The overwhelming majority of private student loan borrowers who apply for a co-signer release were rejected, according to a recent report from the CFPB’s student loan ombudsman. “Many private student lenders advertise options to release a cosigner from a private student loan,” the report began. “However, an analysis of industry responses to the CFPB’s information request found that the lenders and servicers surveyed granted very few releases – of those borrowers that applied for co-signer release, 90 percent were rejected.” The CFPB also said that consumers have little information on the specific borrower criteria needed to obtain a co-signer release. “Consumers reported being confused about their eligibility for obtaining a co-signer release as well as not understanding why they had been ...
A new U.S. Consumer Coalition/Zogby Analytics poll found that a majority of Americans oppose the CFPB’s monitoring of Americans’ credit card purchases. According to the poll, which sponsors claim is the first national survey about the recent operations of the government agency, 55 percent of respondents believe the CFPB’s data collection program is similar or worse than the controversial NSA monitoring program. Further, only 20 percent of those polled believed that the CFPB should be able to collect and review Americans’ credit card statements without their knowledge. The poll also found that the majority of Americans oppose the bureau’s ongoing efforts to restrict access to certain consumer financial products. Nearly 70 percent of those polled said they believed that the ...
CFPB is Investigating Bankrate. Bankrate revealed recently that the CFPB has issued civil investigative demands to the company and certain employees in an effort to seek documents and answer questions relating to Bankrate’s quality control process for its online mortgage interest rate tables. The company has cooperated in responding to the CIDs, Bankrate said in a Form 10-K filing with the Securities and Exchange Commission. “The company received a communication from the CFPB inviting the company to respond to the CFPB’s identified issues in the form of a notice of opportunity to respond and advise during which the CFPB identified potential claims it might bring against the company,” the filing said. Bankrate said it has submitted a response that it ...
Neither of the credit-rating industry’s perennial market leaders – Standard & Poor’s and Moody’s Investors Service – managed to claim a top spot during the first quarter of 2015, according to a new Inside MBS & ABS ranking. Fitch Ratings ranked as the top player in rating the bigger non-mortgage ABS market. The company rated 43 ABS issued during the first quarter that represented 64.2 percent of total issuance by dollar amount. The company rated all eight credit-card ABS issued in early 2015, along with most of the student-loan deals. Fitch raised...[Includes two data tables]
Proposed credit card ABS disclosure requirements from the Securities and Exchange Commission could compromise commercially sensitive proprietary issuer information and prove too burdensome for issuers, according to the Structured Finance Industry Group. The industry group this week unveiled an alternative card ABS format that was endorsed by both its issuer and investor members. The three-part disclosure “would provide more information on more metrics” than either of two options proposed by the SEC. Last year, the SEC adopted...
The CFPB last week promulgated its long-awaited final rule allowing it to supervise larger nonbank auto-finance companies for the first time. Currently, the bureau supervises auto financing at the largest banks and credit unions. The new rule extends that supervision to any nonbank auto-finance company that makes, acquires or refinances 10,000 or more loans or leases in a year. Under the rule, those companies will be considered “larger participants,” and the bureau may oversee their activity to ensure they are complying with federal consumer financial laws. Those laws include the Equal Credit Opportunity Act, the Truth in Lending Act, the Consumer Leasing Act, and the Dodd-Frank Act’s prohibition on unfair, deceptive or abusive acts or practices. The new rule is ...
Industry Groups Urge Restructuring of CFPB. Wading into risky political territory, a number of industry groups last week urged Congress to support H.R. 1266, legislation that would revamp the governing structure of the CFPB. Submitting a statement for the record to the House Financial Services Subcommittee on Financial Institutions and Consumer Credit, the industry groups said consumers and the industry would be better served by changing the CFPB governance structure from a single director to a bipartisan five-person commission as used by other federal agencies. “The CFPB has tremendous authority to supervise a multi-trillion dollar industry, which as we have learned, can have incredible ramifications on our economy,” the statement said. “As such, it is imperative the CFPB remain stable ...
There is good news for investors in private student-loan ABS these days, according to the latest market intelligence from industry analysts. Student loan performance was healthy in the first quarter, and more growth is expected going forward. Continued strong performance trends were seen in repayment, delinquencies and charge-offs for private student loans through March 31, 2015, according to the semi-annual private student-loan performance report from MeasureOne, which was released earlier this week. Among the key findings, year-over-year delinquencies continued...
Securitization industry participants are concerned about a recent ruling in a federal appeals court that overturned longstanding preemption certain nonbanks have enjoyed from state laws, including standards for debt collection. The ruling in late May by the Second Circuit Court of Appeals in the case of Madden v. Midland Funding could pose “significant implications for the securitization industry,” according to the Structured Finance Industry Group. The case involves...
The Financial Industry Regulatory Authority started publishing pricing data for a broad range of ABS this week in an effort to increase transparency. Industry participants suggest that the new disclosures will prompt a decrease in trading and have some impact on pricing. The ABS pricing details are available through the Trade Reporting and Compliance Engine and include deals issued as 144A private placements. “The dissemination of transaction information in ABS is...