House Financial Services Committee Approves Flood Insurance Reform Measures.The House Financial Services Committee this week reported out several bills to reform and reauthorize the National Flood Insurance Program, which is set to expire on Sept. 20, 2017. The bills that passed included H.R. 2875, the National Flood Insurance Program Administrative Reform Act of 2017, which would protect taxpayers from program fraud and abuse; H.R. 1588, the Repeatedly Flooded Communities Preparation Act, which would ensure community accountability for areas frequently damaged by floods; and H.R. 1422, the Flood Insurance Market parity and Modernization Act, which would increase the availability of private flood insurance. The committee also approved H.R. 2246, the Taxpayer Exposure Mitigation Act of 2017, which would shift flood insurance risk for commercial and multifamily properties in ...

The Consumer Financial Protection Bureau’s integrated-disclosure rule has been in effect for more than 18 months now, and industry compliance professionals still have a number of questions in need of answers as they await the issuance of the so-called TRID 2.0 rule from the agency. The rule had been expected in the first quarter of 2017, but to date, not a peep has been uttered by the agency as to the cause of the delay or when lenders might expect the final rule. The Treasury Department recently issued...

In a new report mandated by the Trump administration, per Executive Order 13772, the Treasury Department slammed the CFPB on multiple counts and called for an overhaul on how the bureau is managed. The Treasury’s perspective was summed up succinctly: “The CFPB was created to pursue an important mission, but its unaccountable structure and unduly broad regulatory powers have led to regulatory abuses and excesses. The CFPB’s approach to enforcement and rulemaking has hindered consumer choice and access to credit, limited innovation, and imposed undue compliance burdens, particularly on small institutions.” The report then detailed a number of more specific criticisms, as follows. “The bureau’s structure renders it unaccountable to the American people,” it began. Also, the CFPB’s substantive authority ...

The American Bankers Association recently detailed a handful of major concerns it continues to have with the approach federal regulators take toward fair lending. The first such concern it listed in a new white paper sent to the Treasury Department is the expanded use of the disparate-impact concept. “Federal agencies responsible for ensuring compliance with national fair lending laws have in the last few years aggressively applied a controversial legal theory, disparate impact, to brand banks with violations of fair lending rules,” said the ABA. Under the disparate-impact theory, regulators rely heavily, sometimes solely, on statistical sketches to justify lawsuits or other enforcement actions, it added. “In doing so, since June 2015 they have largely ignored the analytical framework established ...

The information the CFPB collects and reports on consumer complaints offers lenders a tremendous resource in terms of abiding by the letter and the spirit of the bureau’s numerous rules, according to some top compliance professionals. “The CFPB’s annual report on complaints really is an incredible source of information,” said Barbara Boccia, senior director at Wolters Kluwer, during a presentation early last week at the American Bankers Association’s annual regulatory compliance conference in Orlando. “First, it really is a lot of information. Also, the way they structure the information that they receive is instructive,” she said. “You really want to make sure you are structuring your [complaint] information the same way, in terms of what they are looking at – for ...

One of the top concerns among compliance professionals is the seeming inevitable conflict that the CFPB’s amendments to its mortgage servicing rules will have with various state laws – in particular, the possibility that compliance with one may put the servicer out of compliance with the other. That was one of the key takeaways from a break-out session early last week at the American Bankers Association’s annual regulatory compliance conference in Orlando. “One issue that comes up fairly frequently has to do with what a servicer should do when there is a conflict between state and federal law. We’ve seen this come up especially when it comes to the various early intervention notices that servicers have to send to delinquent borrowers,” ...

Industry compliance officers, trade group representatives and legal experts at the American Bankers Association’s regulatory compliance conference, held in Orlando last week, expressed mixed sentiments about whether the CFPB ought to delay the effective date of the new requirements it is ushering in under the Home Mortgage Disclosure Act. They were responding to the suggestion of such a delay made by the Treasury Department in its recent report as per President Trump’s Executive Order 13772. “Obviously, a delay has to be for at least a year because the nature of HMDA is such that you can’t delay for six months,” Rodrigo Alba, the ABA’s senior vice president and senior regulatory counsel for mortgage finance, told an audience during a working ...

More than 68 percent of mortgage defects reported in 2016 involved TRID-related and/or loan package documentation issues, according to the latest mortgage quality control industry trends report from ACES Risk Management (ARMCO). “In 2016, the entire lending industry was impacted by the enhanced regulatory oversight of the CFPB as the long-awaited implementation of TRID was fully realized,” the report noted. “Many lenders spent the better part of the first quarter addressing the multitude of mistakes associated with TRID.” In some instances, this produced loans that could not be sold on the secondary market. “A wave of corrective action followed, and soon the sheer amount of resources directed at solving these issues became overwhelming for many lenders,” ARMCO added. The top...

Third-party oversight is becoming more of a focus of regulators these days, according to some top compliance professionals, and one of the most important emerging themes is an increasing regulatory emphasis on staff expertise. “This is something that [all the regulators] are thinking about,” Krista Shonk, vice president and senior regulatory counsel at the American Bankers Association, said during a presentation early last week at the ABA’s annual regulatory compliance conference in Orlando. Staff expertise includes things such as the ability to perform proper due diligence analysis and contract management and oversight.But personnel also need to avoid any attempts to transfer their institution’s inherent responsibility for compliance with laws and regulations. On the other hand, lenders should not put ...

There are three important trends in the consumer complaint space, each bearing important lessons for mortgage lenders, regardless of size or structure, according to top compliance experts. Speaking to an audience at the American Bankers Association’s annual regulatory compliance conference in Orlando earlier this week, Carol Hunley, deputy chief compliance officer at Ally Financial Services, detailed each of them and their significance for lender compliance. First, the lending environment is...