Last week, the CFPB asked the U.S. District Court for the Central District of California Southern Division to enter a final judgment and order that would shut down Student Loan Processing.US, and crack down on its sole owner, James Krause, for allegedly charging borrowers millions of dollars in illegal upfront fees for federal student loan services. The order would also require the company to pay refunds to thousands of consumers the bureau says were harmed, as well as a civil money penalty. In December 2014, the CFPB sued the company and Krause, alleging they illegally marketed and sold services promising to advise and assist borrowers applying for Department of Education student loan repayment programs. According to the bureau’s complaint, the ...

When the Securities and Exchange Commission issued a final rule in August 2014 setting disclosure requirements for publicly-registered MBS and ABS, one of the outstanding provisions was whether to apply the loan-level disclosure requirements to private-placement 144A deals. More than 18 months later, it’s unclear whether the SEC will increase disclosure requirements for private placements, though industry participants expect that some action is in the works. Charles Sweet, a practice development leader at the law firm of Morgan Lewis, noted that the SEC asked the Structured Finance Industry Group to submit refreshed comments regarding the outstanding provisions included in the so-called Regulation AB2 final rule. “They are...

The CFPB took two separate actions against Citibank last week for alleged illegal debt sales and debt collection practices. In its first action, the CFPB ordered Citibank to cough up nearly $5 million in consumer relief and pay a $3 million penalty for allegedly selling credit card debt with inflated interest rates and for failing to forward consumer payments promptly to debt buyers. The second action was taken against both Citibank and two debt collection law firms it used that allegedly falsified court documents filed in debt collection cases in New Jersey state courts. The CFPB ordered Citibank and the law firms to comply with a court order that Citibank refund $11 million to consumers and forgo collecting about $34 million ...

Disclosure requirements for publicly-registered ABS have prompted fewer investor-friendly changes than might have been expected, according to analysts at Moody’s Investors Service. The Securities and Exchange Commission adopted the so-called Regulation AB2 disclosure rule in August 2014 and a number of issuers have filed Form SF-3 registration statements in compliance with the rule. “Very few issuers have provided additional collateral and/or performance information beyond the data they were already disclosing prior to SF-3 registration statement requirements,” Moody’s said of auto ABS issuers. The rating service said...

Consumers complained to the CFPB about debt collection issues at a substantially reduced level during the fourth quarter of 2015, according to a new analysis and ranking by Inside the CFPB. During the period ending Dec. 31, 2015, consumer gripes were down 27.5 percent versus the previous quarter.Among the top 50 companies as ranked by consumer criticisms, 45 saw a double-digit percentage decline. Year over year, the story is less inspirational, with consumer kvetching down a mere 0.6 percent. Six companies saw complaints leap by triple digit percentages. To put some anecdotal flesh on these empirical bones, in the CFPB’s most recent supervisory highlights report, the bureau pointed out that during its examination of at least one debt collector, ...

The Department of Veterans Affairs and the U.S. Department of Agriculture Rural Housing Service have issued 2016 guidelines for lending to borrowers who have gone through a bankruptcy, foreclosure or a short sale. Under VA guidelines, borrowers emerging from a previous Chapter 7 bankruptcy may apply for a VA loan two years after the bankruptcy discharge. Borrowers with a Chapter 13 bankruptcy may qualify for a new VA loan if they have made at least 12 months of payments and the lender concludes that they have reestablished satisfactory credit. Before the bankruptcy-tainted borrower applies for a VA loan, however, the trustee or the bankruptcy judge must approve the new loan. The lender may put in a good word on behalf of the borrower provided the latter has met all requirements for a new loan. Borrowers may apply for a VA loan two years after a foreclosure or a short sale. In the case of ...

New issuance of non-mortgage ABS fell 6.6 percent last year even though the market’s biggest segment pushed to a new post-crash high, according to a new Inside MBS & ABS analysis. A total of $173.05 billion of non-mortgage ABS were issued in 2015, the second-highest annual output since 2008. The direction, however, was less encouraging. New issuance tumbled 17.1 percent from the third to the fourth quarter, sinking to $30.69 billion – the lowest three-month total in over three years. But with record sales in the U.S. auto industry, securitization of vehicle-finance contracts increased...[Includes two data tables]

Issuers of MBS and ABS continue to address compliance issues with the Securities and Exchange Commission’s so-called Regulation AB2. Meanwhile, the Structured Finance Industry Group has urged the SEC to continue to delay further action on disclosure proposals that remain outstanding. In August 2014, the SEC published a final rule setting a variety of disclosure requirements for the structured finance market. Issuers of publicly registered MBS and ABS were required to comply with rules, forms and disclosures established by Reg AB2 by Nov. 23, 2015. Asset-level disclosure requirements will take effect Nov. 23 of this year. During a webinar hosted by the law firm of Mayer Brown late last week, Stuart Litwin, a partner at the law firm, said...

Consumer complaints to the CFPB fell by double digits in nearly every category during the fourth quarter of 2015, with total complaints down 20.1 percent for the period, despite the one area that showed an increase – prepaid cards – skyrocketing 242.1 percent, according to the latest analysis by Inside the CFPB. However, the lending industry’s performance vis-à-vis consumers generally deteriorated in most categories on an annual basis, the latest data from the CFPB consumer complaint database show.Leading the improved performance during 4Q15 was the student loan sector, which saw gripes drop by a huge 31.7 percent, followed by declines in the debt collection space (off 27.5 percent), and in the home mortgages and credit report categories, both of which saw ...