It’s not exactly Mutiny on the Bounty, but 378 employees of the CFPB voted last week in favor of joining the National Treasury Employees Union, with 86 against, putting the NTEU in the position of representing more than 800 of the CFPB’s approximately 1,200 employees, according to Politico. “Why would employees at CFPB – an agency with liberal bona fides, generous compensation and top-notch benefits – want to form a union,” Politico asked. “The push to organize was driven in large part by news that many employees in...
In its yearly letter to the CFPB, the Federal Trade Commission affirmed that it is “committed to continuing its vigorous enforcement” of regulations under the Equal Credit Opportunity Act, the Electronic Fund Transfer Acts, the Truth in Lending Act and the Consumer Leasing Act, and “in intends to do the same with other rules the CFPB issues.” The Dodd-Frank Wall Street Reform and Consumer Protection Act gave the FTC the authority to enforce any bureau rules that apply to entities within the FTC’s jurisdiction, which...
The broad and still uncertain powers granted to the CFPB by the Dodd-Frank Wall Street Reform and Consumer Protection Act are the biggest threat to community banks, according to an American Enterprise Institute white paper authored by Tanya Marsh and Joseph Norman.“The CFPB has been granted broad powers to ‘regulate the offering and provision of consumer financial products or services,’” the authors said. “The limit to those powers, and how those powers may be implemented in regards to community banks, remain uncertain...
The National Association of Federal Credit Unions is apprehensive about the unintended consequences of the Federal Housing Finance Agency’s decision to limit Fannie Mae and Freddie Mac future mortgage purchases to ‘qualified mortgages’ as defined by the final rule issued earlier this year by the CFPB. Earlier this month, the FHFA directed the two government-sponsored enterprises to limit their future mortgage acquisitions to loans that meet the requirements for a qualified mortgage, including those that meet the special or...
Legislation Would Revise QM Points-and-Fees Calculation Sens. Joe Manchin, D-WV, and Mike Johanns, R-NE, introduced legislation last week that would amend the way ‘points and fees’ are calculated to determine if a loan meets the ‘qualified mortgage’ definition under the CFPB’s ability-to-repay rule, issued earlier this year. Under the rule, a QM cannot have points and fees exceeding three percent of the loan amount. S. 949 is a companion to H.R. 1077, the Consumer Mortgage Choice Act, which has steadily picked up support since...
While non-agency MBS participants largely oppose a credit rating assignment system proposed by Sen. Al Franken, D-MN, some of the main players in the market endorse a model based on ratings rotation. At a roundtable hosted by the Securities and Exchange Commission this week, Martin Hughes, CEO of Redwood Trust, said issuer-paid rating conflicts could be reduced by requiring non-agency MBS issuers to alternate rating services so that one firm didn’t rate more than two consecutive deals from the issuer. He noted that Redwood has established a self-imposed rotation between Moody’s Investors Service and Standard & Poor’s on its non-agency MBS issuance. “The requirement to frequently alternate among the nationally recognized...
The Federal Reserve’s MBS purchase party isn’t over – yet – but it looks like the nation’s central bank is getting nearer to the last call. Late last week, the Wall Street Journal reported that officials at the nation’s central bank have developed a strategy for dialing back their unprecedented level of support of the housing market. The plan involves reducing the amount of bonds the Fed buys “in careful and potentially halting steps,” the WSJ said, with the purchases varying on the read officials have of the job market and of inflation. And although the timing of the Fed’s wind-down is...
Exactly one year after it filed for bankruptcy, Residential Capital announced this week it has entered into a “comprehensive plan support agreement” with its parent, Ally Financial, and ResCap’s creditors, who say they are owed some $25 billion in mortgage liabilities. The plan gets Ally out from under the threat of billions of dollars in lawsuits by settling all existing and potential claims between Ally and ResCap and all potential claims held by third parties related to ResCap that could be brought against Ally and subsidiaries that are not Chapter 11 debtors. The settlement, which is subject to approval by a federal bankruptcy court in Manhattan, fully releases...
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