A progressive group recently filed a lawsuit against the CFPB and the Office of Management and Budget for allegedly failing to provide records on Kathy Kraninger, President Trump’s nominee to become the next director of the CFPB. Allied Progress, a consumer watchdog, said in the lawsuit that it is suing to compel the agencies to respond to Freedom of Information Act requests for records associated with Kraninger. The lawsuit was filed in the U.S. District Court ...

The White House, according to industry insiders, has formed a small search team to help pick a successor to Federal Housing Finance Agency Director Mel Watt, whose tenure at the agency is imperiled because of recent sexual harassment allegations levied against him by an employee.Watt’s five-year term is scheduled to end in early January 2019, but it’s possible he might be forced from the position much sooner or decide to step down on his own. The 72-year-old regulator – a former Democratic Congressman from North Carolina – has declined to discuss the matter, but issued a statement through the FHFA’s public relations department saying he’s “confident that the investigation currently in progress will ...

Lenders will be asking the Department of Housing and Urban Development to clarify the eligibility of borrowers with deferred immigration status for an FHA-insured loan. A mortgage industry trade group is currently drafting a letter on “a series of technical FHA handbook recommendations,” including greater clarity on loan applications submitted by borrowers registered under the government’s Deferred Action for Childhood Arrivals (DACA) program. DACA status was offered to children who were brought illegally into the U.S. by their parents or guardians but have been in the country for most of their lives. The program was created by the Obama administration as a way for recipients to work legally in the country while Congress could agree on what to do with them. The program faces uncertainty after President Trump rescinded it in September last year as part of his administration’s zero-tolerance immigration ...

The U.S. District Court for the Southern District of Iowa earlier this month granted preliminary approval of an $11.2 million settlement in a proposed class-action against national bank JPMorgan Chase. According to the complaint filed in 2016, Chase charged and collected interest on FHA-insured loans that paid off early. Chase was either the lender or the servicer of the loans. The lawsuit, Audino et al. v. JPMorgan Chase Bank, alleges that the bank breached the promissory notes underlying the class’s FHA-insured home loans when it collected post-payment interest without providing disclosures to borrowers who made a prepayment inquiry, request for payoff figures, or tender of prepayment. Plaintiffs allege that the bank did not use the proper FHA form to provide the disclosures to consumers. Chase denies any wrongdoing and neither admits nor concedes any actual or potential fault or liability. The bank also denies it was ...

The CFPB recently fined Kansas-based National Credit Adjusters and its former chief executive $800,000 for illegal debt collection practices. The bureau originally ordered a $6 million civil money penalty but suspended most of it based on the financial condition of NCA and its former CEO. The CFPB said in a consent order that NCA and its former CEO, Bradley Hochstein, purchased consumer debt and used a network of debt collection companies that frequently ...

The controversial structure of the CFPB and its enforcement tactics will likely draw skeptical attention from the U.S. Supreme Court if President Trump’s pick, Brett Kavanaugh, is confirmed by the Senate, industry attorneys said. President Trump recently nominated Kavanaugh to replace Justice Anthony Kennedy, a moderate justice who has announced his retirement. Kavanaugh is a judge of the U.S. Court of Appeals for the District of Columbia Circuit with a pro-business ...

CFPB Joins Task Force on Market Integrity and Consumer Fraud. The CFPB recently joined a new Task Force on Market Integrity and Consumer Fraud, created by President Trump pursuant to an executive order. The task force is led by the Department of Justice, with the participation of the CFPB, the Securities and Exchange Commission, and the Federal Trade Commission. The task force will provide guidance for the investigation and prosecution of cases [Includes four briefs] ...

A federal court held this week that the single-director structure of the Federal Housing Finance Agency, headed by Director Mel Watt, violates the constitution. The ruling in Collins v. FHFA was handed down in Texas by a three judge-panel for the U.S. Court of Appeals for the Fifth Circuit. It represents the most recent major ruling in a number of Fannie Mae and Freddie Mac shareholder cases filed against the federal government. “We found, after an in-depth examination, that the FHFA is excessively insulated from executive branch influence and is, therefore, structured in violation of the Constitution,” the judges state in their 83-page ruling. And although Congress can create an independent agency, the court determined that elected officials cannot insulate...

The Royal Bank of Scotland last week announced a multi-million dollar settlement with the state of Illinois to resolve the bank’s alleged misconduct in its marketing and sale of risky MBS leading up to the 2008 financial crisis.

The U.S. Supreme Court is scheduled to hear a case that will determine whether non-judicial foreclosures are subject to protections provided by the Fair Debt Collection Practices Act. Lower courts have split on the issue, causing problems for servicers and borrowers.