JPMorgan Chase Bank last week agreed to a $53 million settlement with the U.S. Attorney for the Southern District of New York, bringing to a close allegations of discriminatory lending against minority borrowers through its wholesale-broker channel in violation of the Equal Credit Opportunity Act and the Fair Housing Act. According to the consent order, prior to January 2006 and continuing until early 2009, Chase originated and funded residential mortgage loans through a wholesale channel. “Applications for these loans were brought to Chase by thousands of independent mortgage brokers throughout the United States who had entered into contracts with Chase for the purpose of bringing mortgage loan applications to it for origination and funding.” Also, from 2006 to 2009, approximately ...

Putting in place a successor-in-interest confirmation process that complies with the CFPB’s updated mortgage servicing rules is going to be a big hurdle for mortgage servicers to overcome, according to attorneys with the Bradley law firm. “Arguably the most significant element of the recent amendments to the existing mortgage servicing regulatory framework by the CFPB is the new structure that has been laid out for dealing with potential and confirmed successors in interest,” the attorneys said in a recent online blog post.As they see it, fully complying with the new rule is going to require a significant amount of institutional exertion, no matter a servicer’s size. “One of the more time-intensive – and therefore costly – aspects of the rule is ...

OCC Revises CRA Asset Thresholds for Small and Intermediate Small Banks and Savings Associations. Earlier this month, the Office of the Comptroller of the Currency revised the asset-size threshold amounts used to define “small bank,” “small savings association,” “intermediate small bank,” and “intermediate small savings association” under the Community Reinvestment Act. ... OCC Adjusts Civil Money Penalties for Inflation. Late last week, the Office of the Comptroller of the Currency announced it was adjusting the maximum amount of each civil money penalty within its jurisdiction. ...

The CFPB Office of Inspector General recently initiated an evaluation of the bureau’s use of vendors to support its analysis of fair lending compliance, the OIG indicated in its latest work plan. The OIG begins by noting, among other responsibilities, the CFPB is charged with providing oversight and enforcement of federal laws intended to ensure the fair, equitable and nondiscriminatory access to credit. But what may surprise many in the industry is to learn that the agency relies on external vendors to help fulfill this responsibility. “Our objective is to assess whether the CFPB effectively mitigates the risk associated with the use of vendors to support fair lending analysis, particularly with respect to potential conflicts of interest,” said the OIG ...

After a two-year rollercoaster ride through the court system that ended in 2015, a former Wall Street trader finds himself facing another trial in an MBS fraud case. Jess Litvak, a former bond trader with the Jeffries Group, will go on trial again after a jury found him guilty in 2014 of violating securities laws. He was accused of fraud and misleading investors about the price he had paid for residential MBS. According to attorneys with the law firm of Shepherd Smith Edwards & Kantas in Houston, the U.S. Attorney’s Office in Connecticut originally brought...

Late last week, the District of Columbia Court of Appeals disregarded the objections of the CFPB and gave PHH Corp. permission to respond to the federal government’s arguments in support of en banc review of the court’s earlier three-judge panel decision.“Upon consideration of petitioners’ motion for leave to file a supplemental response to petition for rehearing en banc, the opposition thereto, and the reply, it is ordered that the motion be granted,” 11 of the 12 judges wrote in an order issued Jan. 13. PHH’s supplemental response is due Jan. 27, 2017, and is not to exceed 15 pages. Back in October, the three Republican appointees ruled that the CFPB’s leadership structure involving a single director who can be ...

While many in the mortgage industry wait for the District of Columbia Circuit Court of Appeals to decide whether to rehear the arguments of the CFPB in its wrangling with PHH, the plaintiffs in State National Bank of Big Spring, Texas, et al. v. Lew, et al. have stepped back onto the legal stage at the district court level. Specifically, “Plaintiffs respectfully move [the U.S. District Court for the District of Columbia] to hold a status conference at its earliest convenience to determine how this case ... can be most efficiently adjudicated in light of the CFPB’s petition for en banc review of the panel decision in PHH Corp. v. CFPB,” State National Bank and its parties asked the appeals ...

The U.S. Department of Justice recently reached a settlement with two jointly owned but independently operated banks in Ohio, Union Savings Bank and Guardian Savings Bank, resolving allegations that the pair engaged in a pattern or practice of redlining predominantly African-American neighborhoods in and around the Ohio cities of Cincinnati, Columbus and Dayton, as well as in Indianapolis. According to the government’s complaint, Union (with $2.7 billion in assets and 29 branches) and Guardian (with $861 million in assets and 11 branches) violated the Fair Housing Act and the Equal Credit Opportunity Act, which prohibit financial institutions from discriminating on the basis of race and color in their mortgage lending practices. The Justice Department alleges that, from at least 2010 ...

Bureau Mulling Possible Changes to HMDA Resubmission Guidelines. It’s been roughly one year since the CFPB issued a request for information regarding Home Mortgage Disclosure Act resubmission guidelines, and the bureau has yet to decide which way to proceed. The agency received 31 comments in response to the RFI, which was published Jan. 12, 2016, in the Federal Register. Commenters included HMDA reporters, industry trade groups, and consumer groups.... Revisions to Interagency Compliance Rating System Still Pending. The CFPB and the other members of the FFIEC continue to review public comments on their April 29, 2016, proposal to revise the existing Uniform Interagency Consumer Compliance Rating System to reflect regulatory, supervisory, technological, and market changes since the system was established....

The Office of the Comptroller of the Currency recently fined HSBC $32.5 million for failure to correct faulty foreclosure practices in a timely manner as per a consent order originally issued back in 2011 to correct practices that harmed borrowers in the wake of the housing market’s collapse. The OCC also said the institution failed to file payment change notices (PCN) that complied with bankruptcy rules, which resulted in roughly $3.5 million in borrower remediation for approximately 1,700 mortgage loan accounts. “The bank’s untimely and missed PCN filing practices did not comply with bankruptcy rules, required the bank to undertake operational enhancements to achieve compliance, and were unsafe and unsound practices,” according to the consent order. The bank neither admitted ...