The American Bankers Association last week issued the first industry call for the CFPB to delay implementation of its pending Home Mortgage Disclosure Act final rule in its entirety, citing compliance difficulties and concerns about consumer data privacy. The call came in a white paper submitted to the Treasury Department as part of the banking industry’s response to President Trump’s executive order earlier this year, EO 13772, outlining “core principles” for financial regulation. The ABA has three main gripes about the HMDA rule, most of which is scheduled to take effect in January 2018. First, it said that collecting all of the required data will be costly. “Although it is not simple to distill the cost estimates from the bureau’s ...

SCOTUS Sides With City of Miami in Predatory Lending Case. The Supreme Court last week issued a narrow decision in favor of the City of Miami in a case stemming from losses the municipality claimed it suffered from predatory mortgages. Industry analysts are divided on what the ruling means for lenders... Goldman Sachs Continues Progress on Consumer-Relief Obligation Under Mortgage Settlements. Wall Street firm Goldman Sachs is more than one third of the way towards meeting its $1.8 billion consumer-relief obligation under the April 11, 2016, mortgage-related settlements it reached with the U.S. Department of Justice and the states of California, Illinois and New York, according to retired Boston University law professor Eric Green, the independent monitor of the consumer-relief portions of the agreements ...

The CFPB’s latest fair lending report to Congress, quietly distributed earlier this month, indicates that two mortgage issues will stay on the agency’s front burner: redlining and servicing. On the redlining front, the CFPB said it will “work to evaluate whether lenders have intentionally discouraged prospective applicants in minority neighborhoods.” When it comes to servicing, the bureau indicated it will “determine whether some borrowers who are behind on their mortgage … payments have more difficulty working out a new solution with the servicer because of their race, ethnicity, age, or gender.” The agency continued: “We are committed to ensuring fair, equitable and nondiscriminatory access to credit by finding and eliminating discriminatory lending practices, and also by encouraging lenders to maintain ...

In a speech at a National Community Reinvestment Coalition conference in Washington, DC, recently, CFPB Director Richard Cordray spelled out the ways the bureau is working to end the practice of redlining, and not just in the provision of mortgage credit. “We are working to end discrimination in mortgage lending, help make sure that safe and reliable financial products are more readily available, and expand access to credit for those who are currently shut out,” Cordray told attendees. He cited two cases in which his agency worked with the U.S. Department of Justice, one involving Bancorp South and another involving Hudson City Savings Bank. In the Bancorp South case, the government asserted the lender denied some mortgage loans to African-Americans ...

Thanks in part to the recent consent order Wells Fargo reached with the CFPB, the Office of the Comptroller of the Currency recently gave the top mortgage lender in the U.S. a rare “needs to improve” rating under the Community Reinvestment Act – this despite citing Wells’ overall “outstanding” performance on the lender’s performance examination components, the lender noted. The rating is based on the most recent CRA performance evaluation, which covers the years 2009-2012. The agency referenced the lender’s recent $100 million consent order with the CFPB, and a related action brought by the city and county of Los Angeles that resulted in a $50 million fine, and numerous other enforcement actions. The OCC said the bank’s overall CRA performance ...

Late last week, the CFPB proposed amendments to Regulation B, the implementing regulation of the Equal Credit Opportunity Act, to give mortgage lenders greater flexibility in collecting information about consumer ethnicity and race. Reg B restricts lenders’ ability to ask consumers about their race, color, religion, national origin or gender, except in certain circumstances. These circumstances include required collection of the information for some mortgage applications under the regulation. Under the proposal, mortgage lenders would not have to maintain different practices depending on their loan volume or other characteristics, allowing more lenders to adopt application forms that include expanded requests for information about a consumer’s ethnicity and race, including the revised uniform residential loan application issued by government-sponsored enterprises Fannie ...

The Department of Housing and Urban Development is apparently poised to begin an investigation of allegations of redlining on the part of CIT Group, Pasadena, CA, through its CIT Bank subsidiary, the successor to OneWest Bank, after agreeing to accept a complaint against the lender filed by the California Reinvestment Coalition. The CRC alleges the bank violated and continues to violate the Fair Housing Act by providing residential real estate-related transactions in a manner that discriminates on the basis of race, color and national origin. Specifically, the complaint alleges that since at least 2011, CIT Bank discriminated in marketing and originating housing-related products, as evidenced by the low number of mortgages it made to African-American, Asian-American and Latino borrowers in ...

The CFPB recently issued a request for information into ways to expand access to credit for consumers who are “credit invisible,” that is, those who don’t have enough credit history to generate a credit score. The bureau issued the RFI to drum up public feedback on “the benefits and risks of tapping alternative data sources such as bills for mobile phones and rent payments to make lending decisions about consumers whose lack of credit history might otherwise block opportunities.” According to the CFPB, there are 26 million Americans who are credit invisibles. “Another 19 million consumers have a credit history that has gone stale, or is insufficient to produce a credit score under most scoring models,” said the agency. The ...

Housing and Urban Secretary-Designate Ben Carson said he would want an expert in housing finance to lead the FHA and help draw disillusioned lenders back into the FHA single-family mortgage program. In a written response to questions from Sen. Sherrod Brown, D-OH, ranking minority member of the Senate Committee on Banking, Housing and Urban Affairs, Carson provided no detail on how he would entice previous lenders to return to the FHA. Carson made clear, however, that if confirmed he would seek a “strong housing finance practitioner who believes in the mission of the FHA” for the job of FHA commissioner. “We will work hard to balance mission and risk to preserve and sustain FHA now and into the future,” he wrote. “We will also use existing authorities to increase the certainty of loan eligibility in an effort to attract back many of the lenders who are no longer ...

Final Civil Action: Primary Residential Mortgage. The Department of Housing and Urban Development’s Office of the Inspector General has recommended that the department’s Office of Legal Counsel acknowledged $3.13 million of a $5 million settlement agreed to by Primary Residential Mortgage is due HUD. Primary agreed last September to a $5 million settlement with the Department of Justice to resolve allegations of failing to comply with FHA requirements in connection with its origination, underwriting and endorsement of 100 FHA-insured loans. Primary’s settlement is neither an admission of guilt nor assumption of any liability that may arise from the flawed transactions, the IG said. As of Oct. 4, 2016, the settlement amount due HUD had been paid in full. Moody’s Downgrades $243 Million of FHA/VA Residential MBS. Moody’s Investors Service has downgraded the ...