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Inside the CFPB

November 6, 2017

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Ocwen Requests Oral Arguments in CFPB Case, Sans Trump DOJ

Ocwen Financial appears to be just as mystified as anyone else when it comes to understanding why the Department of Justice has not weighed in on the company’s dispute with the CFPB, as it had been invited to do. But that hasn’t kept the nonbank mortgage servicer from asking the court to proceed with oral arguments. Late last month, Ocwen filed a supplemental motion with the U.S. District Court, Southern District of Florida, West Palm Beach Division, in favor of its earlier motion to dismiss the bureau’s complaint against it. The purpose of the motion is “to clarify the position of the United States [government] on the issue of plaintiff CFPB’s structural unconstitutionality, in light of the inaction of the ... Read More

Trump, Congress Rebuke Cordray, Overturn CFPB Arbitration Rule

Republican efforts to repeal and replace the Patient Protection Affordable Care Act may have faltered, but a GOP-controlled White House, Senate and House were able to unite and achieve at least one major accomplishment: they deep-sixed the CFPB’s controversial rule banning mandatory arbitration clauses in most consumer financial services contracts. Last week, President Trump turned aside an unusual personal appeal from CFPB Director Richard Cordray and went ahead and signed into law the joint resolution under the Congressional Review Act that permanently overturns the bureau’s problematic rule.Under the act, not only is the bureau’s rule now rendered null and void, any successor to Cordray will be unable to push through another substantially similar measure. That means only Congress can ... Read More

Industry Groups Celebrate Demise of CFPB Arbitration Rule

Industry representatives were pleased with the news that the Republican-controlled Congress and the Trump administration were able to cooperate and overturn the CFPB’s controversial rule banning mandatory arbitration clauses in most consumer financial services contracts. According to Consumer Bankers Association President and CEO Richard Hunt, “The CFPB’s rule was never about protecting consumers; rather, it was about protecting trial lawyers and their wallets,” he said. “The CFPB’s own study backs that up and proves trial lawyers would have been the real winners had this rule gone into effect.”Rob Nichols, president and CEO of the American Bankers Association, characterized the vote as a win for consumers. “As we and others made clear in our multiple comments to the CFPB, the ... Read More

Rep. Hensarling to Retire; Where Next? FHFA? CFPB?

House Financial Services Committee Chairman Jeb Hensarling, R-TX, surprised some in the nation’s capital last week by announcing he would not seek re-election when his term expires in 2018. Hensarling was already slated to surrender his chairmanship of the committee due to term limits, but he certainly had enough seniority to lay claim to another powerful position within the GOP leadership in the House. Instead, he opted to depart elected office entirely, citing a desire to spend more time with his family. The news immediately prompted speculation inside the Washington, DC, beltway about Hensarling’s next destination: at the helm of the Federal Housing Financial Agency or perhaps the CFPB? Jaret Seiberg, an analyst with the Cowen Washington Research Group, ... Read More

Industry Presses Lawmakers to Pass TRID Improvement Bill

Nearly two dozen mortgage industry groups wrote to members of the U.S. House of Representatives recently, urging them to support a bipartisan measure that would tweak the CFPB’s integrated disclosure rule to enable title insurers to disclose available discounts and accurate title insurance premiums to homebuyers. Currently, the bureau does not permit title insurance companies to disclose available discounts for lender’s title insurance on the government mandated disclosure forms. “This creates inconsistencies in mortgage documents and causes confusion for consumers,” said the industry organizations...H.R. 3978, the TRID Improvement Act of 2017, introduced last month by Reps. French Hill, R-AK, and Ruben Kihuen, D-NV, would end this confusion by amending the Real Estate Settlement Procedures Act to require the CFPB ... Read More

Groups Push Congress to Loosen ATR Rule’s Points-and-Fees Cap

Multiple industry trade groups recently wrote to every member of the U.S. House of Representatives to enact legislation that would loosen up the points-and-fees cap under the CFPB’s ability-to-repay rule and its qualified mortgage standard. At issue is the bipartisan H.R. 1153, the Mortgage Choice Act (not to be confused with the far more comprehensive, and controversial, Financial CHOICE Act). H.R. 1153 was introduced in February by Reps. Bill Huizenga, R-MI, Ed Royce, R-CA, Steve Stivers, R-OH, and David Joyce, R-OH, along with Gregory Meeks, D-NY, David Scott, D-GA, and Mike Doyle, D-PA. H.R. 1153 would revise the Truth in Lending Act Section 103(bb)(4) definition of points and fees to foster greater consumer choice in mortgage and settlement services under ... Read More

Special Counsel Clears Cordray of Election Law Violations

In response to allegations from Republicans that CFPB Director Richard Cordray may have violated federal election law by dipping his toes in the electoral waters of Ohio gubernatorial politics while still at the helm of the bureau, the U.S. Office of Special Counsel has investigated the nation’s top consumer regulator and cleared him of any wrongdoing. The disclosure was made in a letter sent last month by the special counsel to Cordray. “The U.S. Office of Special Counsel (OSC) completed its investigation into allegations that you violated the Hatch Act by being a candidate in the 2018 Ohio gubernatorial election while employed as the director of the CFPB,” said OSC Deputy Chief Erica Hamrick. “OSC found no evidence that you ... Read More

Compliance Pro IDs Major Issues, Concerns With New HMDA Rule

During the recent annual meeting of the Mortgage Bankers Association, a top compliance expert highlighted some of the biggest issues and concerns the industry faces under the new data collection and reporting regime ushered in by the CFPB’s updated Home Mortgage Disclosure Act rule. The short list of the most significant considerations, of course, includes the fair lending implications of the new requirements. Mitch Kider, chairman and managing partner of the Weiner Brodsky Kider PC law firm in Washington, DC, told attendees at one break-out session that HMDA data accuracy (or errors) sets the tone for an entire CFPB examination. “Most of the new data fields companies already have,” he said. “Do you know what story your data currently tells ... Read More

New HMDA Data Privacy Concerns Emerge in Wake of Data Breaches

The CFPB recently issued some proposed policy guidance for its Home Mortgage Disclosure Act rule that could help borrowers on the data privacy front, but it might not be enough, according to one compliance attorney. “On the heels of the Equifax data breach and continued cybersecurity threats, the CFPB’s guidance is a clear attempt to alleviate concerns regarding identity theft and information security,” Alexander Koskey, an associate in the Atlanta office of the Baker Donelson law firm, said in a recent client note. “However, significant privacy concerns persist that the increase in the amount of data that is being disclosed for the first time will make it easier to discover the identity of applicants and borrowers.”Additionally, given that the ... Read More

CSBS Frets CFPB Rule Threatens Relationship Lending Model

The Conference of State Bank Supervisors recently told the CFPB it is concerned that a rule expected from the bureau could erode the relationship lending model that community banks use with small businesses. “The proposed new data collection requirements will require lenders to compile and report a variety of data points regarding small business applications and loans,” the state regulators said in a recent comment letter to the bureau. “At a minimum, these new data collection requirements will impose additional and disproportionate compliance costs on smaller financial institutions with limited resources and unnecessarily raise the cost of originating small business loans by all lenders.” According to the CSBS, community banks exercise a substantial amount of discretion and expertise in the ... Read More

Other News in Brief/Provident, Ocwen, HMDA, Winter Park National

African-American and Hispanic Borrowers Allegedly Harmed by Provident Will Receive $9 Million in Compensation. Last week, Garden City Group, the settlement administrator for Provident Funding Associates, mailed out checks to African-American and Hispanic borrowers to compensate them for having been unlawfully charged higher interest or broker fees on their mortgages from Provident.... Ocwen Enters Into Agreement with Hawaii to Resolve Regulatory Action. Ocwen Financial settled some outstanding issues with regulatory authorities in Hawaii last week, continuing a streak the nonbank servicer has been on for the last two months or so.... Read More

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