Last week, at their national convention in Cleveland, the Republicans issued their 2016 campaign platform, which featured some particularly sharp rhetoric towards the CFPB. The GOP called for either getting rid of the agency in the broader context of repealing and replacing the Dodd-Frank Act, or at least altering the bureau’s leadership structure and its funding mechanism. If they can’t abolish the CFPB outright, the Republicans want to replace the current single directorship with a bipartisan commission and subject the bureau to the congressional appropriations process in lieu of its funding from the Federal Reserve. “The worst of Dodd-Frank is the CFPB, deliberately designed to be a rogue agency,” the platform stated.

This week, the Republicans adopted their official platform and called the GSE conservatorship a “corrupt” way of doing business. The GOP said the Great Recession devastated the housing market and caused taxpayers to pay billions of dollars to rescue Fannie Mae and Freddie Mac. They blame Democrats in Congress and the Obama administration for preventing efforts to reform the GSEs since they’ve been in conservatorship. “Their corrupt business model lets shareholders and executives reap huge profits while the taxpayers cover all loses,” the platform said. While vague in taking a stance on what should be done with Fannie and Freddie, the platform simply stated that the utility of both agencies should be “reconsidered.”

Two senators are questioning the effectiveness of the Federal Housing Finance Agency’s watchdog, the Office of the Inspector General, in light of staff cuts in the Office of Audits over the past two years and money spent to hire outside attorneys and employees. Sens. Charles Grassley, R-IA, and Ron Johnson, R-WI, penned a letter late last month to the Council of Inspectors General on Integrity and Efficiency requesting an outside review of the FHFA OIG. Prior to the letter to the CIGIE, which monitors the integrity of the IG office, Grassley has sent several letters to FHFA OIG’s Laura Wertheimer since last October regarding organizational changes made under her leadership.

A mortgage industry group wants to turn the TRID disclosure tables back on the regulators and reveal to homebuyers all the fees – including those imposed by the government – they have to pay for their home purchases, and not just those generated by the industry. The mortgage broker organization known as NAMB – The Association of Mortgage Professionals wants the CFPB and the Federal Housing Finance Agency to further clarify the TILA/RESPA Integrated Disclosure Rule by including a new line item that clearly states the “hidden” guarantee-fees and loan- level price adjustments from Fannie Mae and Freddie Mac. [However, it should be noted that the FHFA has no authorities under the Truth in Lending Act nor the Real Estate Settlement Procedures Act.] ...

The CFPB and the Department of Justice late last month announced a $10.6 million enforcement action against BancorpSouth, a regional bank headquartered in Tupelo, MS, alleging the lender engaged in discriminatory mortgage lending practices that harmed African-Americans and other minorities. Of particular note, the bureau said, “This is the CFPB’s first use of testing, sometimes referred to as ‘mystery shopping,’ to support an allegation of discrimination.” The government’s complaint accuses BancorpSouth of illegally redlining in Memphis, TN, denying certain African-Americans mortgage loans more often than similarly situated non-Hispanic white applicants, and charging African-American customers more for certain mortgage loans than non-Hispanic white borrowers with similar loan qualifications. The agencies also alleged the lender implemented an explicitly discriminatory loan denial policy...

The redlining risk that lenders face these days is morphing to include not just a consideration of a bank’s internal behavior but also a comparison of the bank’s performance against its peers – a far more nebulous and uncertain standard of accountability. During a presentation at the American Bankers Association’s regulatory compliance conference last month in San Diego, Carl Pry, a managing director at Treliant Risk Advisors, told attendees, “Regulators are defining redlining risk a little bit differently these days. Traditionally, redlining involved looking at your own bank’s map: you plot out where your applications are, where the loans are, where the denials are – and you stand back and take a look and see, perhaps, that there are a lot of ...

Late last week, the Structured Finance Industry Group, a securitization trade association, put out its long-awaited compliance review documentation related to the CFPB’s integrated disclosure rule under the Truth in Lending Act and the Real Estate Settlement Procedures Act. SFIG said its RMBS 3.0 TRID Compliance Review Scope documentation was put together by representatives of third-party review firms across the industry and its own RMBS 3.0 Due Diligence, Data and Disclosure Working Group.The material addresses TRID compliance issues on non-agency mortgages uncovered during reviews by due diligence providers. Under the standards, loans that would have received grades of C or D due to TRID exceptions can sometimes receive B grades if errors are corrected. The document was created to ...

There was a significant increase last year in the number of coordinated examinations of non-bank financial services companies between the CFPB and state banking regulators. The number of such exams rose from nine in 2014 to 16 in 2015, the State Coordinating Committee of the Conference of State Bank Supervisors reported recently in its annual report. Examinations that are scheduled between the SCC and the CFPB are performed simultaneously between state regulators and the CFPB. The examinations involve coordinated planning, shared resources, concurrent onsite visits, and sharing of confidential and non-confidential supervisory information, including findings and reports of exam. The SCC also indicated there was “an expansion into new industry types as the CFPB established additional supervision authority by rule.” ...

Hensarling Slams CFPB, Vows Big Changes to Dodd-Frank, the Bureau. During a speech last week at the National Center for Policy Analysis, Rep. Jeb Hensarling, R-TX, chairman of the House Financial Services Committee, pledged to push a package of pro-growth, pro-consumer reforms as an alternative to the Dodd-Frank Act, including clipping the wings of the CFPB. “At almost every opportunity, the bureau abuses and exceeds its statutory authority, which is already immense,” said the congressman. “The bureau operates with such secrecy, unaccountability, and bureaucratic tyranny it would make a Soviet Commissar blush.”As the committee moves forward with its plans for financial reform, Hensarling promised the Republicans will have ...

A recent study by the U.S. Governmental Accountability Office recommended that Congress consider granting the Federal Housing Finance Agency more authority to examine third parties, such as nonbanks, that do business with Fannie Mae and Freddie Mac.Although nonbank servicers are subject to oversight by federal and state regulators and monitoring by Fannie and Freddie, the GAO wants to see greater regulation. It said in light of recent nonbank growth, the FHFA’s indirect oversight of third parties that do business with the GSEs is not enough.“FHFA lacks statutory authority to examine these third parties to identify and address deficiencies that could affect the enterprises.