Kathy Kraninger, President Trump’s nominee to be the next CFPB director, last week responded to questions sent by Democrat members of the Senate Committee on Banking, Housing, and Urban Affairs. The questions followed on the heels of a confirmation hearing earlier in July where Democrats accused the nominee of stonewalling. The Democratic lawmakers sent three lists of questions, over 10 pages, covering issues ranging from the nominee’s day-to-day job ...
The Federal Reserve Board recently reminded banks that redlining remains a compliance concern for the central bank. Redlining is a form of illegal discrimination in which a financial services institution provides unequal access to credit in certain markets based on the race, color or national origin of its residents. The CFPB in the past has brought several public enforcement actions for redlining. The Fed released its Consumer Compliance Supervision Bulletin ...
Fair lending in the mortgage servicing context has become an area of regulatory interest especially when dealing with disabled borrowers and those with limited English proficiency, compliance professionals said at the recent American Bankers Association’s regulatory compliance conference in Nashville.
Industry groups are calling on the CFPB to provide clarification of fair lending standards under the Equal Credit Opportunity Act as it applies to disparate impact, according to recently filed comment letters on inherited regulations. Among other things, lenders are asking the CFPB to review its use of disparate impact based on a Supreme Court of the United States’ decision in Inclusive Communities. The case established a framework for the application of disparate impact ...
Lawsuits brought by cities with allegations of violations of the Fair Housing Act (FHAct) by lenders are continuing after a decision by the U.S. Supreme Court with a mixed message for lenders.
A recent announcement by the Department of Housing and Urban Development to seek public comment on its 2013 disparate-impact rule is an opportunity for both HUD and the industry to clarify the liability issues it raises, said compliance experts. On May 10, HUD announced it would formally seek public input on whether the disparate-impact regulation is in tune with the Supreme Court of the United States’ 2015 decision in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc. The HUD rule affirmed the use of disparate impact to establish liability for violations of the Fair Housing Act. It lays out a three-step approach to determining FHAct liability. The first step requires the plaintiff to demonstrate that a practice or a policy has a discriminatory effect on a protected class of persons. According to the rule, liability may be established even if the ...
The CFPB released its seventh annual debt collection report, signaling further coordination with the Federal Trade Commission to take an active approach in combating illegal practices by industry players. The CFPB shares enforcement responsibilities with the FTC under the Fair Debt Collection Practices Act. Acting Director Mick Mulvaney has said that roughly one-third of the consumer complaints received last year were tied to debt collection, which suggests where priorities should be set ...
The CFPB’s civil investigative demands seem to be particularly burdensome to small mortgage lenders, as painful experiences were shared via comments responding to the agency’s request for information. The bureau issued a RFI on CIDs in January, a vehicle for the agency to obtain information from people and institutions relevant to an investigation. One mortgage lender that has received one CID said its experience dealing with CIDs is “frustrating, unduly burdensome and particularly disruptive to its…
Realtors and fair-lending advocates are outraged over reports that Housing and Urban Development Secretary Ben Carson has ordered the removal of language ensuring “inclusiveness and discrimination-free communities” from the department’s mission statement. A spokesperson for HUD denied the report, blaming it on faulty reporting by the Huffington Post on March 6. Carson later followed up with his own denial in an open letter to HUD employees, which the department made public. The initial press report cited a March 5 memo written by Amy Thompson, assistant secretary for public affairs, and addressed to HUD political staff. In the memo, Thompson talked about ongoing efforts to update the mission statement to align HUD’s mission with the Trump administration’s priorities. She added that Carson helped in the development of the new statement as well as urged senior staff to ...
Accounting firm Deloitte & Touche has agreed to pay the federal government $149.5 million to settle False Claims Act liabilities arising from its audits of failed FHA lender Taylor, Bean &Whitaker Mortgage Corp.Deloitte was TBW’s independent outside auditor from 2002 through 2008, when the subprime mortgage market unraveled, triggering a financial and housing crisis. The Department of Justice alleged that, during the period in question, TBW had been running a fraudulent scheme involving the purported sale of fictitious or double-pledged mortgages. According to court documents, Lee Bentley Farkas, former chairman of TBW, and six other banking executives engaged in a more than $2.9 billion fraud scheme that contributed to the failures of Colonial Bank and TBW. Farkas and his crew allegedly misappropriated in excess of $1.4 billion from Colonial Bank’s warehouse lending division in Orlando, FL, and approximately $1.5 billion from Ocala Funding, a mortgage-lending facility controlled by TBW.
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