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The legal battle over modernized Community Reinvestment Act requirements has culminated in a preliminary injunction in federal court. Dodd Frank Update spoke with Garris Horn PLLC Co-Managing Partner Richard Horn about the development, which did not come as a shock to many industry insiders aware of the challenges presented by the cumbersome final rule.

The mortgage industry expressed concerns about how the Consumer Financial Protection Bureau’s latest supervisory highlights may impact borrowers’ trust in their mortgage service providers. The report highlighted problematic behavior amongst mortgage servicers related to Regulation X, Regulation Z, unfair, deceptive, and abusive acts or practices, and what the bureau deems as “junk fees.”

The U.S. Chamber of Commerce filed a lawsuit against the Federal Trade Commission (FTC) over the agency’s newly announced final rule banning non-compete agreements. The lawsuit challenges the FTC’s authority to prohibit companies from limiting their employees’ ability to work for rivals.

To help investigators gather information on corporate malfeasance, the Department of Justice’s Criminal Division launched a pilot program to incentivize individuals involved in corporate or financial misconduct to voluntarily disclose what they know. The agency will offer these individuals discretionary grants of immunity and non-prosecution agreements in exchange for cooperation.

The Federal Communications Commission voted 3-2 along party lines in favor of restoring net neutrality, the principle that broadband internet service providers should treat all online traffic equally. The decision to reclassify broadband service as a Title II telecommunications service comes seven years after it was repealed under the Trump administration despite strong public opposition.

Federal regulatory agencies frequently seek feedback from industry stakeholders by forming advisory committees and advertising for comments on rulemaking activities. The Federal Deposit Insurance Corp. recently added representatives from multiple institutions to its advisory committee on community banking. Learn about these developments and more in this regulatory roundup.

New bipartisan legislation introduced in the Senate proposes to establish a framework for federal and state oversight of a specific category of digital assets, known as stablecoins. The Lummis-Gillibrand Payment Stablecoin Act outlines guidelines to address consumer protection and financial stability concerns raised by the growing prevalence of stablecoin issuers.

Informative Research, a leading technology platform that delivers data-driven solutions to the lending community, announced it has expanded its team to add mortgage industry veteran Kurt Raymond, to be the company’s senior vice president and borrower journey engineer. The company said in a press release that the move represents its commitment to helping lenders streamline origination costs and enhance the borrower experience.

Asserting the need for more oversight of federal housing regulators, the Senate Banking, Housing and Urban Affairs Committee convened a hearing to address pressing issues in the housing sector and assess the performance of its principal regulatory bodies. The hearing featured testimony from Federal Housing Finance Agency Director Sandra Thompson and Department of Housing and Urban Development Acting Secretary Adrianne Todman.

The Federal Reserve’s proposed changes to regulations on interchange fee caps have received pushback from the financial sector and sparked disagreement among Fed Board governors. The Fed extended the comment period by 90 days, until May 12, in response to industry concerns about needing more time to evaluate the rule’s implications. Comments have continued to roll in from banks, credit unions, legislators, merchants and non-profit organizations expressing mostly opposition to the proposal.

The Federal Housing Finance Agency recently released its annual Housing Mission Report, with details about actions undertaken by the government-sponsored enterprises and the Federal Home Loan Banks last year to promote access to financing for affordable, sustainable, and equitable housing and targeted economic development.

The National Credit Union Administration unanimously approved an advance notice of proposed rulemaking asking stakeholders to suggest improvements to the agency’s regulations implementing its records preservation program and accompanying guidelines. NCUA rules and regulations require all federally insured credit unions to maintain a records retention program to identify, store and reconstruct vital records in the event they are destroyed.

Federal regulators are constantly addressing issues facing financial institutions of all sizes. In this roundup, learn about recent developments and remarks pertaining to some of the largest banks in the world, as well as smaller, community-based institutions.

Ginnie Mae President Alanna McCargo announced her intent to resign from public office after more than three years with the Biden-Harris administration and 25 years in housing finance. Her resignation will become effective May 3.

The Consumer Financial Protection Bureau (CFPB) has been no stranger to criticism since its inception. Lawmakers and industry insiders have noted the agency’s often unorthodox and, some would argue, unlawful approach to rulemaking, supervision and enforcement, as well as questions about the constitutionality of the bureau’s structure and financial reporting practices. Persistent concerns over the CFPB’s transparency and accountability expressed by congressional Republicans recently spurred the House Financial Services Committee's (FSC) Subcommittee on Financial Institutions and Monetary Policy to hold a hearing entitled, “Agency Audit: Reviewing CFPB Financial Reporting & Transparency.”

A judge in the U.S. District Court of the District of Minnesota ruled on the Federal Deposit Insurance Co.’s (FDIC) motion to dismiss a complaint brought by the Minnesota Bankers Association and Lake Central Bank, a Minnesota-chartered commercial bank, claiming one of the agency’s financial institutions letters (FIL) amounted to a legislative rule promulgated improperly under the Administrative Procedures Act. The FIL in question shared the FDIC’s guidance on when a bank charging multiple nonsufficient funds fees may run afoul of federal banking regulations.

The Consumer Financial Protection Bureau is aiming to streamline its nonbank designation protocols with a new procedural rule that builds on its previous actions toward implementing a long “dormant” statutory authority. The procedural updates include the reallocation of certain duties to the director that previously fell to specific assistant and associate director roles.

The Consumer Financial Protection Bureau’s final rule restricting credit card late fees faces a resolution of disapproval which has substantial industry support. The House Financial Services Committee voted 28-22 along party lines to advance the measure to the full House for consideration. See what various financial trade associations have to say about the resolution, as well as other recent regulatory and legislative developments.

Financial industry advocates are calling for federal policies to address the “skyrocketing” numbers of “pig butchering” scams. The Treasury Department’s Financial Crimes Enforcement Network and the Department of Justice have issued warnings to financial institutions and the broader public about the dangers of these types of crimes, which are often perpetrated through online channels using virtual currencies.

Community banks are urging Congress to consider specific revisions to the Farm Credit Adjustment Act, which is intended to aid rural credit institutions in providing critical financial support to farmers and producers throughout the country. The financial industry generally supports many of the bill’s provisions but has concerns regarding aspects applying to non-farm financing authorities within the Farm Credit System.

Click n’ Close, a multi-state mortgage lender serving consumers and mortgage originators, announced it has expanded its suite of down payment assistance (DPA) loan products to include a shared appreciation option to help address the affordability challenges facing homebuyers.

The Consumer Financial Protection Bureau (CFPB) has not confirmed nor denied reports that it is considering prohibiting mortgage providers from charging homebuyers for lenders’ title insurance policies. Former CFPB attorney Richard Horn, co-managing partner at Garris Horn PLLC, offered his take and urged lenders to pay close attention to the agency’s request for information on closing costs. The information continues to fuel industry concerns that regulators are targeting settlement services in an attempt to lower housing costs for consumers, potentially increasing lending risks.

The Consumer Financial Protection Bureau issued a statement expressing support for state-level Community Reinvestment Act rules proposed by the Illinois Department of Financial and Professional Regulation. The bureau commended the state’s efforts to tailor reinvestment obligations to its needs and urged it to adopt the proposal.

Provident Financial Services, Inc., received regulatory approval to acquire all assets of Lakeland Bancorp, Inc., in a merger between the two New Jersey-based bank holding companies and their subsidiaries. Federal regulators conducted extensive analyses assessing the merger’s potential impact on the financial marketplace, the results of which were included in a Federal Reserve order approving the transaction.

The Office of the Comptroller of the Currency has extended the comment period for its proposed rules and policy statement on bank mergers and acquisitions. The agency announced commenters will have until June 15 to weigh in.

In the Information Age, regulators spend a tremendous amount of time addressing issues dealing with how consumer data is used and disseminated across multiple industries. The following roundup of recent headlines reflects these efforts and the areas where regulators see violations of federal laws intended to guard against data misuse.

The Federal Deposit Insurance Corp. (FDIC) released a report detailing how the agency would manage the orderly resolution of a large, complex financial company under Title II of the Dodd-Frank Act. FDIC Chairman Martin Gruenberg touted the report as “the most comprehensive explanation to date of how the FDIC expects to utilize those authorities.”

Optimal Blue recently announced the promotion of Rick Allen, with his 35 years of housing industry experience, to chief operating officer (COO). Allen most recently served as Optimal Blue’s chief administrative officer.

Shortly after divulging its plans to undertake new rulemaking under the Fair Credit Reporting Act, the Consumer Financial Protection Bureau cited instances in which credit reporting agencies failed to exclude inaccurate data affecting victims of human trafficking and identity theft in its Spring 2024 Supervisory Highlights.

After three meetings between staff at the Consumer Financial Protection Bureau (CFPB) and the European Commission (EC), the two agencies’ top regulators issued a joint statement describing their discussions on priority topics, including artificial intelligence, digital payments access and fraud, and “Buy Now, Pay Later” products and services.

Industry organizations hoping for the long-anticipated interest rate cuts to be approved by the Federal Reserve this spring or early summer may have to wait longer than expected, based on minutes released from the Federal Open MIndustry organizations hoping for the long-anticipated interest rate cuts to be approved by the Federal Reserve this spring or early summer may have to wait longer than expected, based on minutes released from the Federal Open Market Committee’s March meeting. arket Committee’s March meeting.

Harborstone Credit Union recently entered into the second of two bank purchase agreements in six months by agreeing to purchase Savi Financial Corp., Inc., the bank holding company for SaviBank, in an all-cash transaction. The credit union previously agreed to acquire First Sound Bank in August of last year.

The Consumer Financial Protection Bureau’s final rule to cap credit card late fees has met with significant pushback from the financial industry. Learn about these views and more in this roundup of takeaways from industry trade groups.

To facilitate information sharing regarding nonbank mortgage companies, the Federal Housing Finance Agency (FHFA) and the Conference of State Bank Supervisors entered into a memorandum of understanding establishing protocols between state financial regulators and the FHFA.

The National Association of Industrial Bankers, American Financial Services Association, and the American Fintech Council brought suit against the state of Colorado over the state “opting out” from a section of federal banking law, resulting in out-of-state lenders being subject to the state’s rate cap. Should the bill take effect as planned on July 1, Colorado would be able to subject out-of-state lenders to the state’s rate cap. The trade groups argued this law exceeds the state’s authority and conflicts with the U.S. Constitution’s Supremacy and Commerce Clauses.

High mortgage rates are causing borrowers to pay more upfront for discount points, according to the Consumer Financial Protection Bureau’s findings in a new report. Using quarterly Home Mortgage Disclosure Act data dating back to 2019, the bureau found the percentage of homebuyers paying for discount points in 2023 was nearly double that of 2021 and was most pronounced among borrowers with lower credit scores.

The Financial Crimes Enforcement Network is considering updating bank requirements under its Customer Identification Program rule to account for technological advancements since the rule was promulgated. The agency is encouraging interested parties to offer feedback by responding to a request for information recently published in the Federal Register.

There are often so many regulatory developments to count in a given week that many get lost in the shuffle behind more prominent issues. Here is a look at a handful of recent announcements from federal regulators that you may have missed.

The Securities and Exchange Commission recently charged 17 perpetrators for their roles in a $300 million Ponzi scheme targeting more than 40,000 investors, mostly of Latino heritage, in three countries. The scheme involved a Houston-based crypto firm, which was ordered by a Texas district court in September 2022 to cease and desist its illegal activities.

The Consumer Financial Protection Bureau is cautioning remittance providers to refrain from deceptive marketing tactics regarding the cost or speed at which consumers can expect such transactions to be executed. The bureau released a new circular on remittance transfers to explain how some companies charge fees on international money transfers and make misleading claims about processing times in an apparent attempt to justify the charges.

The Consumer Financial Protection Bureau (CFPB) released its Consumer Response Annual Report, analyzing complaints submitted by consumers to the CFPB between January and December 2023. These reflect consumers’ experiences across various categories, including mortgages, debt collection, debt or credit management and payday loans.

In a move that strengthened the bank’s presence in the state of Virginia, Atlantic Union Bankshares Corp. completed a merger with American National Bankshares Inc. on April 1. The acquisition brings Atlantic Union’s total assets to $24.3 billion, including $19.4 billion in total deposits and $17.9 billion in total loans held for investment.

Navy Federal Credit Union (NFCU) recently unveiled its new Military Banking Facilities (MBF) as part of a Department of Defense initiative to provide financial services to military personnel overseas. NFCU is branding its MBFs as “community banks,” which has drawn criticism from community banking advocates who note the institution’s tax-exempt status and concerns about regulatory oversight.

The financial industry has been vocal in its opposition to the Consumer Financial Protection Bureau’s recent proposed rules on “junk fees.” Multiple national and state-level trade associations recently issued comment letters urging the bureau to reconsider finalizing its overdraft rule. Read about those comments and more in this roundup.

Artificial intelligence (AI) has opened up new avenues for professionals to advance their business operations or run afoul of federal laws. Two recent orders by the Securities and Exchange Commission (SEC) describe an example of the latter – “AI washing.” Accused of making false and misleading statements about their use of AI, two firms recently paid $400,000 in civil money penalties to the SEC.

Consumer Financial Protection Bureau Director Rohit Chopra explained to a room full of retail banking professionals how the bureau’s latest rules align with the agency’s statutory mandate to promote fairness, transparency and competition in the financial market during the Consumer Bankers Association’s2024 conference in Washington, D.C. The banking industry has been vocal about its views on the agency’s rules on data privacy and “junk fees,” with the latter being a significant source of controversy.

Compliance and innovation are interconnected, Acting Comptroller of the Currency Michael Hsu told attendees at the Consumer Bankers Association’s 2024 conference in Washington, D.C. Dodd Frank Update was in attendance as Hsu said he believes artificial intelligence and machine learning can each be a source of strength for compliance risk management systems moving forward.

The acceleration of technology has spurred federal and state agencies to consider ways of enhancing their capacity to enforce consumer protection laws in the ever-transforming digital landscape. The Consumer Financial Protection Bureau and the Federal Trade Commission were among the federal agencies to issue separate statements detailing agency-specific plans for staffing and approaches applicable to emerging technology.

The Federal Trade Commission (FTC) recently issued a public warning about scammers pretending to be affiliated with the FTC in an attempt to steal money from consumers. The notice to consumers came shortly after the agency announced its proposed rule to combat artificial intelligence impersonation.

Federal regulators are taking various steps to help safeguard consumers and businesses against risks posed by emerging technology. Learn about one agency’s newly effective rule targeting a specific type of scammer, as well as other recent developments.

The Consumer Financial Protection Bureau has made its 2023 Home Mortgage Disclosure Act Loan Application Register data accessible online with loan-level information filed by financial institutions and modified to protect consumer privacy.

Argyle, which provides automated income and employment verifications for lenders, recently tapped Jason Cave, former chief fintech officer and deputy director of the Federal Housing Finance Agency’s Division of Conservatorship Oversight and Readiness, to join its board of advisors.