Calls increased last week for Republicans in the Senate to drop their opposition to an up-or-down vote on President Obama’s nomination of Richard Cordray to be the first director of the controversial Consumer Financial Protection Bureau. What’s noteworthy is that one Republican in the Senate, Scott Brown from Massachusetts, broke ranks with the rest of his party in saying he supported the nomination. Brown may be feeling the political heat of his challenger for the Senate seat he holds, Harvard professor Elizabeth Warren, the architect of the CFPB and the first special advisor to the Treasury hired to get the new bureau up and running after its creation by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The Consumer Financial Protection Bureau is about to begin its Consumer Risk Assessment process, one of the key components of the agency’s Supervision and Examination Manual. This process evaluates CFPB-supervised entities based on the amount of risk their activities pose to consumers, identifies the various sources of risk, and assesses the quality of risk controls they’ve put in place. This process is definitely something that those who have been concerned about the expansive powers of the bureau should ready themselves for, according to attorneys in the mortgage banking and consumer financial products practice at the law firm of K&L Gates.

The Consumer Financial Protection Bureau, in a conciliatory gesture to a wary industry, recently announced the existence of a formal Early Warning Notice process that will provide advance notice of potential enforcement actions to individuals and firms under investigation. The process is modeled on similar procedures that have been successful at other federal agencies, according to the CFPB. It starts with the bureau’s Office of Enforcement explaining to individuals or firms that evidence gathered in a CFPB investigation indicates they have violated consumer financial protection laws. Recipients of an Early Warning Notice are then invited to submit a response in writing, within 14 days, including any relevant legal or policy arguments and facts. The Early Warning Notice process “strikes a balance between the goal of fairness to those being investigated and our mission to protect consumers,” said Raj Date, special advisor to the secretary of the Treasury for the CFPB. “This process will help us fulfill our commitment to transparency in enforcing the law.”

Maryland. A federal jury recently convicted Andrew Hamilton Williams, of Hollywood, FL, owner and founder of “Metro Dream Homes,” of fraud conspiracy, wire fraud and conspiracy to commit money laundering in connection with his alleged participation in a massive mortgage fraud scheme which promised to pay off homeowners’ mortgages on their “Dream Homes,” but left them to fend for themselves. ... Minnesota. In Taft v. Wells Fargo Bank, N.A., the U.S. District Court for the District of Minnesota has ruled that a national bank is not bound by state laws that would restrict the fees it can include in principal when making a reverse mortgage loan. In this case, the plaintiff accused the bank of violating Minnesota and South Dakota law by including origination fees, servicing fees, and mortgage insurance charges in the principal amount of her mother’s reverse mortgage loan.

Federal Housing Finance Agency.Office of the Comptroller of the Currency. Single Uniform Audit Program discussed. Representatives of mortgage servicing and foreclosure law firms met with officials from the Federal Housing Finance Agency and the Office of the Comptroller of the Currency recently to discuss development of a Single Uniform Audit Program to replace the individual servicer reviews of foreclosure law firms as required by the bank regulators’ consent orders and regulatory directives. Industry reps are said to be developing a straw-man proposal.

House Financial Services Financial Institutions Subcommittee Chairwoman Shelley Moore Capito, R-WV, and ranking member Rep. Carolyn Maloney, D-NY, last week introduced H.R. 3461, the Financial Institutions Examination Fairness and Reform Act, to address widespread industry concerns with bank examinations. Some bankers say the reasons for certain decisions made by regulators during the examination process have not been clear. Bankers have also reported that some examiner decisions have effectively and unnecessarily reduced the amount of capital available for increased lending.

The Government Accountability Office recently confirmed the view widely held in the mortgage finance industry that federal regulators are not doing enough to analyze the cost and other effects of implementing the Dodd-Frank Act. “Little is known about the actual impact of the final Dodd-Frank Act rules, given the short amount of time the rules have been in effect,” the GAO said. The government watchdog noted that federal financial regulators are required to perform a variety of analyses, but the requirements vary and none of the regulators are...

The National Credit Union Administration this week announced settlement agreements with Deutsche Bank Securities and Citigroup stemming from their roles as underwriters that sold non-agency MBS to credit unions that eventually failed. Deutsche Bank is paying the bigger amount, $145.0 million, while Citi’s payment will be $20.5 million. Neither firm admitted fault as part of the settlement. The proceeds from the settlements will be used to offset assessments that the NCUA has levied against credit unions to pay the cost of cleaning up the failures of...

The National Credit Union Administration this week reached settlements with two underwriters of non-agency mortgage-backed securities. The settlements also have implications for non-agency MBS issuers and underwriters facing lawsuits from the Federal Housing Finance Agency. Deutsche Bank Securities agreed to pay the NCUA $145.0 million to reduce losses associated with five failed credit unions. Citigroup also agreed to pay the NCUA $20.5 million to settle similar charges. The settlements included terms stating that the issuers did not admit fault. NCUA Board Chairman Debbie Matz warned that the settlements are...

Legislation that would keep VA funding fees at their current levels through FY 2016 was sent this week to President Obama for signature. The House of Representatives passed the bill, H.R. 674, the 3 Percent Withholding Repeal and Job Creation Act of 2011, on Nov. 16, with amendments from the Senate. The Senate approved the bill on Nov. 10. The president is expected to sign the bill. However, if the bill is not signed by Nov. 18, funding fees will decrease as scheduled for a short period, according to the Department of Veterans Affairs in a published guidance to VA lenders. If funding fees do reset to the lower amounts ...