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Inside the CFPB

August 6, 2012

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CFPB Defends Size of Disclosure Proposal

The Consumer Financial Protection Bureau has been feeling the heat over the size of its proposed rule to streamline and integrate the disclosures consumers get when taking out a home loan, so agency officials engaged in a little bit of push-back last week in an effort to fend off the criticism. The push-back started early in the week during a hearing of the House Small Business Committee, during which Rep. Scott Tipton, R-CO, took issue with the rulemaking’s size that exceeded 1,000 pages in draft form, a fraction of which is new... Read More

CFPB Takes on Mortgage Assistance Firm

The Consumer Financial Protection Bureau initiated its first enforcement action last month, filing a sealed complaint in federal court in California against an attorney and affiliated partners and companies that offered loan modification and foreclosure relief services to struggling homeowners. The bureau’s complaint alleges that defendant Chance Edward Gordon, some of his colleagues and related companies in the Los Angeles area, deceived consumers with false promises of obtaining loan modifications in exchange for... Read More

Avoid Unintended Consequences With MLO Rule, Industry Says

A handful of mortgage lending industry trade groups have written the Consumer Financial Protection Bureau with several recommendations to help the bureau avoid unintended consequences in its upcoming rulemaking on mortgage‐loan originator compensation, as per the Dodd-Frank Wall Street Reform and Consumer Protection Act. To begin with, the American Bankers Association, the American Financial Services Association, the Consumer Mortgage Coalition and the Independent Community Bankers of America encouraged the CFPB to... Read More

Lending Groups Split on CFPB Rule on Nonbank Supervision

The American Bankers Association and the Conference of State Bank Supervisors both told the Consumer Financial Protection Bureau they support the CFPB’s proposed rule on nonbank supervision, albeit from different perspectives. The ABA “supports the proposed procedures that will subject to the bureau’s supervisory authority even the smallest competitors who choose not to follow existing laws and regulations and are engaged in conduct that poses risk to consumers,” the group said. Moreover, the ABA said, it believes that the... Read More

Compliance Management Systems Critical to Success With CFPB

For nonbank mortgage lenders, a good compliance management system may well be the difference between success and failure when it comes to dealing with the new sheriff in town, the Consumer Financial Protection Bureau, two key presenters told attendees of a webinar sponsored last week by Inside Mortgage Finance, an affiliated publication. Allison Brown, the program manager for mortgage supervision within the office of nonbank supervision at the CFPB, put it this way: A good compliance management system is “really all... Read More

Mortgage Issues Dominate CFPB Consumer Complaint Portal

Mortgage issues far and away made up the bulk of the complaints consumers filed with the Consumer Financial Protection Bureau over the last year, according to the agency’s semi-annual report to Congress, which was released last week. Mortgage issues made up 43 percent of the roughly 55,300 consumer complaints the CFPB has received between July 21, 2011, and June 30, 2012. … Read More

Full Court Press Continues for Broad Definition of a “QM”

U.S. Sens. Roy Blunt, R-MO, Jerry Moran, R-KS and Mark Begich, D-AK, wrote Consumer Financial Protection Bureau Director Richard Cordray late last week, urging the regulator to include a broad definition of “qualified mortgage” – and a true legal safe harbor for conforming loans – in the bureau’s forthcoming ability-to-repay rules. “These rules will have a dramatic impact on the mortgage market, and if drafted too narrowly could severely restrict access to mortgage credit,” the trio wrote. “To prevent these unintended consequences... Read More

CFPB Probing Private Mortgage Insurance Arena for Kickbacks

American International Group, MGIC Investment, Genworth Financial and Radian Group have been served with subpoenas by the Consumer Financial Protection Bureau, the firms said in public filings last week, as the bureau is apparently probing to determine if the mortgage insurance companies transferred billions in M.I. premiums to the banks that made the mortgages. PHH Corp. made a similar disclosure back in January. The CFPB’s subpoenas, known as Civil Investigative Demands, indicate that the bureau’s enforcement... Read More

Capital One Settles with DOJ, OCC Over Alleged SCRA Violations

Last week, the Office of the Comptroller of the Currency and the Department of Justice announced a $12 million settlement that resolves legal and regulatory actions brought against Capital One for alleged violations of the Servicemembers Civil Relief Act, including foreclosing without a court order. The agreement requires Capital One to pay approximately $7 million in damages to service members for SCRA violations, including at least $125,000 in compensation plus compensation for any lost equity (with interest) to each service... Read More

State Roundup

Hawaii. Last month, the state Department of Commerce and Consumer Affairs announced a transition period for certain mortgage loan originator companies (MLOCs) to comply with recently enacted mortgage loan originator (MLO) licensing requirements. Retroactively effective as of July 1, 2012, all exempt registered MLOs and MLOCs of a subsidiary of an insured depository institution regulated by a federal banking agency must be licensed under the state’s SAFE Act. Affected MLOs may continue to originate mortgage loans… Read More

Federal Roundup

Consumer Financial Protection Bureau. Privileged Information Rule Now Effective. The Consumer Financial Protection Bureau’s final rule on the confidential treatment of privileged information becomes effective Monday, Aug. 6, 2012. The rule makes clear that an institution that provides privileged information to the CFPB does not waive any privilege it may have related to third parties, and that bureau sharing of privileged information to another federal or state government agency does not waive any privilege that might apply... Read More

Worth Noting

Inside Mortgage Finance Publications’ latest website poll doesn’t show a lot of optimism about the Consumer Financial Protection Bureau and its potential effectiveness. The poll began by noting that the CFPB recently passed its one-year anniversary as an up-and-running federal regulator. Respondents then were asked: Do you think the CFPB has done a good job so far? A whopping 52 percent choose the option that read: “I don’t think the CFPB will ever do a good job given its mandate to protect consumers even if it means crippling the... Read More

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