The CFPB, together with four other federal agencies, last week affirmed it will not take enforcement action based on supervisory guidance. The Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corp., National Credit Union Administration, Office of the Comptroller of the Currency and the CFPB said supervisory guidance does not have the force and effect of law and cannot lead to enforcement actions. “Examiners will not criticize a supervised ...

A recent report by a government watchdog highlighted the actions taken by Equifax and the CFPB during the year since the public learned about the credit reporting agency’s serious data breach. The U.S. Government Accountability Office released a report on the Equifax data breach, describing in detail how hackers exploited vulnerabilities in the Equifax system to gain access to sensitive personal information for at least 145.5 million individuals. According to ...

The CFPB should drop the current debt-to-income ratio cap and the so-called GSE patch from the qualified-mortgage definition, the Urban Institute recommends. The CFPB is required by statute to review the ability-to-repay rule, which includes the QM definition, and issue a final report on its findings by Jan. 10, 2019. One of the most important elements of the review could be the fate of the “GSE patch,” which is set to expire in January 2021, or on the day ...

Almost 10 months into Acting Director Mick Mulvaney’s tenure at the CFPB, the bureau filed its first new lawsuit. The CFPB last week filed charges against Future Income Payments (FIP), Irvine, CA, in federal district court in the Central District of California. The bureau alleged that FIP’s pension-advance products were loans with interest rates “that are substantially higher than credit card interest rates,” according to the complaint, which also names the company's owner ...

CFPB Updates Model Disclosures Under Fair Credit Reporting Act . The CFPB last week issued an interim final rule updating two model disclosures to reflect changes made to the FCRA by the recent Dodd-Frank reform act.The Economic Growth, Regulatory Relief, and Consumer Protection Act, which became law in May, requires nationwide consumer reporting agencies to provide “national security freezes” free of charge to consumers. The [Includes three briefs] ...

The Consumer Financial Protection Bureau should remove the cap on debt-to-income ratios that applies to certain qualified mortgages, according to a proposal by the Housing Finance Policy Center. Such a move could boost non-agency lending, according to industry analysts. The CFPB is currently assessing whether changes are needed for QM standards, including potentially addressing the so-called government-sponsored enterprise patch. The patch allows mortgages with DTI ratios ...

The Securities and Exchange Commission levied $16.3 million in penalties against Moody’s Investors Service last week to settle charges involving internal control failures and failures to clearly define and consistently apply credit rating symbols. The bulk of the fine relates to more than 650 non-agency mortgage-backed security ratings issued between 2010 and 2013 that subsequently had to be corrected. Sens. Mark Warner, D-VA, and Mike Rounds ... [Includes four briefs]

The Urban Institute advocates dropping the debt-to-income cap for qualified mortgages to level the playing field between the government-sponsored enterprises and the private market.

The CFPB in the Trump era is likely to abandon or limit the use of the disparate-impact theory in enforcing fair lending laws, said attorneys. “Given the lack of ‘effects’ language in [the Equal Credit Opportunity Act] and the [CFPB’s] stated focus on enforcing statutes as they are written, we expect that they will determine that ECOA does not support a disparate-impact theory,” said Jeffrey Naimon, a partner at Buckley Sandler. Under the disparate-impact theory ...

A top CFPB official in charge of protecting student borrowers stepped down from the agency in late August, blaming the leadership of Acting Director Mick Mulvaney. Seth Frotman, who was the student loan ombudsman at the agency, said in his letter of resignation the current leadership of the bureau has “turned its back on young people and their financial futures.” He added: “The bureau is now content doing the bare minimum for [consumers] while simultaneously ...