Student loan borrowers are encountering difficulties when they try to file an application for income-driven repayment (IDR) plans, according to the CFPB’s midyear update on student loan complaints, which was released late last week. Since 2009, the vast majority of borrowers with federal student loans have a right under federal law to set their monthly student loan payments based on their income. For borrowers who are unemployed or earn low wages, these IDR plans provide for a “payment” as low as $0 per month.“Many borrowers depend on student loan servicers to inform them about the availability of IDR options and for processing borrowers’ enrollment in these plans,” said the bureau. “This report observes that borrowers encounter obstacles when submitting ...
GOP Legislation Would Exempt Small Nonbank Lenders from CFPB Examination, Enforcement. Rep. Roger Williams, R-TX, recently introduced H.R. 5907, the Community Mortgage Lenders Regulatory Act of 2016, which would exempt qualifying smaller, “responsible” nonbank lenders from CFPB examinations and primary enforcement authority. To qualify, a nonbank mortgage lender must have net worth of less than $50 million; have originated fewer than 25,000 loans or $5 billion in loans the preceding year; and have originated at least 95 percent of their mortgage loans as qualified mortgages the last three years. As currently applies to most banks, a qualifying “responsible community lender” would not be subject...
New issuance of non-mortgage ABS faltered in the second quarter of 2016, but the market has rebounded strongly in recent weeks, according to a new Inside MBS & ABS analysis. New ABS issuance totaled $43.07 billion in the second quarter, a modest decline from the first three months of 2016. That put year-to-date production at just $86.42 billion, off 18.0 percent from the first six months of 2015. Activity picked up...[Includes two data tables]
The Republicans in the U.S. House of Representatives are looking a little more serious about pushing legislation that would change the leadership structure of the CFPB from that of a single director to a five-member commission and subject the bureau to the congressional appropriations process. Last week, the full House passed appropriations legislation with provisions that would do just that. Other language would restrict the CFPB’s ability to limit payday lenders, halt the bureau’s efforts to end forced arbitration clauses in credit card contracts, and rescind the agency’s guidance on indirect automobile lending. One additional provision would defund the CFPB’s efforts to stop what it calls predatory lending to borrowers looking to purchase a manufactured home, and another would make ...
The CFPB’s TILA/RESPA Integrated Disclosure Rule – dubbed TRID – may have been causing mortgage lenders severe heartburn since it took effect in early October, but you wouldn’t know it by looking at consumer complaints about the mortgage application and origination process. They fell by 9.3 percent during the second quarter, according to a new analysis and ranking by Inside the CFPB – part of a larger drop off that found gripes down by 16.5 percent for the period, and off 4.5 percent year over year. The number of complaints that lenders responded to in a timely manner dropped 16.1 percent quarter over quarter, and 4.3 percent year over year. However, that could be because perhaps lenders/servicers were making more of an effort [With two exclusive charts]...
Pleas from the securitization industry for the Supreme Court of the United States to hear an appeal of Midland Funding v. Madden were rejected this week, prolonging uncertainty in sectors of the secondary market. SCOTUS may still consider the issue at some point going forward, according to analysts, providing hope for the industry. Richard Johns, executive director of the Structured Finance Industry Group, said the denial of certiorari for Madden will result in significant challenges for borrowers of credit cards, mortgages, auto loans and other financial products. “The injection of uncertainty into the credit markets will ultimately increase the cost of credit for all and directly impact the real economy,” he said. The Madden case involved...
Standard & Poor’s lost a little market share in the business of rating non-mortgage ABS during the first quarter of 2016, but the firm still was the most active player in the market, according to a new ranking by Inside MBS & ABS. S&P rated 58.4 percent of the $41.42 billion of non-mortgage ABS issued in early 2016, down from its 61.5 percent share for all of last year and its 64.1 percent share back in 2014. The company’s strong suit was in vehicle-finance ABS, where it rated 64.7 percent of the market, by dollar volume. While S&P’s share was up slightly in a few categories, its stake in the credit card ABS segment fell...[Includes two data tables]
The CFPB has issued its long-awaited payday lending proposed rule, in essence a highly restrictive ability-to-repay rule for small-dollar lending. Under the proposed full-payment test, lenders would be required to determine whether the borrower can afford the full amount of each payment when it’s due and still meet basic living expenses and major financial obligations.
Commercial banks and thrifts reported a further decline in their holdings of non-mortgage ABS during the first quarter, according to a new Inside MBS & ABS analysis of call-report data. As of the end of March, banks held a combined $131.96 billion of ABS in their portfolio, including assets intended to be held to maturity as well as those available for sale. That represented a 2.3 percent drop from the end of 2015, and a hefty 15.9 percent decline from a year ago. It was...[Includes two data tables]
Consumer complaints about their mortgages fell from the second-most complained about financial product or service in March, after debt collection, to third place in the CFPB’s monthly ranking for April. Credit reporting moved up into the second slot. The latest data show 7,300 consumer gripes to the CFPB last month, based on the bureau’s three-month rolling average. That was down 9 percent since the prior month. There were 4,587 consumer criticisms related to credit reporting in April, off 6 percent from March’s level.And mortgage-related kvetching dropped 12 percent, down to 4,347 notices. These three products accounted for about 68 percent of the 23,870 complaints submitted in April of this year. Elsewhere in the data mix, complaints about payday lending ...