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Inside the CFPB

August 26, 2013

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Obama Presses Cordray, et al., For More Progress on Dodd-Frank

President Barack Obama met privately with CFPB Director Richard Cordray and other top financial regulatory officials last week in an effort to stimulate more progress in implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was enacted three years ago last month. According to various press accounts, the president’s biggest concern was reining in “too big to fail,” one area outside of the bureau’s bailiwick. Other officials in attendance included Treasury Secretary Jacob Lew and Federal Reserve Chairman... Read More

HUD Asks for Stay in Disparate Impact Case, Pending Mt. Holly

The Department of Housing and Urban Development, as expected, recently asked a federal district court in Washington, DC, to stay further proceedings in American Insurance Association vs. HUD, a disparate impact case, while the Supreme Court of the United States considers Township of Mount Holly v. Mt. Holly Gardens Citizens in Action. “In substance, Mount Holly presents the same issue of statutory interpretation that plaintiffs seek to litigate in the above-captioned action: namely, whether a disparate impact theory... Read More

CFPB Fires Back, Sues Morgan Drexen Debt Settlement Firm, CEO

The Consumer Financial Protection Bureau, just weeks after being sued by two targets of its crackdown on the debt relief industry, fired back at one of them, the Morgan Drexen firm, and its CEO, Walter Ledda, for allegedly charging more than 22,000 customers millions of dollars in illegal upfront fees to help resolve outstanding debts. According to the bureau, when consumers sign up for Morgan Drexen’s services, the company presents them with two contracts, one for debt-settlement services, and the other for bankruptcy-related... Read More

Bureau Finds Mortgage Servicing Problems at Banks, Nonbanks

Additional mortgage servicing rulemaking and perhaps even enforcement actions from the CFPB might be inevitable, now that the bureau has issued a report detailing a number of mortgage servicing problems at banks and nonbanks. “Our examinations of banks and nonbanks allow us to correct problems before more consumers are affected,” said CFPB Director Richard Cordray. The bureau’s new report, issued last week, “highlights both the mortgage servicing problems throughout the industry and the challenges of making sure that nonbanks are... Read More

With QM Around the Bend, FDIC To Meet on QRM, Risk Retention

With implementation of the CFPB’s ability-to-repay/qualified mortgage rule just a few months away, federal regulators are scheduled to meet in Washington, DC, later this week to discuss – and possibly vote on – a new version of a qualified residential mortgage/ risk retention proposal. The Federal Deposit Insurance Corp.’s board of directors is scheduled to meet in open session at 10 a.m. on Wednesday, Aug. 28, for renewed formal consideration of a QRM/credit risk retention proposal as mandated by the Dodd-Frank Wall Street Reform and... Read More

CFPB Again Updates Mortgage Examination Guidelines

The CFPB recently released a second update to its exam procedures associated with the new mortgage regulations issued in January 2013, with the intent of providing guidance to financial institutions and mortgage companies on what the bureau will be eyeballing as the rules become effective. The updates cover the ability-to-repay rule and qualified mortgages, high-cost mortgages, and appraisals for higher-priced mortgage loans, as well as new amendments related to the escrow rule. With this latest iteration, the exam procedures now... Read More

Bureau Updates Small Entity Compliance Guide for ATR, QM Rule

Earlier this month, the CFPB put out an updated small entity compliance guide for the ability-to-repay/qualified mortgage rule, incorporating clarifications and amendments to the rules issued on May 29, 2013, and July 10, 2013. The updated guide includes a handful of new sections, one of which goes into some detail about the exemptions that were added by the June 2013 concurrent final rule for certain creditors and loan programs, such as designated community development organizations, certain nonprofit organizations, and... Read More

Compliance Rep Details Best Practices for QM Implementation

The CFPB’s ability-to-repay rule and its qualified mortgage standard are getting closer every day, and best practices may provide the surest path to compliance. First off, if you haven’t started, start now. “There’s a lot to do, there’s a lot to know, and there’s a lot to sort out. So, go ahead and get started. It’s already August, and January will be here before we know it,” Ginger Moore, the compliance officer at PrimeLending, a top-25 mortgage originator based in Dallas, TX, told participants during a recent Inside Mortgage... Read More

‘Don’t Fake Your Rate When You Bake,’ Compliance Pro Warns

Tammy Butler, the director of fair lending and compliance for Optimal Blue, a leading pricing engine, said she’s been hearing from one attorney and industry consultant after another that the time of mortgage lenders naming their fees just to re‐name profit is not going to go over well with the CFPB. “In fact, those who have been through the exams or been fined have learned the hard way that complete transparency to the consumer is a must,” Butler said.For instance, Butler has heard some lenders plan on lumping a... Read More

PwC Offers Tips for Coping With New Error Notices, Info Requests

There are plenty of challenges associated with the CFPB’s new standards for error notices and information requests, which are part of the bureau’s new mortgage servicing standards, and policy analysts at PricewaterhouseCoopers have some compliance suggestions to help companies measure up. “The new standards for error notices and information requests are expected to have a substantial impact on all mortgage servicers,” the PwC analysts said in a recent overview. “Implementing the changes will require careful review and possibly... Read More

Study Suggests CFPB Pay More Attention to At-Risk Consumers

The CFPB may need to reach out more to consumers in areas that face the highest risk of foreclosure, and intensify pressure on lenders that serve older Americans, according to a new analysis of the CFPB’s consumer complaint database by a handful of faculty members at the Yale University School of Law. Analyzing a new data set of 110,000 consumer complaints lodged with the bureau, they found that Bank of America, Citibank and PNC Bank were “significantly less timely in responding to consumer complaints than the average financial... Read More

Worth Noting/Sneak Peak/Looking Ahead/Did You Know

Bureau to Evaluate Effect of Bundled Financial Products on Economically Vulnerable Consumers. Earlier this month, the CFPB published a notice and request for comment indicating it plans a data collection and review of bundled financial products and services in order to understand their effects on the financial decision-making of economically vulnerable consumers in the United States, especially as it relates to asset building and financial capability. Comments are invited on whether the collection of information is necessary for... Read More

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