The CFPB has formally authorized the collection of expanded Home Mortgage Disclosure Act information on race and ethnicity, as per the Equal Credit Opportunity Act and Regulation B, in 2017. “At any time from Jan. 1, 2017, through Dec. 31, 2017, a creditor may, at its option, permit applicants to self-identify using disaggregated ethnic and racial categories as instructed in appendix B to Regulation C, as amended by the 2015 HMDA final rule,” the bureau said in a Sept. 29, 2016, notice in the Federal Register. During this period, a lender permitting applicants to self-identify using these categories shall not be deemed to violate Regulation B Section 1002.5(b). Further, the lender shall also be deemed to be in compliance with ...

Two academics assert in a new white paper that the Dodd-Frank Act mortgage rules promulgated by the CFPB that were designed to protect consumers actually harmed middle-class borrowers and benefitted the wealthy. “Dodd-Frank aimed at reducing mortgage fees and abuses against vulnerable borrowers, but increased the costs of originating mortgages,” said University of Maryland professors Francesco D’Acunto and Alberto Rossi in their new paper. “We find it triggered a substantial redistribution of credit from middle-class households to wealthy households.” A back-of-the-envelope calculation that keeps constant the mortgage demand characteristics of 2010 shows financial institutions reduced their production of medium-sized loans by 15 percent in 2014, and increased making large loans by 21 percent, they said. D’Acunto and Rossi also found ...

CFPB Director Richard Cordray appeared before credit union representatives recently and touted the performance of their industry’s mortgage operations under the bureau’s mortgage rules. “Our first set of mortgage rules have been in place for over two and a half years, and we are seeing great progress,” Cordray told the National Association of Federal Credit Unions. “In 2014, the first year of our ability-to-repay rule on mortgage origination, owner-occupied home purchase mortgages increased by 4 percent, according to HMDA data, and growth was even stronger last year: home purchase mortgages increased by an estimated 13 percent to 14 percent.” In fact, as it turns out, the mortgage industry overall actually did slightly better than Cordray said. According to analysis of ...

Mortgage lending at community banks rose last year and is up over the last few years, according to a joint survey by the Federal Reserve and the Conference of State Bank Supervisors. However, that trend may not hold, thanks in part to a drop in demand and to a departure from the sector because of the CFPB’s mortgage rules. “Mortgage lending grew by more than 6 percent for community banks in our survey, which was somewhat higher than the comparable growth rate for all community banks over an overlapping period,” the agencies said. It was also higher than the comparable rate across the entire industry. Over a more-extended period, from December 2013 to March 2016, growth in 1-4 family residential ...

Last week, the CFPB brought a $9 million enforcement action against Savannah, GA-based TMX Finance, the parent company of TitleMax, accusing the company of luring consumers into costly loan renewals by presenting them with misleading information about the deals’ terms and costs. The CFPB said that employees of the auto title lender, as part of their sales pitch for the company’s 30-day loans, offered consumers a monthly option for making loan payments. They then offered consumers a “Voluntary Payback Guide” that showed how to repay the loan with smaller payments over a longer time period....

The CFPB filed a lawsuit in federal district court last month against Prime Marketing Holdings, a credit repair company based in Van Nuys, CA, for allegedly charging consumers a series of illegal advance fees as well as for misrepresenting the cost and effectiveness of its services. According to the bureau’s complaint, Prime Marketing Holdings lured consumers with misleading, unsubstantiated claims ...

SFIG Meets With CFPB Officials to Discuss TRID. Staff and key members of the Structured Finance Industry Group, a securitization trade group, recently met with regulators at the CFPB to discuss the bureau’s integrated disclosure rule known in as TRID and reviewed the trade group’s RMBS (residential mortgage-backed securities) 3.0 TRID Compliance Review Scope document.... CFPB Releases Updated Exam Procedures for the Military Lending Act. Late last week, the bureau issued the revised procedures its examiners will use in identifying consumer harm and risks related to the Military Lending Act rule, which was updated in July 2015...

“We hope that you will help us to push back on current efforts to gift the proprietary infrastructure of Fannie Mae and Freddie Mac to the big banks,” the clergymen write.

The CFPB last month sued five auto title lenders doing business in Arizona – Auto Cash Leasing, Interstate Lending, Oasis Title Loans, Phoenix Title Loans and Presto Auto Loans – for allegedly failing to disclose the annual percentage rate in online advertisements about title loans, in violation of the Truth in Lending Act. “For example, one lender advertised on its website a monthly interest rate but failed to include the legally required annual percentage rate for the loan,” the bureau said....

Last week, the CFPB brought a $3.6 million enforcement action against San Francisco-based online lender Flurish, doing business as LendUp, for allegedly failing to deliver the promised benefits of its products. The bureau said it found that the company did not give consumers the opportunity to build credit or provide access to cheaper loans, as it claimed to consumers it would....