Last month, the CFPB made what it characterized as a significant update to its proposed policy to encourage trial disclosure programs, part of its Project Catalyst, an initiative to support innovators in creating consumer‐friendly financial products and services. After obtaining and sifting through feedback with various stakeholders, the bureau made a number of revisions and clarifications, including: Iterative testing. Companies can conduct iterative testing during disclosure trials, making small adjustments throughout the trial...

Politico reports that Richard Hackett, the bureau’s assistant director for installment and liquidity lending markets, is planning to leave the agency later this summer. Hackett works in the CFPB’s research, markets and regulations group, where he has been overseeing the agency’s work on installment loans, such as auto and student loans, as well as small dollar loans, including payday and auto title loans. “We know Rick well from his many years in private practice representing industry prior to his joining the CFPB and have great...

The CFPB and the Federal Deposit Insurance Corp. recently released “Money Smart for Older Adults,” an instructor‐led training module designed to help senior citizens and their caregivers protect themselves from financial exploitation and make informed financial decisions. “Older Americans lose an estimated $2.9 billion annually to financial exploitation, and it’s estimated that for each case that is reported, 43 others go unrecognized,” the bureau said. “With 50 million older people in this country, and 10,000 more reaching...

In response to a significant amount of public input – and private bellyaching – from the mortgage finance industry, the CFPB last week issued a number of proposed clarifications and revisions to several mortgage rulemakings finalized in January 2013, including changes to those having to do with loan originator compensation. The proposed changes would, among other things, clarify the definition of a loan originator. Under the CFPB’s January 2013 loan originator compensation final rule, persons classified as loan originators...

If an organization hasn’t already done so, it would be well advised to institute a complaint management process. During the recent American Bankers Association’s regulatory compliance conference, Mary Clouthier, senior audit manager with the compliance and operational risk audit team at Wells Fargo, rattled off nearly a dozen components that should make up an effective complaint management process. She started with, surprisingly for some, an institutional definition of “complaint.” A complaint could be defined as “an oral or written...

Rep. Spencer Bachus, R-AL, chairman of the House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law, recently introduced H.R. 2446, the “Responsible Consumer Financial Protection Regulations Act of 2013.” The legislation would replace the director of the CFPB with a five-person commission. The five members would be appointed by the president, with the approval of Congress, to serve staggered terms of five years each. The chair of the panel would serve as the CFPB’s principal executive officer...

Legislation Would Pre-Empt CFPB Oversight of CUs in a Few Regards. On the last work day of June, House Financial Services Committee Vice Chairman Gary Miller, R-CA, introduced a credit union regulatory relief bill that would pre-empt CFPB oversight of credit unions in a few potentially significant regards. Miller’s “Regulatory Relief for Credit Unions Act of 2013” would, among other things, authorize the National Credit Union Administration to step in “where appropriate” to modify a CFPB rule affecting credit unions. It also would...

The Consumer Financial Protection Bureau this weekend proposed limited revisions and clarifications to a number of its mortgage rules. The CFPB proposed allowing originations of certain high-cost balloon mortgages by small lenders to receive qualified mortgage status regardless of where the lenders operate. The CFPB also proposed slightly tweaking an exemption from escrow requirements on certain higher-priced mortgages originated by lenders in rural and underserved areas. To prevent ... [Includes two briefs]

An FHA proposal for new legislative authority to transfer servicing has raised concerns among industry participants, particularly in the Ginnie Mae market. Authorizing the FHA to shift mortgage-servicing rights from one servicer to another could have a ripple effect on Ginnie Mae servicing rights and also adversely impact state mortgage servicing and origination licenses, some say. The bottom line is that Congress should consider FHA’s request for new statutory authority with great care, said Larry Platt, a compliance attorney and a partner at the Washington law firm K&L Gates. “We would hope that ...

The FHA’s tiered system for assessing servicers’ use of loss mitigation tools should serve more as a red flag for increased supervision rather than as a basis for terminating servicing rights, said the Mortgage Bankers Association. Commenting on the FHA’s proposed enhancements to its servicer scorecard, the MBA acknowledged the agency’s responsibility to monitor and hold servicers accountable for poor performance. But while tiered ranking is a good enforcement tool, it can be misapplied, the group indicated. Any ranking system is a good first ...