The latest speculation inside the Washington, DC, beltway related to the departure of CFPB Director Richard Cordray is that he may resign sometime during the fourth quarter in order to run for governor of Ohio. But whether he leaves in the fourth quarter of 2017, or the first quarter of 2018, or he waits until his term expires in July of next year, one thing is certain: he will nevertheless be gone in just over a year’s time. That means President Trump will name his replacement. But who will that be? Will Trump tap avowed CFPB-killer House Financial Services Committee Chairman Jeb Hensarling, R-TX? Or perhaps Spencer Bachus, R-AL, the former head of the HFSC? What about Sen. Mike Crapo ...
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A representative of the Conference of State Bank Supervisors testified before the U.S. Congress recently, telling lawmakers that smaller financial institutions can’t engage in as much residential mortgage lending activity as they otherwise would because of the growing reporting requirements under the Home Mortgage Disclosure Act, as well as the CFPB’s ability-to-repay/qualified mortgage rule. In his testimony before the Senate Banking, Housing and Urban Affairs Committee, Charles Cooper, commissioner of the Texas Banking Department and immediate past chairman of CSBS, said the CFPB’s recent expansion of HMDA reporting requirements has placed a disproportionate burden on smaller and less complex institutions, potentially restricting mortgage lending as well. “In 2018, the number of data points required to comply with HMDA reporting standards ...
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One emerging issue identified by state mortgage regulators over the last year has to do with the Home Mortgage Disclosure Act, according to a new report issued by the Multistate Mortgage Committee.Specifically, MMC examination teams found numerous data discrepancies in the Loan Application Register (LAR) submissions, when compared to the data contained in the reportable loan files. “Within the review process, examiners seek to validate the accuracy of the LAR data submitted to meet the requirements of HMDA, and in multiple instances it was determined that the data was either inaccurate or incomplete,” the report said. As the CFPB works to update the HMDA submission process, which may eliminate some of these issues, the MMC said it will also ...
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Legislation is afoot in both the U.S. House of Representatives and the Senate that would significantly expand the scope of lenders exempt from the record keeping and reporting requirements under the Home Mortgage Disclosure Act. In late June, Rep. Tom Emmer, R-MN, introduced H.R. 2954, which would amend HMDA to expand the exemption thresholds that determine which depository institutions are subject to the act’s record maintenance and disclosure requirements. However, the triggers are based on the number of loans originated, not the asset size of the institution. Specifically, the bill would exempt depository institutions that originated fewer than 1,000 closed-end mortgages in each of the two preceding calendar years, and depositories that originated fewer than 2,000 open-end lines of credit ...
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The CFPB recently released some non-binding policy guidance on early compliance with the 2016 amendments to its 2013 mortgage servicing rules, including a three-day grace period. Each of the changes are scheduled to take effect on either Thursday, Oct. 19, 2017, or Thursday, April 19, 2018. This is a problem for mortgage servicers who face the very real prospect of operating under one set of rules one day and having to switch systems, policies and procedures to comply with another set of rules the very next day. The regulator acknowledged this was an issue and decided to give the industry what amounts to a three-day grace period. “The bureau has heard concerns that these midweek effective dates for the 2016 ...
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An effort by a handful of state attorneys general to intervene in an enforcement action brought by the CFPB against Sprint Corp. back in 2014 and lay claim to the unspent settlement funds will likely come to naught, after the U.S. District Court for the Southern District of New York blocked the effort. In its enforcement action, brought in December 2014, the CFPB accused Sprint of billing wireless customers tens of millions of dollars in unauthorized third-party charges from 2004 to 2013. The issue here involved charges for what are known as “premium text messages” or “premium short messaging services” because they are frequently delivered by text messages. Examples of such products and services include ringtones, wallpaper images, and text ...
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During the American Bankers Association’s 2017 regulatory compliance conference, held last month in Orlando, a top industry expert discussed and elaborated upon the work she and her colleagues have engaged in to prepare their institution for the upcoming TRID 2.0 clarifying rulemaking, which remains inexplicably delayed at the CFPB. Elizabeth Fredrickson, a vice president at Wells Fargo Bank, told an audience at a breakout session that her compliance team began with a “keep or kill” exercise back in March for all of the CFPB rules. “We brought stakeholders together and talked about what we liked and what we did not like, what we need and what we could do,” she explained. “Really, our conversation about TRID revolved around the fact ...
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The CFPB’s ability-to-repay/qualified mortgage rule hit the mortgage market at a difficult time and is compounding problems many homebuyers are having accessing credit, and the industry hope now is that the bureau will take the critical market dynamics into consideration as it undertakes its review of the ATR rule and revises it accordingly. That was one of the key takeaways from a breakout session at the American Bankers Association’s annual regulatory compliance conference last month in Orlando.“We understand why the rule came into existence, obviously. But what it did is typical when the pendulum goes too far in one direction, then things go too far the other way,” said Richard Andreano, a partner in the mortgage banking unit at ...
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There has not been a lot of recent enforcement activity from the CFPB in terms of its loan originator compensation rule, but industry participants shouldn’t get complacent, according to some top compliance professionals. “We’ve seen the bureau say a couple different times that this is going to be a priority, and they’ve put out a few bulletins on this rule. But we’ve seen very little enforcement activity in this space,” said Maria Earley, a partner with the Reed Smith law firm in Washington, DC, during a panel discussion at the American Bankers Association’s 2017 regulatory compliance conference, held last month in Orlando.That being said, compliance professionals must not let their guard down. “Document everything. Step through with the regulators ...
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The CFPB’s Equal Credit Opportunity Act Valuations Rule may not be much in the spotlight these days, but there are still some key compliance issues that test lenders. The rule updated ECOA’s Regulation B, requiring lenders to provide applicants for first-lien loans on a dwelling with copies of appraisals, as well as other written valuations, developed in connection with the application, whether or not the applicants request copies. One of the challenges of the rule involves timing, according to Elizabeth Fredrickson, a vice president at Wells Fargo Bank. “There’s a concern about the waiver provisions and the timing and having to get those really, essentially, more up front, than within the [required] timeframe,” she said during a panel discussion at ...
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A top official at the CFPB rejected industry claims that the bureau has backed off of rulemaking and amped up its enforcement activity in the wake of the 2016 elections. Speaking during a regulatory panel at the 2017 American Bankers Association’s regulatory compliance conference in Orlando last month, Virginia O’Neill, senior vice president for the ABA’s Center for Regulatory Compliance, said, “There seems to have been a pause in rulemaking. Yet at the same time, it feels like there’s an uptick in enforcement. It’s concerning to everybody out there.” Christopher D’Angelo, associate director of supervision, enforcement and fair lending at the bureau, disputed that perception. “There’s been a lot of chatter lately about this idea that somehow our enforcement activity ...
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Might New Residential Get Sucked into Ocwen’s Struggle with CFPB? In a recent interview with IMFnews, an affiliated publication, New Residential Investment Corp. CEO Michael Nierenberg said the company’s servicing-related deal with Ocwen Financial is coming along and will be completed in the “near future,” though he declined to be specific.... Lawmakers Seeks to Exempt More Lenders From CFPB Exam Oversight. Last week, one member of the U.S. Senate and another from the House of Representative each separately introduced legislation that would increase from $10 billion to $50 billion the threshold figure at which regulated depository institutions are subject to direct examination and reporting requirements of the CFPB....
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