The Consumer Financial Protection Bureau is about to begin its Consumer Risk Assessment process, one of the key components of the agencys Supervision and Examination Manual. This process evaluates CFPB-supervised entities based on the amount of risk their activities pose to consumers, identifies the various sources of risk, and assesses the quality of risk controls theyve put in place. This process is definitely something that those who have been concerned about the expansive powers of the bureau should ready themselves for, according to attorneys in the mortgage banking and consumer financial products practice at the law firm of K&L Gates.
The Consumer Financial Protection Bureau, in a conciliatory gesture to a wary industry, recently announced the existence of a formal Early Warning Notice process that will provide advance notice of potential enforcement actions to individuals and firms under investigation. The process is modeled on similar procedures that have been successful at other federal agencies, according to the CFPB. It starts with the bureaus Office of Enforcement explaining to individuals or firms that evidence gathered in a CFPB investigation indicates they have violated consumer financial protection laws. Recipients of an Early Warning Notice are then invited to submit a response in writing, within 14 days, including any relevant legal or policy arguments and facts. The Early Warning Notice process strikes a balance between the goal of fairness to those being investigated and our mission to protect consumers, said Raj Date, special advisor to the secretary of the Treasury for the CFPB. This process will help us fulfill our commitment to transparency in enforcing the law.
The Government Accountability Office recently confirmed the view widely held in the mortgage finance industry that federal regulators are not doing enough to analyze the cost and other effects of implementing the Dodd-Frank Act. Little is known about the actual impact of the final Dodd-Frank Act rules, given the short amount of time the rules have been in effect, the GAO said. The government watchdog noted that federal financial regulators are required to perform a variety of analyses, but the requirements vary and none of the regulators are...
A proposed Senate bill to steadily wind down Fannie Mae and Freddie Mac over the course of a decade appears to have some support at the Federal Housing Finance Agency, where the acting director is eager for Congress to move toward resolving the three-year-old conservatorships of the two government-sponsored enterprises. S. 1834, the Residential Mortgage Market Privatization and Standardization Act of 2011 would gradually reduce the two GSEs over 10 years through an unusual mechanism. Instead of guaranteeing the entire MBS trust as they...
Mortgage real estate investment trusts, along with investors, urged the Securities and Exchange Commission to maintain certain exemptions for mortgage REITs or risk further housing finance issues. REITs are seen as key in efforts to reduce the federal governments current support of mortgage finance. Mortgage-focused real estate investment trusts, such as Redwood, are well-suited to carry out this key mortgage banking business function, said Andrew Stone, general counsel for Redwood Trust. However, these companies need to continue to be able to rely on the [SEC] exclusion in order to efficiently and effectively carry out...
Three new housing professionals have joined the Department of Housing and Urban Developments Single Family, Risk Management and Multifamily offices. Sarah Garecke was named senior policy advisor in the Single Family Office and will help organize the new Office of Housing Counseling. She was previously with the Furman Center for Real Estate and Urban Policy at New York Universitys School of Law, where she launched the Institute for Affordable Housing Policy. She also co-authored the Directory of Affordable Housing Programs.