The CFPB recently issued some final changes to its mortgage rules to help foster responsible lending by small creditors, especially those operating in rural and underserved areas. The new rule, which was proposed in January, aims to increase the number of community banks and credit unions that are able to offer certain types of mortgages in rural and underserved areas. It also gives small creditors time to adjust their business practices to comply with the rules. “The financial crisis was not caused by community banks and credit unions, and our mortgage rules reflect the fact that small institutions play a vital role in many communities,” said CFPB Director Richard Cordray. “These changes will help consumers in rural or underserved areas ...
The CFPB, the Department of Education, and the Department of the Treasury late last week issued a joint statement of principles “to improve student loan servicing practices, promote borrower success and minimize defaults.” The agencies said they are committed to working together so that all student loan borrowers have access to the information they need to repay their loans responsibly and avoid default, and to protections so that they will be treated fairly even if they are struggling to repay their loans.They also want student loan borrowers to have access to certain mechanisms so that “errors are resolved expeditiously, and assurances that student loan servicers, both in the marketplace and through federally-contracted companies, are held accountable for their conduct.” ...
Industry Anxiety at a Fever Pitch? Or Just Good Public Relations? The new TRID rule, which became active on Saturday, may only be the tip of the regulatory iceberg, according to sister publication IMFnews. Several lenders interviewed readily admitted that the new TILA/RESPA disclosures are definitely easier to understand. That’s the good news. “The bad news is that they feel the CFPB continues to miss their central message: that incorporating technology changes to their systems to make TRID happen on time has been an operational nightmare, and they feel that Director Richard Cordray has been hardly sympathetic to their plight,” the publication reported late last week. Although the TRID headache may be eased (for now) thanks to a letter that ...
Was Industry “Foaming at Mouth” Over ATR Liability Much Ado About Nothing? “All this foaming at the mouth about legal liability [on qualified mortgage standards] did not pan out. It was an over-reaction,” CFPB Director Richard Cordray said last week. During a hearing held by the House Financial Services Committee, the director noted that he recently met with the CEOs of the top 40 mortgage companies as part of an event hosted by the Mortgage Bankers Association. Cordray said the CEOs revealed that none of these lenders have faced lawsuits alleging violations of standards for qualified mortgages. One industry veteran later said that Cordray took “the disingenuous position that since no lawsuits have been filed, all the concerns about legal ...
Consumer Complaints Tick Slightly Upward From Year-Ago Levels. A small 3.9 percent drop in overall consumer complaints to the CFPB during the third quarter helped keep a lid on rising complaints at the nine-month mark versus a year ago, according to an analysis by Inside the CFPB. (See chart on previous page.) The data show a modest 4.3 percent uptick in consumer criticisms at the end of September 2015 compared with the same nine-month period in 2014. The biggest drops were seen in the payday lending space (down 18.7 percent quarter to quarter and 7.1 percent year over year) and in the residential mortgage space (down 10.9 percent and 7.5 percent, respectively)....
OIG Identifies Major Management Challenges Confronting the CFPB. The CFPB’s Office of Inspector General identified a handful of major management challenges before the bureau which, if left unaddressed, will probably hamper the CFPB’s accomplishment of its strategic objectives. The first challenge for the bureau is ensuring an effective information security program, the OIG said in a new report. Information security presents a challenge to the CFPB “due to the advanced persistent threat to the government’s information technology infrastructure from outside governments and organized groups,” said the OIG. Another major hurdle is building and sustaining a high-performing and diverse workforce. This is an issue for the bureau “due to competition from other employers for the highly qualified staff with specialized skill ...
Sources told IMFnews that one large loan origination system (LOS) vendor was struggling to make programming deadlines ahead of the TRID rule, a situation that had caught the attention of the CFPB.
Issuance of ABS backed by leases on small/mid-ticket equipment has rebounded since the financial crisis to levels last seen 15 years ago. However, industry participants suggest that loan-level disclosure requirements and mandatory risk-retention could limit activity in the sector going forward. At the recent ABS East conference produced by Information Management Network in Miami, Du Trieu, a senior director at Fitch Ratings, said issuance is increasing due to the improving economy and investor demand. “The collateral is business critical and income producing,” he added. Nearly $12.0 billion in small/mid-ticket ABS was issued...
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