“When someone tells you that the ATR rule is working, keep in mind it’s working because it actually stands on exemptions," said Rod Alba, senior regulatory counsel at the American Bankers Association.
The CFPB earlier this month ordered Guarantee Mortgage Corp., an independently owned mortgage-brokerage firm and mortgage banker headquartered in San Rafael, CA, to pay a civil money penalty of $228,000 for allegedly violating the agency’s loan originator compensation rule. According to the notice of charges, the nonbank – which is in the process of liquidating – paid its LOs, in part, based on the interest rate of the loans they were bringing in. The payments took place between April 2011 and August 2012, the bureau said. The consumer regulator said the “compensation was funded by payments Guarantee made to marketing services entities owned in part by the company’s branch managers and other Guarantee loan originators.” During the relevant period, Guarantee Mortgage paid ...
Nearly a score of industry trade groups sent a letter last week to the leadership of the House Financial Services Committee, urging them to pass legislation to provide a reasonable hold-harmless period for enforcement of the CFPB’s TILA-RESPA Integrated Disclosures (TRID) regulation for lenders trying to do their best to comply. “We appreciate that the bureau indicated it will be sensitive to the progress made by those entities that make good-faith efforts to comply,” the 19 groups said in a letter to Committee Chairman Jeb Hensarling, R-TX, and Ranking Member Maxine Waters, D-CA. “At the same time, the industry needs more certainty that their good-faith efforts to comply while still meeting consumers’ expectations do not expose lenders and settlement service ...
Potential borrowers have misperceptions about requirements for credit scores, downpayments and income, according to results from a survey by Wells Fargo and Ipsos Public Affairs.
With the effective date of the CFPB’s TILA/RESPA Integrated Disclosures rule just weeks away, lender representatives continue appealing to Congress for formal enforcement relief, while vendors are scrambling to finish their work products and deliver them to clients in time for testing. But TRID may not be as bad as everyone seems to fear. “In conversation with industry participants, the actual impact of these rules is a key debatable point, with consensus believing that the rules may have a temporary drag on origination volumes in the second half of 2015,” said analysts at FBR Capital. But it will not be as drastic as the impact the qualified-mortgage rule had on origination volumes in the second half of 2014, they said. ...
Democratic leadership in the Senate and the House have introduced the Community Lender Regulatory Relief and Consumer Protection Act of 2015 as an alternative to the GOP-sponsored regulatory relief bill approved by the Senate Banking, Housing and Urban Affairs Committee. Most of the provisions in the Democrat legislation were proposed as amendments to the Senate bill and rejected by the Republican majority. The Democrat bill would grant qualified-mortgage status for loans held in portfolio, but only for smaller financial institutions. Banks and credit unions with less than $2 billion in consolidated assets which originate fewer than 2,000 mortgages per year could make loans that exceed the 43 percent debt-to-income ratio under the QM standard and still receive safe harbor status ...
The CFPB last week promulgated its long-awaited final rule allowing it to supervise larger nonbank auto-finance companies for the first time. Currently, the bureau supervises auto financing at the largest banks and credit unions. The new rule extends that supervision to any nonbank auto-finance company that makes, acquires or refinances 10,000 or more loans or leases in a year. Under the rule, those companies will be considered “larger participants,” and the bureau may oversee their activity to ensure they are complying with federal consumer financial laws. Those laws include the Equal Credit Opportunity Act, the Truth in Lending Act, the Consumer Leasing Act, and the Dodd-Frank Act’s prohibition on unfair, deceptive or abusive acts or practices. The new rule is ...
The American Bankers Association is voicing concerns that the CFPB – not depository institutions – should pay the steep cost of gathering information as part of its expansive rulemaking on overdraft protection services. In a recent memo to state banking associations, the ABA noted that back in November, the CFPB ordered three financial services core processors – Fiserv, FIS Global, and Jack Henry – to provide significant amounts of information and anonymized data about the overdraft program services each processor provides to depository institutions and the configurations of those services.“Fiserv has informed its clients that it is ‘tracking [its] costs carefully with the likelihood that these will be passed through to [its] clients on [its] hosted bank platforms,’” the memo stated. The other ...
The banks with the highest percentage of overdraft fees to pretax operating income stand to lose over 8 percent of total pretax revenue if half of their overdraft fee revenue went away as a result of the rules the CFPB is set to release later this year, according to analysts at FBR Capital. The banks most exposed are TCF Financial, First Citizens BancShares, International Bancshares and Regions Financial, according to the FBR analysts. “Any CFPB rule on overdraft will likely mirror recent draft rules on prepaid cards that will require an assessment of the consumer’s ability to repay, have a repayment plan, and prohibit using deposits to repay the overdraft and associated fees,” the FBR team said. They noted that ...
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