Federal Agencies

Browse articles from all of our Newsletters related to Federal Agencies.

September 20, 2018 - Inside Mortgage Finance

Mortgage Attorneys Embrace Clarity on Status of Regulatory Guidance, But Hope for More

Five regulators, including the Consumer Financial Protection Bureau, recently clarified that supervisory guidance is not regulation and won’t be the sole basis for enforcement actions. Industry attorneys said the statement would benefit the mortgage industry overall, but lenders still need more guidance to help with tricky compliance issues.


September 17, 2018 - Inside the CFPB

Other News in Brief: Model Disclosures; Bill on Guidance; Financial Well-being

CFPB Updates Model Disclosures Under Fair Credit Reporting Act . The CFPB last week issued an interim final rule updating two model disclosures to reflect changes made to the FCRA by the recent Dodd-Frank reform act.The Economic Growth, Regulatory Relief, and Consumer Protection Act, which became law in May, requires nationwide consumer reporting agencies to provide “national security freezes” free of charge to consumers. The [Includes three briefs] ...


September 17, 2018 - Inside the CFPB

CFPB Files First Ever Lawsuit Under Mulvaney, With Some Issues

Almost 10 months into Acting Director Mick Mulvaney’s tenure at the CFPB, the bureau filed its first new lawsuit. The CFPB last week filed charges against Future Income Payments (FIP), Irvine, CA, in federal district court in the Central District of California. The bureau alleged that FIP’s pension-advance products were loans with interest rates “that are substantially higher than credit card interest rates,” according to the complaint, which also names the company's owner ...


September 17, 2018 - Inside the CFPB

CFPB Struck on the CID Process, Hints Review of its Approach

A court panel recently declined to enforce a civil investigative demand issued by the CFPB because the language is too broad and generic. Attorneys said it was the second strike against the bureau for aggressive interpretation of its authority after the D.C. circuit ruled a CID invalid last year. A panel of the U.S. Court of Appeals for the Fifth Circuit held that a CID issued to Source for Public Data – a company that provides public records through an internet-based ...


September 17, 2018 - Inside the CFPB

Constitutionality Challenge Could Reach SCOTUS; Pending Nominee

A community bank in Texas and two DC-based nonprofit groups recently filed a petition with the U.S. Supreme Court challenging the constitutionality of the CFPB’s sole-director structure. The State National Bank of Big Spring, 60 Plus Association, and Competitive Enterprise Institution originally filed a lawsuit in 2012 in the U.S. District Court for the District of Columbia, alleging the CFPB’s structure violated the U.S. Constitution’s separation of powers. The district ...


September 17, 2018 - Inside the CFPB

What’s the Fate of ‘GSE Patch’ Under ATR Rule? Some Options

The CFPB should drop the current debt-to-income ratio cap and the so-called GSE patch from the qualified-mortgage definition, the Urban Institute recommends. The CFPB is required by statute to review the ability-to-repay rule, which includes the QM definition, and issue a final report on its findings by Jan. 10, 2019. One of the most important elements of the review could be the fate of the “GSE patch,” which is set to expire in January 2021, or on the day ...


September 17, 2018 - Inside the CFPB

Equifax Breach Happens a Year Ago, And What Has the CFPB Done?

A recent report by a government watchdog highlighted the actions taken by Equifax and the CFPB during the year since the public learned about the credit reporting agency’s serious data breach. The U.S. Government Accountability Office released a report on the Equifax data breach, describing in detail how hackers exploited vulnerabilities in the Equifax system to gain access to sensitive personal information for at least 145.5 million individuals. According to ...


September 17, 2018 - Inside the CFPB

Advisory Boards Back at CFPB, With New and Fewer Members

Three months after the CFPB fired all the members on its three advisory boards, the agency has reconstituted the panels with fewer members serving shorter terms. The CFPB recently announced nine members for the Consumer Advisory Board, down from 25 during former Director Richard Cordray’s tenure in the agency. Only one of nine comes from the consumer advocacy world – Liz Coyle, executive director at Georgia Watch, which describes itself ...


September 17, 2018 - Inside the CFPB

First Supervision Report Under Mulvaney: Loss Mitigation

The latest CFPB supervisory highlights report found violations in the loss mitigation process and some foreclosure practices which officials determined are unfair or deceptive acts or practices. The report released earlier this month is the first one since Acting CFPB Director Mick Mulvaney took the reins of the agency. The most recent supervisory highlights report was the summer 2017 edition issued a year ago. Attorneys said the report indicates that the supervisory ...


September 17, 2018 - Inside the CFPB

Supervisory Guidance Will Not Lead To Enforcement, Agencies Say

The CFPB, together with four other federal agencies, last week affirmed it will not take enforcement action based on supervisory guidance. The Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corp., National Credit Union Administration, Office of the Comptroller of the Currency and the CFPB said supervisory guidance does not have the force and effect of law and cannot lead to enforcement actions. “Examiners will not criticize a supervised ...


September 17, 2018 - Inside the CFPB

State AGs Urge CFPB to Continue The Use of Disparate Impact

Democratic state attorneys general recently vowed to fill the void of the CFPB in fair lending enforcement if the bureau decides not to use disparate-impact analysis under the Equal Credit Opportunity Act. “The attorneys general will not hesitate to uphold the law if CFPB acts in manner contrary to law with respect to interpreting ECOA or to fulfilling its Congressional charge to ensure nondiscriminatory lending to the residents of our states,” wrote 14 AGs in ...


September 17, 2018 - Inside the CFPB

CFPB Proposes Disclosure Sandbox, and More Could Come

The CFPB is creating a “disclosure sandbox” as its most recent step to encourage fintech innovation. Many are expecting the bureau to tackle the flawed no-action letter policy next. The CFPB recently published a revised policy for its trial disclosure program in the Federal Register. The new policy would streamline the application process, establish procedures for extending successful trial disclosure programs, and allow the CFPB to coordinate with sandbox ...


September 13, 2018 - Inside Mortgage Finance

CFPB Encourages Innovative Consumer Disclosure, Hints at More No-Action Letters in the Future

In the most recent step to encourage fintech innovation, the Consumer Financial Protection Bureau is retooling its policy to spur improved alternative consumer disclosures.


September 7, 2018 - Inside Nonconforming Markets

CFPB Urged to Drop DTI Ratio from QM Criteria

The Consumer Financial Protection Bureau should remove the cap on debt-to-income ratios that applies to certain qualified mortgages, according to a proposal by the Housing Finance Policy Center. Such a move could boost non-agency lending, according to industry analysts. The CFPB is currently assessing whether changes are needed for QM standards, including potentially addressing the so-called government-sponsored enterprise patch. The patch allows mortgages with DTI ratios ...


September 3, 2018 - Inside the CFPB

Other News in Brief: Fair Lending Symposium; CFPB Constitutionality; Consumer Credit Trends

The CFPB announced that it will hold a day-long symposium, “Building a Bridge to Credit Visibility,” to explore challenges many consumers face in getting credit. This event will take place on Sept. 17 in the CFPB’s Washington, DC, headquarters, and will be streamed live. The CFPB said the symposium “will convene a diverse set of stakeholders to explore challenges in overcoming barriers to expand fair, equitable, and non-discriminatory access to credit [Includes three briefs] ...


September 3, 2018 - Inside the CFPB

CFPB Refuses to Set Aside or Modify Civil Investigative Demand

The CFPB recently refused to set aside or modify a civil investigative demand filed against a debt collection company, the latest sign that the bureau is being tough in pursuing certain investigations, said attorneys.The CFPB filed two CIDs in 2017 under former Director Richard Cordray against Firstsource Advance regarding debt collection issues. The company then sought to set aside or modify the bureau’s second CID, but the agency denied the petition ...


September 3, 2018 - Inside the CFPB

CFPB Announces Annually Adjusted Dollar Amounts Under TILA

The CFPB late last month announced 2019 changes in dollar thresholds for several provisions under Regulation Z, implemented under the Truth in Lending Act. The bureau adjusts those amounts annually based on the percentage change reflected in the Consumer Price Index. The adjustments would affect the Credit Card Accountability Responsibility and Disclosure Act of 2009, the Home Ownership and Equity Protection Act and the ability to ...


September 3, 2018 - Inside the CFPB

Veteran Groups Urge Mulvaney to Keep MLA Examinations

Dozens of military and veteran groups are urging Acting CFPB Director Mick Mulvaney not to weaken military lending protections. Thirty-eight groups – including the National Military and Veteran Alliance, the Student Veterans of America, and the Air Force Sergeants Association – in late August sent a letter to Mulvaney and Defense Secretary James Mattis calling for continued strong enforcement and supervision of the Military Lending Act. “We urge you to stand with ...


September 3, 2018 - Inside the CFPB

Congressman: CFPB to Include Fintechs in Complaint Database

A Democratic lawmaker on the House Financial Services Committee is recommending that the CFPB include financial technology (fintech) companies in its complaint database to protect small business borrowers from discrimination. Rep. Emanuel Cleaver, D-MO, last year launched a survey to study the use of automated algorithms in loan applications in order to determine whether fintechs protect companies from unintentional discrimination. Many fintech lenders argue ...


September 3, 2018 - Inside the CFPB

Treasury Calls for Consistent Mortgage Servicing Regulations

The Department of Treasury has signaled that the CFPB should work with other federal agencies and state regulators to create consistent mortgage servicing regulations across the industry. In a recent report on nonbank issues, Treasury expressed its concern regarding inconsistency in mortgage servicing regulations that could create compliance headaches for residential loan processors while increasing costs. “In light of that, the CFPB is taking the lead ...


September 3, 2018 - Inside the CFPB

Kathy Kraninger, a Step Closer to Leading the CFPB

It’s just a matter of time, but it appears that Republican Kathy Kraninger, a career government worker, will become the next permanent director of the Consumer Financial Protection Bureau. In late August, the Senate Committee on Banking, Housing, and Urban Affairs approved Kraninger’s nomination by a party-line vote of 13 to 12. The approval, though close, was not a surprise. “There is nothing significantly controversial about her candidacy that will change ...


September 3, 2018 - Inside the CFPB

Bill to Expand Mortgage Access for ‘Gig’ Workers Introduced in Senate

Sens. Mark Warner, D-VA, and Mike Rounds, R-SD, in late August introduced bipartisan legislation amending the CFPB’s ability-to-repay rule to expand financing options for self-employed mortgage borrowers. The CFPB’s qualified-mortgage rules have relatively strict requirements which make it difficult for borrowers who don’t have traditional income sources to obtain mortgage credit. But the Self-Employed Mortgage Access Act of 2018 would expand ...


September 3, 2018 - Inside the CFPB

CFPB Clarifies HMDA Relief, Formal Rulemaking to Come Later

The CFPB late last week issued a rule to clarify partial HMDA exemptions for small financial institutions ushered in under the Dodd-Frank reform act. The Economic Growth, Regulatory Relief, and Consumer Protection Act, signed into law in May, exempts depositories – including credit unions – that originated fewer than 500 closed-end mortgages or 500 open-end lines of credit in each of the two preceding calendar years from certain expanded reporting ...


September 3, 2018 - Inside the CFPB

CFPB Student Loan Ombudsman Quits, Blames Mulvaney

A top CFPB official in charge of protecting student borrowers stepped down from the agency in late August, blaming the leadership of Acting Director Mick Mulvaney. Seth Frotman, who was the student loan ombudsman at the agency, said in his letter of resignation the current leadership of the bureau has “turned its back on young people and their financial futures.” He added: “The bureau is now content doing the bare minimum for [consumers] while simultaneously ...


September 3, 2018 - Inside the CFPB

Will CFPB Abandon or Limit the Use of Disparate Impact?

The CFPB in the Trump era is likely to abandon or limit the use of the disparate-impact theory in enforcing fair lending laws, said attorneys. “Given the lack of ‘effects’ language in [the Equal Credit Opportunity Act] and the [CFPB’s] stated focus on enforcing statutes as they are written, we expect that they will determine that ECOA does not support a disparate-impact theory,” said Jeffrey Naimon, a partner at Buckley Sandler. Under the disparate-impact theory ...


August 24, 2018 - Inside FHA/VA Lending

GNMA Closes Inquiry of Ocwen, Deems Regulatory Issues Resolved

Ocwen Financial Corporation is no longer in danger of losing its Ginnie Mae issuer status after the agency earlier this month officially announced its concerns over the specialty servicer’s problems with state regulators are resolved. Ocwen, a publicly traded Florida corporation, disclosed in a new filing that, based on information it provided to Ginnie Mae regarding the resolution of state cease-and-desist orders issued by a coalition of state banking regulators, the agency considers the issue to be concluded. In April last year, 30 state mortgage regulators issued cease-and-desist orders to prevent Ocwen from servicing loans within their jurisdictions. The servicer was accused of substandard loan servicing that violated state and applicable federal laws The orders generally prohibited Ocwen from acquiring new mortgage servicing rights, originating or acquiring new mortgage loans for which Ocwen would be the ...


August 23, 2018 - Inside Mortgage Finance

Kraninger’s CFPB Could be a Positive for the Industry if Her Nomination Clears Full Senate

The Senate Committee on Banking, Housing, and Urban Affairs Thursday morning approved the nomination of Kathy Kraninger to become chief of the Consumer Financial Protection Bureau.


August 20, 2018 - Inside the CFPB

Other News in Brief: HMDA Verification Tool; Mulvaney's Job Addresses; CFPB Reform

CFPB Announces HMDA File Format Verification Tool and New 2017 Dataset. The CFPB earlier this month released the 2018 File Format Verification Tool (FFVT) which tests whether HMDA reporters’ files meet certain formatting requirements needed to submit data to the HMDA platform. Specifically, the FFVT will test whether the file is pipe-delimited, has the proper number of data fields, and has data fields formatting as integers, where necessary ... [Includes three briefs]


August 20, 2018 - Inside the CFPB

Seventh Settlement: CFPB Fines Online Payday Lenders $69M

The CFPB recently imposed a $69 million judgement against two individuals and a group of payday lending entities controlled by them for cash-grab scams, although most of it will be waived. This is the seventh enforcement action brought by the CFPB so far this year, and also the third involving payday lenders. The U.S. District Court for the Western District of Missouri Western Division recently entered an order effectuating a settlement between the CFPB ...


August 20, 2018 - Inside the CFPB

CFPB Likely to Delay Payday Rule Compliance Date by Rulemaking

A federal court in Texas recently refused for the second time to delay the compliance date of the CFPB’s payday lending rule, which generally leaves the agency only one option to delay the date: through notice-and-comment rulemaking procedures. “There is a significant likelihood that the bureau might extend the compliance deadline” through rulemaking, said Quyen Truong, a partner at Stroock & Stroock & Lavan. Two payday lending trade groups earlier this year ...


August 20, 2018 - Inside the CFPB

CFPB Joins Global Fintech Network; OCC Fintech Charter Controversial

The CFPB recently joined with a group of foreign regulators to cooperate on the regulation of fintech, with the aim to facilitate responsible cross-border experimentation of new ideas. The group proposed to create the Global Financial Innovation Network to help new technology grow in a more relaxed regulatory environment worldwide. “The network will seek to provide a more efficient way for innovative firms to interact with regulators, helping them navigate ...


August 20, 2018 - Inside the CFPB

CFPB to Appeal the Ruling That Its Structure is Unconstitutional

The CFPB recently signaled it will seek to appeal the constitutionality ruling by a New York federal judge. The CFPB has filed a letter with Judge Loretta Preska of the U.S. District Court for the Southern District of New York, requesting the court to “enter a final judgement” in the RD Legal Funding case. If this request is granted, the CFPB will be able to appeal Preska’s ruling that the CFPB’s structure is unconstitutional to the U.S. Court of Appeals for the Second Circuit ...


August 20, 2018 - Inside the CFPB

CFPB Finalizes Exceptions on Sending Annual Privacy Notices

The CFPB recently finalized its proposed amendment to allow certain financial institutions to be exempt from sending annual privacy notices to their customers. The Gramm-Leach-Bliley Act generally requires financial institutions to provide customers with annual notices regarding their privacy policies. If the institution shares consumer information with third parties, the annual notice must provide customers with an opportunity to opt out of such sharing. The CFPB issued ...


August 20, 2018 - Inside the CFPB

State Regulators Adopt Uniform Single MLO Licensing Test

The Conference of State Bank Supervisors recently announced that all states and U.S. territories now use a single, common exam to assess mortgage loan originators. In the past, a mortgage license candidate would need to take the national exam and a separate test for each state license. Now, MLOs only need take a national test – the National SAFE MLO Test with Uniform State Content – to hold a license. State regulators started to test a uniform national exam five years ago ...


August 20, 2018 - Inside the CFPB

Senate Dems Want CFPB to Keep Military Lending Act Protections

All 49 Democratic senators last week signed a letter to Acting CFPB Director Mick Mulvaney, urging him to continue protecting servicemembers and their families under the Military Lending Act. The letter follows reports that Mulvaney plans to suspend examining lenders for MLA compliance. The senators called on Mulvaney not to halt military lending checks or take steps that would potentially harm servicemembers and their families. “The CFPB should not be abandoning ...


August 20, 2018 - Inside the CFPB

Senate Committee to Take a Vote on CFPB Nomination This Week

Kathy Kraninger’s nomination to head the CFPB is expected to be approved by the Senate Banking, Housing Urban Affairs Committee this week, but the outlook for a floor vote is iffy, said attorneys. The Senate banking panel has scheduled a vote on the Trump administration’s CFPB nominee for Aug. 23. The committee had delayed the vote earlier this month because of a short Senate summer recess. Despite the contentious confirmation hearing in ...


August 20, 2018 - Inside the CFPB

Will CFPB Do Less or More In Mortgage Servicing?

Experts disagree on whether the CFPB would pull back in the enforcement of mortgage servicing. Jaret Seiberg, a financial services and housing policy analyst for Cowen Washington Research Group, said there is a huge shift in regulating financial services since Republicans gained control of the White House. Loan servicers, particularly, could see “material differences” in the way federal agencies treat their businesses. “We have seen far less enforcement ...


August 20, 2018 - Inside the CFPB

States to Focus on Mortgage Servicing, Risks on Inconsistency

The state of Washington recently tightened its rules for mortgage servicers, another indicator that state regulators may pick up the slack from a perceived pullback by federal regulators regarding mortgage servicing. The Washington Department of Financial Institutions earlier this month amended its regulations under the Consumer Loan Act, requiring servicers to inform the DFI if the company’s capital falls below levels required by Fannie Mae or Freddie Mac, or if their ...


August 16, 2018 - Inside Mortgage Finance

State Agencies to Tighten Mortgage Servicing Rules, But CFPB May Not Scale Back Its Enforcement

Some states are gearing up to tighten their regulation of mortgage servicers to pick up the slack from a perceived pullback by federal regulators, although attorneys said the Consumer Financial Protection Bureau is still enforcing its servicing regulation.


Poll

Who "owns" the mortgage customer that’s brought to a wholesale lender through a loan broker?

The broker. It’s his/her client.
The wholesale/table funder. They’re taking the financial risk.
The broker, but only for the first year. After that, the borrower is fair game.
Hard to answer. It’s a complicated issue.

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