The total amount of principal reduction and refinancing provided by banks for consumer relief under the landmark $25 billion national servicing agreement far exceeded what was required in the agreement, according to final credit reports filed by settlement monitor Joseph Smith. Filed with the U.S. District Court for the District of Columbia this week, the reports confirmed that Wells Fargo, Bank of America, JPMorgan Chase, CitiBank and Ally have met their consumer relief and restructuring obligations under the settlement. In total, the five companies provided...

Rep. Jeb Hensarling, R-TX, chairman of the House Financial Services Committee, recently threatened to subpoena the CFPB to supply information on the bureau’s indirect auto lending guidance and the methodology it uses in determining whether fair lending violations exist in that space. “By refusing to disclose this information, the bureau has deliberately deprived indirect auto lenders of any meaningful way to tailor their company’s lending practices and compliance systems so as to mitigate or eliminate the fair lending risk the bureau asserts to be present,” Hensarling said in a recent letter to CFPB Director Richard Cordray.

Lender representatives privately enjoyed a bit of disparate impact schadenfreude last week when accounts surfaced in the news media that the CFPB’s own internal employee evaluations demonstrated sharp racial disparities. Citing confidential agency data it obtained, American Banker reported that the bureau’s own managers have shown distinctly different patterns in how they rate employees of different races, with white employees ranking distinctly better than minorities in performance reviews used to grant raises and bonuses. Overall, whites were twice as likely to receive the agency’s top grade last year than were African-American or Hispanic employees, the newspaper said.

CFPB Deputy Director Steve Antonakes isn’t toning down his antagonistic stance towards mortgage servicers. Speaking at the National Community Reinvestment Coalition Annual Conference in Washington, DC, last week, Antonakes rattled the bureau’s sabre at the market sector again, saying, “We expect servicers to pay exceptionally close attention to servicing transfers and they should understand that we will as well. “Servicing transfers where the new servicers are not honoring existing permanent or trial loan modifications will not be tolerated,” he added. “Struggling borrowers being told to pay incorrect higher amounts because of the failure to honor an in-process loan modification – and then being punished with foreclosure for their inability to pay the incorrect amounts – will not be tolerated.”

World Acceptance Corp., one of the largest small-loan lenders in the U.S., received a civil investigative demand from the CFPB last week, the company disclosed in a filing with the Securities and Exchange Commission. The CID states, in part, that “[t]he purpose of this investigation is to determine whether finance companies or other unnamed persons have been or are engaging in unlawful acts or practices in connection with the marketing, offering or extension of credit ….” The probe is also being undertaken “to determine whether bureau action to obtain legal or equitable relief would be in the public interest,” the filing said.

Coping with the potential for fair lending violations in the new qualified-mortgage world is a source of high anxiety for many compliance professionals in mortgage finance. But Gregory Imm, chief compliance officer and director of community affairs and fair lending and responsible banking at Fifth Third Bank, recently shared some lesser-known considerations that should increase industry representatives’ confidence in their compliance and readiness. Speaking to participants in a recent webinar sponsored by Inside Mortgage Finance, an affiliated publication, Imm said the first area is measurement. “Institutions need to establish key performance risk indicators of what should be measured, and not what is convenient to measure,” he said. “I say ‘convenient’ because those are the activities that are easy to measure because you have the data at your fingertips.”

Three lender-related trade groups told the CFPB they are opposed to the wholesale extension of the Fair Debt Collection Practices Act to first-party creditors using the bureau’s rulemaking authority to prohibit unfair, deceptive or abusive acts and practices. Commenting on the bureau’s advance notice of proposed rulemaking on debt collection practices, the American Bankers Association, the Consumer Bankers Association, and the Financial Services Roundtable said they support the CFPB’s decision to initiate a rulemaking in the space, given the massive consumer debt market now stands at $11.8 trillion and the importance debt collection has for credit availability.

The U.S. Supreme Court has added two more lawsuits to its growing list of securities cases by agreeing to take up an IndyMac MBS suit. In Public Employees’ Retirement System of Mississippi v. IndyMac MBS Inc. et al, SCOTUS has agreed to consider whether the filing of a class-action lawsuit tolls the three-year statute of repose under the Securities Act of 1933 or whether the statute is an absolute bar that cannot be suspended. Like a statute of limitations, a statute of repose cuts off...

Penalties in legislation that would restrict the use of eminent domain to resolve foreclosure problems could cripple state and local governments financially and provide no relief to property owners, warned the bill’s critics. H.R. 1944, the Private Rights Protection Act, would prohibit city and county governments that get federal funding for economic development from using their eminent domain powers to seize underwater mortgage notes from investors and unilaterally restructure the loans before selling them to other investors. Violators would be ineligible for federal economic development funds for two fiscal years following a court’s finding of guilt. The bill also provides the attorney general with broader enforcement authority. The necessity for legislation arose in the wake of efforts last year by certain municipalities in California to ...

The Chinese Year of the Horse welcomed the FHA with a hard kick in the head as total originations fell 20 percent in January from December 2013. Even as rising interest rates slowed refinancing activity last year, the expected increase in purchase-mortgage lending barely materialized and, in fact, appears to be dropping off. Lenders reported $8.7 billion in new originations in January, down from $10.9 billion in December and $23.7 billion from a year ago. Most were fixed-rate mortgages and 77.1 percent were purchase transactions. Three of the top five FHA lenders – Quicken Loans, JPMorgan Chase and LoanDepot – reported purchase origination totals below 40 percent. Top-ranked Wells Fargo and Bank of America each reported 64.0 percent of total FHA originations as purchase transactions. Wells Fargo closed the month with $519.0 million despite a ... [2 charts]