In response to the CFPB’s draft “scorecard” for safe financial products to be offered on college campuses, two lender trade groups said that colleges should be able to work with banks to offer a flexible array of deposit products to their students and not be pigeon-holed into just one approach. In a joint comment letter to the CFPB, the American Bankers Association and the Consumer Bankers Association said they strongly support transparency and strong protections for consumers when using any financial service and will continue to work with the bureau to achieve that goal. “However, the proposed scorecard appears singularly focused on driving colleges and universities into limiting insured depository institutions to offering a particular type of deposit program with ...

Consumer complaints to the CFPB fell in most financial service product segments during the first quarter, not only from the previous quarter but also from one year ago, according to the latest analysis of bureau data by Inside the CFPB. Total gripes in the first quarter of 2015 declined 8.2 percent from the fourth quarter of 2014, and slid 17.0 percent compared to the first quarter of 2014. Once again, consumer criticisms about residential mortgages led the decline in both timeframes, dropping 20.3 percent quarter over quarter and plunging 33.5 percent year over year. The fall-off is likely due to the shrinkage in overall mortgage originations as well as the continued recovery in the overall housing and mortgage markets.The [with exclusive data chart] ...

Commercial banks and thrifts reported another decline in their ABS holdings during the fourth quarter of 2014, according to a new Inside MBS & ABS analysis of call-report data. In aggregate, banks and thrifts held $159.22 billion of ABS in their held-to-maturity and available-for-sale retained portfolios as of the end of last year. That was the industry’s lowest level of ABS investment since the middle of 2012, and it represented a 3.1 percent drop from a revised third-quarter total of $164.35 billion. The biggest component in the aggregate portfolio was...[Includes two data charts]

Walter Reports a $44 Million Loss, Cites a Pending Settlement with the CFPB. Walter Investment Management Corp., which owns the nation’s eighth-largest residential servicer, reported a $44 million loss for the fourth quarter, citing – among other things – a pending settlement with the CFPB and the Federal Trade Commission. “We have agreed to a proposed stipulated order with the FTC and CFPB, which is subject to approval by the FTC, CFPB and the court, and expect the settlement approval process may take a month or two,” the company noted in its fourth quarter 2014 earnings release. “We believe the proposed settlement is in the best interest of our business and all stakeholders.” This past October, Walter disclosed in a regulatory filing ...

What started as an alternative to investing in certificates of deposit has attracted interest from institutional investors and even some ABS issuance. Marketplace lending, also known as peer-to-peer lending, has strong growth prospects, according to industry analysts. Eric Rapp, a senior vice president at DBRS, estimated that $9.0 billion in marketplace loans were originated in 2014, including personal loans and financing for small business, students and real estate. “It’s still relatively small, but it’s got a fast growth trend,” he said late last week during a teleconference hosted by DBRS. Rapp said...

Rep. Waters Wants Clarity on Corinthian Student Loan Refunds. House Financial Services Committee Ranking Member Maxine Waters, D-CA, wants more clarity about the recent agreement to provide $480 million in financial relief to students wrestling with predatory loans from now-defunct Corinthian Colleges. In letters to CFPB Director Richard Cordray and David Hawn, president and CEO of Education Credit Management Group, the company that acquired a majority of the college’s campuses, Waters said, “[A]s you both well know, the student loan servicing industry, much like the mortgage servicing industry, has often worked as a disservice to its customers. “Furthermore, students who are to receive private debt relief were intentionally misled when the debt was incurred, and there is undoubtedly confusion among ...

Standard & Poor’s emerged as the top rating service in both non-agency MBS and non-mortgage ABS securitizations in 2014, according to a new Inside MBS & ABS ranking. S&P rated $8.91 billion of non-agency MBS last year, or 25.4 percent of total issuance. Rating information is not available on most scratch-and-dent transactions and re-securitizations that are typically issued as private placements. S&P’s market share was down from 40.0 percent of non-agency MBS issued in 2013, when there were more transactions with multiple ratings. DBRS, which reports its ratings on re-securitizations, actually was involved...[Includes two data charts]

Numerous current and former heavily indebted student borrowers who attended schools previously owned by Corinthian Colleges will see the outstanding amount they owe reduced by 40 percent, under the terms of a deal struck by the CFPB, the Department of Education and ECMC Group, the new owner of a number of the schools. The total debt relief amounts to $480 million. Back in September, the CFPB sued Corinthian Colleges Inc. for allegedly luring tens of thousands of students to take out private loans, known as “Genesis loans,” to cover expensive tuition costs by advertising bogus job prospects and career services. The bureau also alleged that Corinthian used illegal debt collection tactics to strong-arm students into paying back those loans while ...

In an effort to help indebted students as they move into the workforce, the CFPB joined other federal regulators recently in issuing guidance on private student loans with graduated repayment terms at loan origination. “Financial institutions that originate private student loans may offer graduated repayment terms in addition to fixed amortizing terms to borrowers at the time of loan origination,” the guidance stated.Graduated repayment terms provide lower initial monthly payments early in the repayment period and phase in the amortization of the principal balance, it noted. “Graduated repayment terms may align a borrower’s income level with loan repayment requirements, provide flexibility to repay the debt sooner if a borrower’s income increases more quickly than projected, and may help long- ...

The CFPB recently sent letters to select private student loan lenders and servicers inquiring about their current and planned loan modification options. The letter is a follow-up to a meeting last year convened by CFPB Director Richard Cordray and Education Secretary Arne Duncan to discuss ways for industry participants to offer more options, such as modified repayment plans, to help borrowers avoid default and increase the likelihood of full repayment. Federal financial regulators have offered repeated guidance encouraging industry to pursue these workout arrangements, and they have noted that they will not criticize financial institutions even if these loan modifications lead to adverse credit classifications, CFPB Student Loan Ombudsman Rohit Chopra said in the correspondence. “While certain market participants have ...