During a heated hearing last week on Capitol Hill, the nominee to become the next CFPB director, Kathy Kraninger, identified some of her broad priorities for the consumer agency if she gets the job. Kraninger appeared to embrace the industry-friendly approach for the bureau that has been set by her boss at the Office of Management and Budget, Mick Mulvaney, who is also the acting director at the CFPB. Sen. Sherrod Brown, D-OH, said Kraninger showed a philosophy ...

The CFPB will reduce the size of its three advisory groups to just six members each and cut annual operating costs by more than half, according to new advisory board charters obtained by Inside the CFPB from sources on Capitol Hill. The charters were signed by Acting Director Mick Mulvaney on June 5, a day before the CFPB announced it would fire all the serving members of the three panels, reconstituting them as “smaller” groups. Before Mulvaney took his ...

The Department of Housing and Urban Development has issued an interpretive rule to clear up some of the confusion created by the recently approved Dodd-Frank reform act regarding the eligibility of certain VA refinance loans to serve as Ginnie Mae collateral. Although interpretive rules are exempted from public comment under the Administrative Procedures Act, HUD is seeking public input on its interpretation of the loan-seasoning provision of the Economic Growth, Regulatory Relief, and Consumer Protection Act, which President Trump signed into law on May 24, 2018. Among other things, the statute prohibits Ginnie from guaranteeing payment on a security backed by a mortgage that does not meet its seasoning requirements. The protective measure was designed to deter lenders from encouraging veterans to refinance their loans often and repeatedly. Loan churning led to faster prepayment speeds on the ...

The CFPB recently dropped its RESPA-related investigation of Zillow, deciding not to bring enforcement charges against the online real estate database firm, according to a new public filing. At issue was Zillow’s co-marketing program, which allows real estate agents and lenders to advertise together on the firm’s website. As part of the launch, Zillow had boasted that its “premier agents” can invite lenders to share marketing costs. “Lenders get featured next to the agents on Zillow ...

The CFPB asked Citibank to pay $335 million to credit card customers who did not receive legally mandated interest rate reductions as part of a recent legal settlement, but the agency – interestingly – did not fine the bank for its misconduct. The bureau said it did not assess civil money penalties based on the fact that “Citibank self-identified and self-reported the violations to the bureau, and self-initiated remediation on affected consumers.” It’s not the first time the ...

CFPB Studies How Student Loan Borrowers Transition Out Of Debt. The CFPB recently issued a report on student loan payments and broader household borrowing. The report provides a close look at borrowers’ use of credit as they approach and make their final student loan payments and what follows in the months beyond. One key finding: Most borrowers pay off a student loan before the final installment is due, often with a single large payment. Further [Includes Four Briefs] ...

The issues behind the Department of Housing and Urban Development’s draft FHA condominium rules are “too complex” but lenders may expect a final rule in September, said HUD Secretary Ben Carson. Carson’s announcement of a release date for the long-anticipated condominium rules eases the mounting pressure on the secretary and the department to finalize the draft rules. On June 18, 54 senators and 120 members of the House signed a letter urging Carson to implement the changes in H.R. 3700, the Housing Opportunity Through Modernization Act, which would ease FHA requirements for financing condo purchases and refinancings. The bill was signed into law on July 29, 2016, and HUD published a proposed condo rule two months later. “We have been pushing it,” Carson said during a House committee oversight hearing this week. “It is a complex issue because when you are talking ...

Ginnie Mae will soon require issuers to undergo stress testing to see if they have the financial strength to withstand adverse circumstances or a severe economic downturn.The agency said it will soon begin phasing in stress testing, which would play a key role in issuer oversight and liquidity. The initiative is part of Ginnie’s effort to enhance the management of counterparty risk, one of the so-called three pillars of progress underlying the agency’s 2020 initiative. In addition to stronger risk management, the initiative aims to make significant technological improvements by 2020 and explore new opportunities to strengthen Ginnie’s MBS program. Issuers that meet the thresholds for required ratings will probably be the first ones to be stress tested, the agency said. Ginnie is also looking for ways to evaluate exposure to a single counterparty, relative to the counterparty’s financial health and the value of ...

Department of Housing and Urban Development Secretary Ben Carson reiterated concerns raised previously by his deputies regarding certain lending trends that could potentially endanger FHA’s financial health. Testifying during a HUD oversight hearing in the House Financial Services Committee this week, Carson said the department is scrutinizing certain policies that may be causing or contributing to the growth of cash-out transactions, unusually high debt-to-income ratios, serious loan delinquencies and early payment defaults. Carson said maintaining the health of the FHA mortgage insurance fund is critical in maintaining the agency as a source of credit for first time, low- and moderate-income, and minority homebuyers. The share of cash-out among all of FHA’s refinance transactions has increased to 60 percent as of April 2018 from 45 percent a year ago, he said. Also during that ...

A Trump administration plan to roll the U.S. Department of Agriculture’s rural housing loan guarantee and rental assistance programs into the Department of Housing and Urban Development should not be too difficult, said HUD’s top executive. Absorbing the USDA housing programs “would not be a very difficult shift” for the department, HUD Secretary Ben Carson said during testimony on Capitol Hill this week. The proposal is part of the administration’s plan to reform and reorganize federal agencies to cut costs, eliminate duplications and overlap, and streamline regulations. However, Rep. Kenneth Lucas, R-KY, worried that rural communities face challenges that are far different and beyond those faced by typical FHA or VA homebuyers, adding that many rural homes may not meet FHA standards. Industry observers noted that even though USDA has expanded its definition of “rural areas,” FHA’s authority ...