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Inside the CFPB

May 30, 2016

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Life Under TRID: Mixed Signals on Whether CFPB is Examining for TRID Compliance

Maybe it’s just a matter of semantics. But mortgage lending trade group officials, industry attorneys and compliance professionals seem to be sending mixed signals as to whether the CFPB is now examining lenders for compliance with the controversial integrated disclosure rule, TRID. Rod Alba, senior vice president of mortgage markets, financial management and public policy for the American Bankers Association, told Inside the CFPB that his organization is not hearing that the bureau has started TRID compliance reviews. “Although our members report that examiners are inquiring about TRID implementations, and may be looking at one or another disclosure packet, they are generally assuring that the bank is engaged in active TRID implementation and trouble-shooting,” Alba said. “The banks we heard ... Read More

Consumer Complaints, Litigation Help Prompt CFPB Examinations

One of the biggest red flags that will bring CFPB examiners charging in a lender’s direction is the level of consumer criticisms lodged against a company, especially if the number of such gripes is disproportionately large, a top industry attorney reminded the industry recently. Addressing attendees earlier this month during a webinar sponsored by Inside Mortgage Finance, a sibling publication, Michelle Rogers, a partner in the BuckleySandler law firm office in Washington, DC, said, “If your complaints are anomalous in that they’re much higher than others in your industry – peers, folks of your size – you are more likely to get an exam than others. And so you want to make sure that you’re mitigating or addressing those issues.” And those ... Read More

Coordinated Exams Between CFPB, States Nearly Doubled Last Year

There was a significant increase last year in the number of coordinated examinations of non-bank financial services companies between the CFPB and state banking regulators. The number of such exams rose from nine in 2014 to 16 in 2015, the State Coordinating Committee of the Conference of State Bank Supervisors reported recently in its annual report. Examinations that are scheduled between the SCC and the CFPB are performed simultaneously between state regulators and the CFPB. The examinations involve coordinated planning, shared resources, concurrent onsite visits, and sharing of confidential and non-confidential supervisory information, including findings and reports of exam. The SCC also indicated there was “an expansion into new industry types as the CFPB established additional supervision authority by rule.” ... Read More

CFPB Fines, Bans Former Wells LO Over Mortgage ‘Fee Shifting’

The CFPB last week filed an administrative consent order against a former Wells Fargo employee, for running an alleged illegal mortgage “fee-shifting” scheme, fining him $85,000 and banning him from working in the mortgage industry for a year. The bureau accused David Eghbali, formerly a loan officer for the Wilshire Crescent Wells Fargo branch in Beverly Hills, CA, of referring a substantial number of loan closings to a single escrow company, New Millennium Escrow, Inc., which allegedly shifted its fees from some customers to others at his request. “While employed by Wells Fargo from November 2007 through July 2015, in connection with originating federally related mortgage loans to consumers primarily for personal, family or household purposes, respondent provided real-estate settlement ... Read More

New HMDA Rule Fails to Address Privacy Concerns, Attorney Says

The CFPB’s pending Home Mortgage Disclosure Act rule significantly expands the industry’s data-reporting requirements – and the risk of possible disclosure of a borrower’s personal information along with it – something the bureau still has not addressed to the industry’s satisfaction, according to one top attorney. “The implementation date of the rule is fast approaching and the mortgage industry still has not received any answers in regards to their data privacy concerns,” Craig Nazzaro, of counsel in the Atlanta office of the Baker Donelson law firm, said in a blog posting earlier this month. He noted that mortgage industry representatives have repeatedly raised their privacy concerns about the new rule with the bureau. However, “the CFPB has thus far avoided addressing these ... Read More

CFPB Bankruptcy Statement Report Incomplete, Testing Flawed

A handful of industry groups told the CFPB last week that the agency’s recent report on consumer testing of periodic statements for homeowners who have filed a bankruptcy petition is of limited usefulness without a full-fledged regulation to review at the same time. The testing itself was inadequate as well. “While we appreciate the opportunity to comment on the testing, we note that the statements have only limited meaning without their accompanying regulation,” said the Consumer Mortgage Coalition, the Credit Union National Association, and the National Association of Federal Credit Unions, in conjunction with the Mortgage Servicers Working Group. They said that, in several areas, they were unable to understand what the statements reflect because they did not have an ... Read More

Falling Mortgage Complaints Dropped to Third Place in April

Consumer complaints about their mortgages fell from the second-most complained about financial product or service in March, after debt collection, to third place in the CFPB’s monthly ranking for April. Credit reporting moved up into the second slot. The latest data show 7,300 consumer gripes to the CFPB last month, based on the bureau’s three-month rolling average. That was down 9 percent since the prior month. There were 4,587 consumer criticisms related to credit reporting in April, off 6 percent from March’s level.And mortgage-related kvetching dropped 12 percent, down to 4,347 notices. These three products accounted for about 68 percent of the 23,870 complaints submitted in April of this year. Elsewhere in the data mix, complaints about payday lending ... Read More

Former CFPB Official Still Sees Plenty of Challenges Ahead

The CFPB deserves a lot of credit for successfully taking on so many challenges simultaneously when it was created by the Dodd-Frank Act, a former bureau official said. Yet, numerous challenges continue to confront the bureau. “I think, from an accomplishment perspective, it’s been amazing for the bureau to be able to establish the infrastructure for a brand new federal agency at the same time that it’s been very active in evolving new rules and also pursuing supervision and enforcement and consumer response activities,” said Quyen Truong. She is a former assistant director and deputy general counsel of the CFPB from 2012-2016 (right after the Elizabeth Warren era), having joined Stroock & Stroock & Lavan LLP as a partner in ... Read More

Other News in Brief

More Gripes About TRID Dribble In. After what seemed like a lull in hearing complaints from lenders regarding the integrated disclosure rule known as TRID, the gripes are picking up again. At least that’s what we detected from some originators a few days ago. One loan broker who works the southern California market said she’s been telling some clients that it will take an extra seven days to close. “It was 15 before wholesale caught up, but now they’re behind again due to heavy sales volume.” Broker Slams Bureau’s Complaint Database. While he was running for a House seat in West Virginia, mortgage trade group president Marc Savitt was mostly quiet on issues tied to the CFPB. But now that ... Read More

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