Last week, the CFPB ordered GE Capital Retail Bank and its subsidiary, CareCredit, to refund up to $34.1 million to potentially more than one million consumers who the bureau said were victims of deceptive credit card enrollment tactics. At doctors’ and dentists’ offices around the country, consumers were signed up for CareCredit credit cards they thought were interest free, but were actually accruing interest that kicked in if the full balance was not paid at the end of a promotional period, according to the CFPB...
Last week, the CFPB released preliminary research on the use of arbitration clauses in connection with consumer financial products and services, finding that roughly nine out of 10 of such clauses in credit card and checking account agreements allow banks to prevent consumers from participating in class actions. The bureau said its research also shows that while tens of millions of consumers are subject to arbitration clauses in the markets the CFPB studied, on average, consumers filed 300 disputes in these markets each year...
On Monday, as Inside the CFPB was going to press, the CFPB took its first action against an online loan servicer, CashCall Inc., its owner, its subsidiary, and its affiliate, for collecting money the bureau said consumers did not owe. The CFPB alleges that the defendants engaged in unfair, deceptive and abusive practices, including illegally debiting consumer checking accounts for loans that were void. California-based CashCall, its subsidiary, WS Funding LLC, and its affiliate, Delbert Services Corp., a Nevada collection...
The Mortgage Bankers Association has put together some guidance, drawn from conversations with CFPB staff, on how to exclude affiliate fees in the points-and-fees calculation for qualified mortgages under the agency’s ability-to-repay rule, which takes effect in just a few weeks. The bureau’s ATR and Home Ownership and Equity Protection Act rules contain a cap or limit on points and fees to qualify as a QM loan and a specific points-and-fees threshold triggering HOEPA coverage. The calculation of points and fees under both of these...
The CFPB and five other federal financial regulatory agencies issued a supplemental final rule last week that creates exemptions from certain appraisal requirements for a subset of higher-priced, higher-risk mortgage loans. The final rule provides that loans of $25,000 or less and certain “streamlined” refinancings are exempt from the Dodd-Frank Act appraisal requirements, which go into effect on Jan. 18, 2014. In addition, the final rule contains special provisions for manufactured homes, which can present unique issues in...
Bureau Updates its Mortgage Rules Readiness Guide. Last week, the CFPB released updates to its Mortgage Rules Readiness Guide in connection with the new mortgage regulations issued in January 2013 and amended through Oct. 15, 2013. The update offers financial institutions and other industry participants guidance on how to evaluate their readiness for complying with the 2013 mortgage rule changes. The updated guide incorporates changes made to Regulation Z, the implementing regulation for the Truth in Lending Act, and to...
During the first half of 2013, only about $2.05 billion of FHA loans exceeded $625,500, or about 1.5 percent of FHA business, according to Inside Mortgage Finance.
The fledgling common securitization platform project isn’t likely to get off course under new Federal Housing Finance Agency Director Mel Watt, but it probably won’t be the new regulator’s pet project either, according to industry advisors and investment bankers tracking the CSP’s trajectory. One thing is certain though: Watt – approved by the Senate just this week – is so new to the job that he’s not likely to make any major speeches or policy statements about the project until sometime in January, at the earliest. Industry officials note...
The rating services will put an emphasis on documentation of compliance with requirements for qualified mortgages and new ability-to-repay provisions. Credit-enhancement requirements appear as though they will be unchanged for the majority of jumbo MBS issued beginning in 2014, though issuers might have to make adjustments to prove to the rating services that they are compliant with new requirements from the Consumer Financial Protection Bureau. “Since most of what is being originated today already meets the standards of the rules, DBRS believes that the real challenge lies in unequivocally demonstrating QM and ATR compliance to the market and establishing confidence in the soundness of the systems and procedures that will be used to determine and ensure compliance,” DBRS said. The rating service recently released...
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