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Inside the CFPB

August 14, 2006

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Hope High for Getting Anti-PL Bill in 2007

Stakeholders in federal anti-predatory lending legislation are shrugging off the announced departure of Rep. Bob Ney, R-OH, a principal in the legislative effort, citing some progress in talks concerning a possible compromise bill. Interest groups say there has been progress in the negotiations between Rep. Spencer Bachus, R-AL, chairman of the House Financial Services Subcommittee on Financial Institutions and Consumer Credit, and Democratic lawmakers in the last few months... Read More

Best Plan is to Nip Bad Proposals in the Bud

Compliance experts are urging Pennsylvania mortgage lenders, particularly those with no or low documentation lending programs, to comment on a notice of proposed rulemaking spelling out what constitutes “proper conduct” for state mortgage licensees. The best strategy for now is to make clear to state regulators the subjectivity of some of the proposed requirements, which could make compliance difficult for Pennsylvania licensees, according to Nanci Weissgold, a partner at the... Read More

Report Say New FACTA Rules Need Time to Improve Dispute Process

The Federal Reserve Board and the Federal Trade Commission last week urged Congress to delay any legislative action and give new statutory measures designed to improve the consumer dispute process a chance to work. In a joint report to Congress, the Fed and the FTC warned that any congressional action at this time would be premature. They said the measures imposed under the Fair and Accurate Credit Transactions Act should be... Read More

Preemption Extends to Second-Tier Op-Subs, Ability to Export Rates

Federal preemption of state laws is available to second-tier operating subsidiaries to the same extent as it is to federally chartered parent thrifts, according to a new interpretive opinion from the Office of Thrift Supervision. The opinion was issued July 20 in response to an inquiry by a thrift regarding a joint venture with a company that owned a mortgage banking subsidiary. The identities of the companies were withheld... Read More

4th Circuit Upholds Preemption of MD ARM Restrictions for Op-Subs

Maryland laws limiting prepayment penalties on adjustable-rate mortgages are preempted for operating subsidiaries of a national bank, according to the U.S. Court of Appeals for the 4th Circuit. In National City Bank of Indiana v. Turnbaugh, the bank and its operating subsidiaries National City Mortgage and First Franklin Financial Corp. sued in federal district court to prevent Maryland Commissioner of Financial Regulation Charles Turnbaugh from exercising his authority and enforcing state prepayment restrictions... Read More

CT Lenders can Lose License for Employees’ Action, Court Rules

Connecticut mortgage licensees are responsible for the acts of their employees and can lose their licensees even if they did not commit the act themselves, a state appellate court has ruled. In Cornelius v. Department of Banking, Frederick Cornelius, a licensed first and second mortgage broker doing business as Focus Mortgage, appealed a lower court dismissal of an earlier appeal of a department decision to pull his license and... Read More

Expert Recommends Strategies for Dealing with Cook County, IL, Pilot

Participants in a pilot program aimed at reducing foreclosures in Cook County, IL, are waiting for the program to kick in – with a great deal of trepidation. Despite industry warnings, not one of the unwilling participants – mortgage brokers, lenders, credit counselors, title insurers or closing agents – has left town yet or, in this case, abandoned the ZIP codes where they currently do business, according to one compliance expert... Read More

Borrower Education is Crucial in Understanding Nonprime Risks

Mortgage lenders at recent regulatory hearings on federal consumer protection statutes believe consumer protection in the nontraditional mortgage market can be strengthened by borrower education, not by requiring more disclosures. The Truth in Lending and Home Ownership and Equity Protection Act hearings hosted by the Federal Reserve Banks of San Francisco and Atlanta last month quickly turned to nontraditional mortgages and the benefits they provide, as well as the risks... Read More

State Roundup

Colorado, Wyoming. The Mountain States Better Business Bureau has issued a national warning on the growing incidence of “foreclosure rescue” scams. The Mountain States BBB is advising homeowners who are having difficulty making their monthly mortgage payments to inform their lenders and try to work out foreclosure issues. Senior citizens, unsophisticated, desperate homeowners, or families that have incurred huge... Read More

Federal Roundup

Federal Financial Institutions Examination Council CRA Data. Information on community development lending, small-business and small-farm lending in 2005 is now available at four FFIEC member agencies – Federal Reserve, Federal Deposit Insurance Co., Office of the Comptroller of the Currency, and Office of Thrift Supervision. The data is reported annually by certain commercial banks and thrifts in compliance with the Community Reinvestment Act. The 2005 CRA data comes with an electronic... Read More

Worth Noting…

The Office of the Comptroller of the Currency has named Richard Stearns as director for enforcement and compliance. He will also oversee the agency’s Law Department Division which investigates and recommends administrative actions, and litigates those enforcement actions on behalf of the OCC. Until he joined the OCC, Stearns was the deputy chief counsel for enforcement at the Office of Thrift Supervision... Read More

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