must meet when relying upon a written guide or the automated underwriting system of one of the GSEs, the...

Last week, at the American Bankers Association’s 2013 Regulatory Compliance Conference in Chicago, the folks at the BuckleySandler law firm circulated a checklist of the following 10 questions lenders should ask themselves before the examiner from the CFPB comes knocking on the door: 1. Do your board and management set an appropriate “tone at the top” concerning the importance of compliance?2. Do your board and management receive periodic reports on the state of your compliance program and compliance issues? 3. Do you have...

Sometimes, industry “best practices” are as much what not to do as they are what in fact to do. That reality that is taking on a new degree of seriousness with the CFPB as the new sheriff in town when it comes to the Home Mortgage Disclosure Act and all of the new attention being paid to HMDA data. Maria Marquez, a manager for enterprise risk services at Deloitte & Touche LLP, told a group discussion during the American Bankers Association’s regulatory compliance conference that large banks are facing heightened...

With consumer complaints being taken to levels near seen before by a regulatory authority – the CFPB – many lenders are quite anxious about getting their hands on them, resolving them as quickly as possible, and then diminishing the frequency of their occurrence in the future. But there’s more to complaints than that, some top compliance representatives said during last week’s regulatory compliance conference sponsored by the American Bankers Association. If viewed the right way, they can be quite instructive and...

Bruce Schultz, head of mortgage operations for SpiritBank, offered attendees at the American Bankers Association’s regulatory compliance conference a useful acronym to remember a good strategy for navigating the rocks and shoals of the CFPB’s ability-to-repay/qualified mortgage rulemaking: CADI: Coordinate, Analyze, Decide, Implement. “First up is coordination,” Schultz told participants in a break-out session at the conference, held last week in Chicago. “Various people that you’re going to need to have input...

Compensation for directors at each of the 12 Federal Home Loan Banks increased in 2012, continuing a trend begun in 2011 where a director’s earnings “started to show a wide range across the FHLBanks for similar positions,” according to the Federal Housing Finance Agency.