Last week, the CFPB put out a call for evidence to make sure it is “fulfilling its proper and appropriate functions to best protect consumers.” The agency said it will soon publish in the Federal Register a series of Requests for Information (RFIs) seeking comment on enforcement, supervision, rulemaking, market monitoring, and education activities. The bureau’s expectation is that the RFIs will provide an opportunity for the public to submit feedback and suggest ways to improve outcomes for both consumers and covered entities. “In this New Year, and under new leadership, it is natural for the bureau to critically examine its policies and practices to ensure they align with the bureau’s statutory mandate,” said Acting Director Mick Mulvaney. “Moving forward, ...

The CFPB has decided to abandon its pursuit of a group of payday lenders it had accused of misleading consumers about the true extent of the costs associated with its loans, which purportedly carried interest rates as high as 950 percent a year. The agency gave no explanation about its decision to reverse course. An interesting twist is that payday lenders are generally regulated at the state level, and since the lenders in this case happen to be associated with a Native American tribe, they can argue that state laws do not apply to them. Payday Lending Rule Kaput? Also last week, the CFPB indicated it might just deep-six its controversial payday lending rule. “Jan. 16, 2018, is the effective ...

Some top compliance attorneys are optimistic that the CFPB under Acting Director Mick Mulvaney, or another President Trump appointee, will provide greater regulatory relief and clarity for lenders, and an easing of enforcement activity. Included in that mix could well be a return to the more traditional interpretation the Department of Housing and Urban Development had for the Real Estate Settlement Procedures Act. Gerald Sachs, formerly senior counsel for policy and strategy at the bureau and now a partner with the Venable law firm in Washington, DC, told Inside the CFPB recently he anticipates that “mortgage rules would be amended or revised to lessen the regulatory burden, clarify industry concerns or issues, and allow more access to credit.” In addition, ...

It’s likely that mortgage lenders and servicers will get some degree of consideration and accommodation from the CFPB during the Trump administration, thanks to some reviews the bureau is required to make of its major rulemaking as per the Dodd-Frank Act. “The Dodd-Frank Act requires the CFPB to look back and conduct an assessment of each significant rule not later than five years after its effective date,” said former CFPB official Benjamin Olson, now a partner in the Washington, DC, office of the Buckley Sandler law firm, during a webinar last week sponsored by Inside Mortgage Finance. The purpose of this assessment is to look at the effectiveness of the rule in meeting its purposes and objectives under the statute ...

The GSEs have been purchasing more adjustable-rate mortgages in the past year and the Federal Housing Finance Agency Office of Inspector General said that warrants monitoring. Since November 2016, the GSEs’ purchase of ARMs has grown. The numbers are far lower than the volume of ARMs purchased during the housing bubble in the early 2000’s, a new IG white paper noted. The ARM share of single-family mortgage purchases by the GSEs dropped from around 20 percent in 2006 to 12 percent in 2007. And by 2009, ARM purchases by Fannie and Freddie tumbled to just 2.3 percent of their single-family business. From 2007 to 2010, the GSEs tightened restrictions on their purchase of ARMs, including those with nontraditional features and layered risk.

The game-changing ability-to-repay mortgage lending rule from the Consumer Financial Protec-tion Bureau took effect four years ago this month. At that time, regulators said there would be plenty of mortgage lending outside the parameters of the qualified-mortgage box. So far, however, that ex-pectation has yet to be realized.

CFPB Acting Director Mick Mulvaney has less than 200 calendar days left to occupy the director’s chair, so industry officials have been wondering what they can expect from the bureau as long as he’s in charge.According to some top compliance attorneys, the CFPB will be far less aggressive towards the industry, but hardly provide the corporate love-fest opponents of the AD fear. Laurence Platt, a partner with the Mayer Brown law firm in Washington, DC, told Inside the CFPB, “Like former Sen. George Romney’s famous prediction about the U.S. getting out of Vietnam, I expect a ‘phased withdrawal.’” The CFPB “will continue to supervise ‘covered persons,’ but, whether it is supervision or enforcement, I expect the CFPB’s use of ...

It’s possible that mortgage lenders and servicers will see the CFPB during the tenure of Acting Director Mick Mulvaney use the five-year “look back” the bureau is required to perform to make significant changes to a pair of major rulemakings: the Truth in Lending Act/Real Estate Settlement Procedures Act integrated disclosure rule (TRID) and the ability-to-repay rule. Donald Lampe, a partner with Morrison & Foerster law firm in Washington, DC, explained, “In Dodd-Frank, there’s a five-year required regulatory review, and there are two of those regulatory reviews that are still under advisement: one for TRID and the other for the ATR/qualified mortgage rule. “If I’m thinking about 2018, I feel pretty confident to say that those processes bear careful attention ...

While most of the universe of CFPB watchers were focusing on the legal struggle between Acting Director Mick Mulvaney and Deputy Director Leandra English or the possibility that President Trump might name another fierce critic of the CFPB, such as Rep. Jeb Hensarling, R-TX, to head up the agency, it looks like a stealth candidate has entered the game. National Credit Union Administration Chairman Mark McWatters is that person. McWatters’ name has suddenly been floated by various industry observers and insiders as being on the short list of possible nominees for the consumer bureau. Nominated by President Obama to both the NCUA board and then to head the Export-Import Bank (the latter nomination being blocked by Sen. Richard Shelby, R-AL) ...

As 2017 came to an end, the CFPB and other federal prudential regulators informed the industry they would implement a “good faith efforts” enforcement philosophy toward lender compliance with the new requirements under the Home Mortgage Disclosure Act that took effect Jan. 1. The CFPB in 2015 put out its rule under which financial institutions were required to collect and report new mortgage data points for loans made after Jan. 1, 2018. This past August, the bureau released a final rule that clarified some reporting requirements, increased the threshold for collecting and reporting data on home equity lines of credit for two years, and made various technical corrections. “The bureau recognizes the significant systems and operational challenges needed to meet ...