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 ...

The CFPB late last week issued a rule to clarify partial HMDA exemptions for small financial institutions ushered in under the Dodd-Frank reform act. The Economic Growth, Regulatory Relief, and Consumer Protection Act, signed into law in May, exempts depositories – including credit unions – that originated fewer than 500 closed-end mortgages or 500 open-end lines of credit in each of the two preceding calendar years from certain expanded reporting ...

Sens. Mark Warner, D-VA, and Mike Rounds, R-SD, in late August introduced bipartisan legislation amending the CFPB’s ability-to-repay rule to expand financing options for self-employed mortgage borrowers. The CFPB’s qualified-mortgage rules have relatively strict requirements which make it difficult for borrowers who don’t have traditional income sources to obtain mortgage credit. But the Self-Employed Mortgage Access Act of 2018 would expand ...

The Department of Treasury has signaled that the CFPB should work with other federal agencies and state regulators to create consistent mortgage servicing regulations across the industry. In a recent report on nonbank issues, Treasury expressed its concern regarding inconsistency in mortgage servicing regulations that could create compliance headaches for residential loan processors while increasing costs. “In light of that, the CFPB is taking the lead ...

A Democratic lawmaker on the House Financial Services Committee is recommending that the CFPB include financial technology (fintech) companies in its complaint database to protect small business borrowers from discrimination. Rep. Emanuel Cleaver, D-MO, last year launched a survey to study the use of automated algorithms in loan applications in order to determine whether fintechs protect companies from unintentional discrimination. Many fintech lenders argue ...

The CFPB late last month announced 2019 changes in dollar thresholds for several provisions under Regulation Z, implemented under the Truth in Lending Act. The bureau adjusts those amounts annually based on the percentage change reflected in the Consumer Price Index. The adjustments would affect the Credit Card Accountability Responsibility and Disclosure Act of 2009, the Home Ownership and Equity Protection Act and the ability to ...

The CFPB announced that it will hold a day-long symposium, “Building a Bridge to Credit Visibility,” to explore challenges many consumers face in getting credit. This event will take place on Sept. 17 in the CFPB’s Washington, DC, headquarters, and will be streamed live. The CFPB said the symposium “will convene a diverse set of stakeholders to explore challenges in overcoming barriers to expand fair, equitable, and non-discriminatory access to credit [Includes three briefs] ...

Fannie Mae and Freddie Mac shareholders faced another hurdle last week when the Eighth Circuit Court ruled that the Treasury sweep of GSE profits was legal. In fact, in the 14-page ruling, filed on Aug. 23, the judge said, “This shareholder lawsuit crashes into a roadblock before it can get started,” and stated that the Federal Housing Finance Agency did not exceed its conservatorship powers, as the plaintiffs argued. “Congress, intentionally or otherwise, may have created a monster by handing an agency breathtakingly broad powers and insulating the exercise of those powers from judicial review. Even so, clear statutory text dictates the outcome,” said Judge David Stras in Saxton vs. the FHFA.

It has been more than three years since FHA introduced a new streamlined process of identifying loan defects and their severity to minimize or avoid enforcement action and hefty penalties under the False Claims Act. Despite calls by the mortgage industry to improve and clarify the process – the Single-Family Loan Quality Assessment methodology or “defect taxonomy” – the FHA has yet to make a move to meet industry demands for more detailed defect taxonomy. Contacted for an update on the defect taxonomy, a Housing and Urban Development spokesperson said simply, “Nothing to report on this.” An outgrowth of lender concern over the government’s indiscriminate use of the FCA to prosecute mortgage fraud and recover FHA losses, the defect taxonomy establishes nine categories of loan defects in loans it endorses. The nine defect categories replaced the 99 loan defect codes that were ...

Michael Bright Clears First Hurdle to Becoming President of GNMA. The Senate Committee on Banking, Housing and Urban Affairs this week voted to confirm Michael Bright as president of Ginnie Mae. Bright’s confirmation is broadly positive for housing, said Jaret Seiberg, financial services and housing policy analyst for Cowen Washington Research Group. Bright is a former staffer for Sen. Bob Corker, R-TN, and has a history of working well with Republicans and Democrats, said Seiberg. In addition, he has worked closely with Sen. Elizabeth Warren in cracking down on loan churning, he added. The Mortgage Bankers Association welcomed the news. “Mr. Bright would bring significant experience within the mortgage industry and on Capitol Hill to the role of Ginnie Mae president,” said Bill Kilmer, the group’s chief lobbyist. “He has demonstrated a commitment to bipartisan solutions regarding complex ...