Real estate, title and mortgage industry groups are doing more than lobbying Congress and the CFPB for relief when it comes to compliance with and enforcement of the bureau’s Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure (TRID) rule. They are also continuing to work hard to get their own respective memberships as up to speed as possible before examiners show up on their doorsteps. For instance, the American Bankers Association sent a letter to member CEOs last week to assist executive management and line business managers in decision making as the industry completes final arrangements to comply with TRID. “Bankers are making assessments of systems readiness, staff training, capabilities of settlement services providers, and potential compliance risk ...

Mortgage Bankers Association President and CEO David Stevens again called for formal guidance from the CFPB on the legitimacy of marketing services agreements in the wake of some recent troubling developments after the bureau assumed enforcement of the Real Estate Settlement Procedures Act as a result of the Dodd-Frank Act. Speaking at the MBA’s recent 2015 regulatory compliance conference in Washington, DC, Stevens told a crowd of attendees, “We sent a letter to [CFPB] Director [Richard] Cordray weeks ago asking that the bureau simply clarify whether MSAs are considered acceptable and what constitutes an acceptable [agreement] if that’s the case. That was our question. We’re not saying we’re for them, against them; just please tells us if we’re going to ...

The CFPB and the Department of Justice Thursday brought a $33.75 million redlining enforcement action against Hudson City Savings Bank, accusing the institution of denying residents in majority black and Hispanic neighborhoods fair access to mortgage credit. The joint action alleges that Hudson City illegally avoided and thereby discouraged consumers in majority black and Hispanic neighborhoods from applying for credit by avoiding locating branches and loan officers in such communities and by not using mortgage brokers in such neighborhoods as well. The government also accuses the bank of excluding majority black and Hispanic communities from its marketing strategy and from credit assessment areas. Under the terms of a proposed consent order pending before a court, Hudson City would have to ...

Last week, the CFPB announced it had brought two separate actions against Cincinnati, OH-based Fifth Third Bank, one for alleged discriminatory auto loan pricing and another for alleged illegal credit card practices. In the auto-lending enforcement action, the bureau and the Department of Justice alleged that the bank violated the Equal Credit Opportunity Act by charging African-American and Hispanic borrowers higher dealer markups for their auto loans than non-Hispanic white borrowers. They also asserted that Fifth Third’s allegedly illegal discriminatory pricing and compensation structure meant thousands of minority borrowers from January 2010 through September 2015 were charged, on average, over $200 more for their auto loans. The CFPB and DOJ action requires Fifth Third to change its pricing and compensation ...

The CFPB recently issued some final changes to its mortgage rules to help foster responsible lending by small creditors, especially those operating in rural and underserved areas. The new rule, which was proposed in January, aims to increase the number of community banks and credit unions that are able to offer certain types of mortgages in rural and underserved areas. It also gives small creditors time to adjust their business practices to comply with the rules. “The financial crisis was not caused by community banks and credit unions, and our mortgage rules reflect the fact that small institutions play a vital role in many communities,” said CFPB Director Richard Cordray. “These changes will help consumers in rural or underserved areas ...

The CFPB, the Department of Education, and the Department of the Treasury late last week issued a joint statement of principles “to improve student loan servicing practices, promote borrower success and minimize defaults.” The agencies said they are committed to working together so that all student loan borrowers have access to the information they need to repay their loans responsibly and avoid default, and to protections so that they will be treated fairly even if they are struggling to repay their loans.They also want student loan borrowers to have access to certain mechanisms so that “errors are resolved expeditiously, and assurances that student loan servicers, both in the marketplace and through federally-contracted companies, are held accountable for their conduct.” ...

Industry Anxiety at a Fever Pitch? Or Just Good Public Relations? The new TRID rule, which became active on Saturday, may only be the tip of the regulatory iceberg, according to sister publication IMFnews. Several lenders interviewed readily admitted that the new TILA/RESPA disclosures are definitely easier to understand. That’s the good news. “The bad news is that they feel the CFPB continues to miss their central message: that incorporating technology changes to their systems to make TRID happen on time has been an operational nightmare, and they feel that Director Richard Cordray has been hardly sympathetic to their plight,” the publication reported late last week. Although the TRID headache may be eased (for now) thanks to a letter that ...

Was Industry “Foaming at Mouth” Over ATR Liability Much Ado About Nothing? “All this foaming at the mouth about legal liability [on qualified mortgage standards] did not pan out. It was an over-reaction,” CFPB Director Richard Cordray said last week. During a hearing held by the House Financial Services Committee, the director noted that he recently met with the CEOs of the top 40 mortgage companies as part of an event hosted by the Mortgage Bankers Association. Cordray said the CEOs revealed that none of these lenders have faced lawsuits alleging violations of standards for qualified mortgages. One industry veteran later said that Cordray took “the disingenuous position that since no lawsuits have been filed, all the concerns about legal ...

Consumer Complaints Tick Slightly Upward From Year-Ago Levels. A small 3.9 percent drop in overall consumer complaints to the CFPB during the third quarter helped keep a lid on rising complaints at the nine-month mark versus a year ago, according to an analysis by Inside the CFPB. (See chart on previous page.) The data show a modest 4.3 percent uptick in consumer criticisms at the end of September 2015 compared with the same nine-month period in 2014. The biggest drops were seen in the payday lending space (down 18.7 percent quarter to quarter and 7.1 percent year over year) and in the residential mortgage space (down 10.9 percent and 7.5 percent, respectively)....

Add loan-originator compensation rules to the list of things hindering the origination of loans that fall outside the qualified-mortgage standard. Bob Magee, chief investment officer at Shellpoint Partners, said many loan officers and brokers are reluctant to work on non-QMs because the loans take more time to originate, often get rejected and yet tend to offer the same compensation as an agency mortgage. “If I have loan officers who are paid on a commission for ...