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News By Edition
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Dodd Frank Update Monthly Edition
Dodd Frank Update October 2018
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Flagstar charts compliant, flexible path forward
Posted Date: Tuesday, September 11, 2018
As Flagstar Bank’s supervisory agreement with the Federal Reserve was lifted, so too was the last remnant of the company’s tumultuous past that had weighed on its business operations and the minds of its leaders.
Flagstar Bank CEO Alessandro DiNello told Dodd Frank Update his company’s strategic objectives have not changed with the agreement’s demise but the added flexibility definitely is nice to have in case opportunity knocks. He also noted that, in retrospect, the regulatory orders Flagstar was forced to adhere to may have been a blessing in disguise.
Find out what details he offered about why he views being subject to regulatory orders was the best thing that could have happened to the company.
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Report: Fintechs pose systemic financial risk
Posted Date: Friday, September 28, 2018
Research conducted by Federal Financial Analytics, Inc. indicates that fintechs pose greater financial stability risk to the economy than previously thought, due in large part to their lack of regulatory oversight.
The report details findings indicating that fintechs pose systemic risk stemming from their general lack of liquidity, lack of regulatory oversight compared with banks and credit unions, their dominance in certain areas of the marketplace and the vast amount of personally identifiable information (PII) they store.
Get an in-depth look at the reasoning provided in the report.
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Warren bill would apply CRA to credit unions, nonbanks
Posted Date: Friday, September 28, 2018
Community Reinvestment Act (CRA) requirements would be strengthened and extended to cover credit unions and nonbank mortgage companies under a new bill sponsored by Sen. Elizabeth Warren (D-Mass.).
The legislation’s introduction comes as financial trade organizations have continued to see progress toward long-advocated CRA updates intended to lessen the regulatory burden it places on financial institutions. A Moody’s study indicated the bill could have positive economic effects in addition to helping low- and middle-income families.
Find out more details about the varied opinions on the new legislation.
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FHA to require second HECM appraisals
Posted Date: Friday, September 28, 2018
The Federal Housing Administration (FHA) will start requiring second independent appraisals for Home Equity Conversion Mortgage (HECM) originations, commonly known as reverse mortgages, in cases where the agency suspects inflated property values.
The new requirement will apply to case numbers assigned on or after Oct. 1 through Sept. 30, 2019 but did not include details on what might trigger FHA to require a second appraisal.
Read on to find out more details about the new requirement.
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Fintech withdraws ICBA-opposed ILC charter applications
Posted Date: Friday, September 28, 2018
An online student loan provider’s recent decision to withdraw its bid to become a chartered industrial loan company (ILC) represents the third instance of such a retraction by a fintech in a little more than a year.
Nelnet Inc., an online student loan servicer, released a statement indicating that the company may consider reapplying for an ILC charter with the Federal Deposit Insurance Corp. and the Utah Department of Financial Institutions in the future.
Find out why the Independent Community Bankers of America stands opposed to such charters.
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SEC cites advisors after data breach
Posted Date: Friday, September 28, 2018
A broker-dealer and investment adviser agreed to a $1 million settlement with the Securities and Exchange Commission (SEC) after investigators found that a data breach could have been avoided had it not been for faulty cybersecurity policies and procedures.
This was the SEC’s first time invoking its Dodd-Frank authority to enforce the Identity Theft Red Flags Rule.
Read on to learn more about the enforcement action.
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J.D. Power ranks largest banks by customer satisfaction
Posted Date: Friday, September 28, 2018
The second annual J.D. Power 2018 U.S. National Banking Satisfaction Study ranked the six largest retail banks in the country in terms of convenience, digital offerings and checking account and credit card offerings.
JPMorgan Chase, PNC Bank and U.S. Bank made up the top three, based on six factors intended to measure the quality of the customer experience they offer.
Read on to find out more about the study’s results.
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FHFA proposes UMBS rule, requests comments
Posted Date: Tuesday, September 25, 2018
The Federal Housing Finance Agency (FHFA) has issued a proposed rule regarding the Uniform Mortgage-Backed Security Fannie Mae and Freddie Mac will begin offering in June 2019.
The new, common security will replace the government-sponsored enterprises’ current TBA-eligible mortgage-backed securities.
Find out more about how the FHFA believes the new rule will benefit the secondary market and consumers.
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House passes bills to limit Fed oversight, improve FinCEN
Posted Date: Tuesday, September 25, 2018
Two bipartisan bills that recently passed the House propose to limit federal oversight of insurance savings and loan holding companies and facilitate better cooperation between foreign and domestic financial crime units in working to root out cybercriminals.
H.R. 5059, also known as the “State Insurance Regulation Preservation Act,” and H.R. 6411, the “FinCEN Improvement Act of 2018,” both passed by voice vote and were sent to the Senate, where they were read twice and referred to the Senate Banking Committee.
Find out more about the two legislative pieces and what they propose.
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ABA partners with fintech firm
Posted Date: Tuesday, September 25, 2018
The American Bankers Association (ABA) has entered into a unique partnership with a fintech company in an effort to keep pace with innovations in banking and technology.
The relationship between ABA and the fintech is different than other ABA partnerships in that ABA now owns a stake in the company and sits on its board of directors.
Read on to learn more details about the partnership and the likelihood that it won’t be the last like it.
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NCUA proposes appraisal rule
Posted Date: Tuesday, September 25, 2018
The National Credit Union Administration (NCUA) Board has proposed a rule that will decrease the number of properties requiring appraisals among non-residential properties and in rural areas, and clarify certain requirements for completing appraisals.
Some of the changes implement provisions of the Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155).
Find out more about the proposed rule and the credit union industry’s reaction to it.
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CFPB to move southeast team to Atlanta
Posted Date: Tuesday, September 25, 2018
The Consumer Financial Protection Bureau recently announced the upcoming relocation of its southeast regional office to Atlanta from Washington, D.C.
Shortly after the move was announced, the National Treasury Employees Union released a statement saying the bureau had not notified the union of its plans to move CFPB employees to Atlanta but would provide assistance to affected employees it represented.
Read on to learn more details about the decision to move the team.
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CFPB constitutionality ruling cited in AG case dismissal
Posted Date: Friday, September 21, 2018
A New York judge cited reasoning used in dismissing the Consumer Financial Protection Bureau’s (CFPB) case against a company for allegedly scamming 9/11 first-responders and former NFL players in dismissing the New York Attorney General’s case against the same company.
The judge ruled that the AG’s lawsuit was invalid because it invoked a Dodd-Frank Act statute she deemed invalid in a previous ruling.
Find out the reasoning behind the judge’s decision.
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Warren asks whether Mulvaney violated Hatch Act
Posted Date: Friday, September 21, 2018
Mick Mulvaney’s reported attendance at a recent closed door Republican donor meeting has inspired new legal questions from Sen. Elizabeth Warren (D-Mass.) about potential conflicts of interest for the director of the Office of Management and Budget and acting director of the Consumer Financial Protection Bureau.
Specifically, Warren pressed Mulvaney to disclose details that would reveal whether he violated the federal Hatch Act through his actions.
Read on to learn more about the situation in question.
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Trades praise data security legislation, two other bills
Posted Date: Friday, September 21, 2018
The financial industry praised the House Financial Services Committee’s recent 32-20 vote to advance H.R. 6743, known as the “Consumer Information Notification Requirement Act.”
Trade groups also noted their support for a pair of bills the committee passed aimed at revising definitions pertaining to guidance materials and definitions pertaining to exempt deposits collected through an affiliate or subsidiary.
Find out more details about on the legislation and why the trade associations stood behind it.
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Wells CEO: Efficiency will lead to fewer employees
Posted Date: Friday, September 21, 2018
The promise of automation and self-service capabilities will become reality over the next three years, Wells Fargo CEO Tim Sloan told team members in a companywide town hall meeting, and that is expected to lead to fewer employees at the company.
Sloan told staff in the bi-monthly town hall that the company expects to see a decline in headcount of 5 to 10 percent within the next three years as customer preferences change.
Read on for details from Sloan’s address to staff and the impact of future plans.
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GAO: Community bank reporting on small-business lending is lacking
Posted Date: Friday, September 21, 2018
A recent report from the Government Accountability Office (GAO) looked into the effects of financial regulation on small-business lending by community banks.
However, the data being supplied to regulators does not accurately capture community banks’ lending to small businesses, GAO found, limiting regulators’ ability to properly assess the availability of credit to small businesses.
Read on for more details from the report, and what GAO recommends regulators should do in response.
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ABA political ads target consumers in four states
Posted Date: Friday, September 21, 2018
Doubling the number of political commercials it has produced this year through partnerships with state trade groups, the American Bankers Association (ABA) recently revealed six new ads urging consumers in four states to tell their congressional representatives to support pro-growth economic policies.
The ads, developed through partnerships with the Florida Bankers Association, the Kentucky Bankers Association, the Nevada Bankers Association and the Texas Bankers Association, continue to promote Republican and Democratic candidates.
Read on to learn more about the ads and the association’s recent political activism.
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Navy Federal recognized online banking leader
Posted Date: Thursday, September 20, 2018
Navy Federal Credit Union was named a leader in four of six categories on Javelin’s 2018 online banking scorecard, highlighting a range of features and functionality.
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Plaza Home Mortgage launches VA Renovation Loan Program
Posted Date: Wednesday, September 19, 2018
Plaza Home Mortgage, Inc., a national wholesale and correspondent lender, recently launched a VA Renovation Loan Program designed to will help veterans buy and renovate homes. Doing so has become increasingly popular, given the high home costs and low inventory of the current housing market.
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PenFed Credit Union hires new executive vice president, head of mortgage banking
Posted Date: Tuesday, September 18, 2018
PenFed Credit Union, the nation’s second largest federal credit union, recently hired Winston Wilkinson as its executive vice president and president of mortgage banking. Wilkinson, who will report to PenFed President and CEO James Schenck, will lead the credit union’s largest business unit which has more than 500 employees and serve on PenFed’s 11-member executive team which sets the strategy, focus and execution for the entire organization.
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OCC fintech charter decision rekindles legal challenges
Posted Date: Tuesday, September 18, 2018
The Office of the Comptroller of the Currency (OCC) is being sued over its recent decision to begin accepting non-bank charter applications from fintech companies.
The lawsuit is the second brought by the New York Department of Financial Services (NYDFS) regarding the OCC’s stance on fintech charters and coincides with the renewal of a similar legal challenge previously brought by a coalition of state bank regulators.
Find out what arguments are being put forth in the case and what the OCC said in its rebuttal.
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CFPB proposes Disclosure Sandbox
Posted Date: Tuesday, September 18, 2018
The Consumer Financial Protection Bureau’s (CFPB) freshly minted Office of Innovation has a proposed a rule to establish a Disclosure Sandbox designed to encourage companies to engage in trial programs to improve compliance with the bureau’s existing disclosure policies.
The proposal could highlight the bureau’s stated intent to work on increasing coordination with federal and state regulators. Industry advocacy groups have called for an extension to the comment period connected to the proposal.
Find out more details about what the new sandbox would entail.
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Takeaways from CFPB’s 17th Supervisory Highlights
Posted Date: Tuesday, September 18, 2018
The Consumer Financial Protection Bureau’s 17th edition of Supervisory Highlights details trends the bureau’s examiners observed at covered banks, credit unions and certain nonbanks pertaining to debt collection, mortgage servicing, payday lending, auto loan servicing, credit card account management and small business lending from December 2017 to May 2018.
The latest edition is absent some noteworthy portions that have been staples of past reports, such as information about mortgage origination examinations and non-public enforcement activity. However, the inclusion of examiners’ findings from small business lending exams was new, and provided insight about compliance with Equal Credit Opportunities Act requirements among such entities.
Learn what lessons the latest edition has for the industry.
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CFPB sues structured settlement company for deceptive acts
Posted Date: Tuesday, September 18, 2018
Alleging that they deceived consumers about the nature of certain pension-related product offerings, the Consumer Financial Protection Bureau (CFPB) filed a lawsuit citing multiple parties for violating two consumer financial protection laws.
The bureau accused the defendants of giving consumers the erroneous impression that their pension-advance products were not loans, as well as other illegal conduct.
Find out more details about the allegations.
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Regulators address institutions affected by Hurricane Florence
Posted Date: Tuesday, September 18, 2018
Recognizing the negative impacts of Hurricane Florence on customers, members and business operations at covered financial institutions, the federal prudential regulatory agencies and state regulators announced their intent to provide appropriate regulatory assistance to supervised entities affected by the storm.
The agencies – the Office of the Comptroller of the Currency, the Federal Reserve Board, the Federal Deposit Insurance Corporation and the National Credit Union Administration – released a statement encouraging institutions operating in the affected areas to strive to continue meeting the financial services needs of their communities.
Read on to learn what assistance and recommendations the agencies are offering.
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Regulators draw ‘bright line’ between guidance, law
Posted Date: Thursday, September 13, 2018
In a move intended to better distinguish between guidance and regulation, the federal prudential regulators collectively released a clarifying statement regarding the role of guidance.
The financial industry and other interested parties believe the move is a positive step given the fact that past guidance issued by the Consumer Financial Protection Bureau (CFPB) under Richard Cordray’s leadership was deemed to have the same force and effect of a law.
Find out more about what the regulators intend to do going forward in this regard.
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FSOC: Zions merger poses no significant systemic risk
Posted Date: Thursday, September 13, 2018
Determining that its market activities did not pose significant systemic economic risk, the Financial Stability Oversight Council (FSOC) announced that Zions Bank will not be treated as a designated nonbank financial company upon completion of its merger with Zions Bancorporation.
In its final decision, FSOC noted arguments Zions stressed in a written submission advocating for the regulators not to subject the company to enhanced regulatory scrutiny reserved for large nonbank financial institutions, and argued that any two entities could structure a merger that subverted Section 117 of the Dodd-Frank Act.
Find out more details about the merger and the council’s decision.
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FTC invokes UDAP against debt collectors
Posted Date: Thursday, September 13, 2018
The Federal Trade Commission (FTC) recently invoked its statutory authority to penalize people or entities engaged in unfair or deceptive acts or practices, issuing consent orders against the operators of a debt collection business for using false claims and threats to collect on debts consumers did not actually owe.
The defendants were charged with two counts of violating the FTC Act’s prohibition against deceptive acts and three counts of violating the Fair Debt Collection Practices Act (FDCPA).
Find out more details about the circumstances of the consent orders.
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CFPB clarifies S. 2155 partial HMDA exemptions
Posted Date: Thursday, September 13, 2018
An interpretive rule recently issued by the Consumer Financial Protection Bureau (CFPB) is intended to clarify Home Mortgage Disclosure Act (HMDA) exemption changes enacted under S. 2155, addressing concerns among covered financial entities.
The rule clarifies what requirements banks and credit unions must adhere to if they elect to voluntarily report exempt data fields, what loans and credit lines count toward the thresholds for partial exemptions, which Regulation C data points the partial exemptions cover and partial exemptions for negative Community Reinvestment Act examination history.
Find out more details about the new rule.
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Spiking mortgage rates drive down applications, profit outlooks
Posted Date: Thursday, September 13, 2018
Demand for mortgages and refinances dropped off considerably as mortgage rates reached their highest levels in weeks, per the Mortgage Bankers Association (MBA). Lenders project negative profit margins over the next three months, according to Fannie Mae.
Lenders cited “competition from other lenders” as the top reason for their continually declining profit margin outlook, and “consumer demand” as the second most prevalent reason.
Find out more details about the state of the mortgage industry and outlooks for the near future.
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ASA names new top executives
Posted Date: Thursday, September 13, 2018
The American Securities Association, which represents the interests of the country’s top Main Street financial services companies, recently announced multiple changes to its executive leadership.
Those changes include the naming of a new chairman, a new CEO and a new head of public affairs.
Read on to find out who has been named to these high-profile roles.
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AFN expands reach of Cloudvirga digital mortgage technology
Posted Date: Tuesday, September 11, 2018
Cloudvirga, a provider of digital mortgage software, announced the deployment of its Cloudvirga Enterprise POS to all 100 branch locations of American Financial Network (AFN), a privately held mortgage company that employs over 750 loan officers and serves tens of thousands of customers nationwide. AFN funded over $5 billion in loans in 2017 and is one of the fastest-growing mortgage lenders in the U.S.
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Mulvaney replenishes CFPB advisory councils
Posted Date: Tuesday, September 11, 2018
The Consumer Financial Protection Bureau’s (CFPB) advisory councils have been replenished approximately two months after acting director Mick Mulvaney’s decision to dismiss the entirety of their volunteer memberships.
The bureau has tapped 23 new experts from outside the federal government to serve one-year terms on its three advisory committees established by the Dodd-Frank Act – the Consumer Advisory Board, Community Bank Advisory Council and Credit Union Advisory Council.
Find out which council members are affiliated with industry advocacy groups.
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Senate confirms Clarida as Fed vice chair
Posted Date: Tuesday, September 11, 2018
The Senate recently voted 69-26 to confirm economic specialist Richard Clarida as vice chairman of the Federal Reserve Board of Governors.
Clarida is expected to favor Chairman Jerome Powell’s plan to continue to gradually raise interest rates. Banking advocacy groups have expressed support for Clarida, as well as another one of President Donald Trump’s Fed nominees who has yet to come up for a Senate vote.
Find out more about the new Fed vice chair and the industry’s thoughts on other pending nominations.
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Data security bill introduced in House
Posted Date: Tuesday, September 11, 2018
On the one-year anniversary of Equifax’s infamous announcement that hackers had breached the company’s data security safeguards and compromised personal information belonging to more than 100 million people, Rep. Blaine Luetkemeyer (R-Mo.) introduced bipartisan legislation designed to hold companies accountable for the security of the consumer information they hold.
The Consumer Information Notification Requirement Act proposes to amend the Gramm-Leach-Bliley Act to require companies to establish and maintain safeguards to keep data safe and alert affected parties in the event of a breach.
Find out more details about the newly introduced legislation.
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CFTC proposes swap rule exemption for small institutions
Posted Date: Tuesday, September 11, 2018
Financial holding companies with less than $10 billion in assets would be exempt from clearing requirements on certain swaps under a new rule recently proposed by the Commodity Futures Trading Commission (CFTC).
The rule would formalize clearing cost relief for bank holding companies and savings and loan holding companies provided via a 2016 CFTC no-action letter, responding to advocacy by the American Bankers Association.
Read on to learn more details about what the rule would mean for smaller financial holding companies if finalized.
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ABA endorses Promontory fulfillment services’ Mortgage Fulfillment Solution
Posted Date: Monday, September 10, 2018
The American Bankers Association recently endorsed a comprehensive mortgage fulfillment solution, developed by Promontory Fulfillment Services (PFS), marketed to community banks nationwide. PFS, a unit of Promontory MortgagePath, designed its white-label mortgage fulfillment services to give banks new and better options in terms of cost, compliance and customer experience, according to a press release.
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Supreme Court could hear Big Spring suit over CFPB constitutionality
Posted Date: Friday, September 7, 2018
State National Bank of Big Spring, Texas, recently joined with the Competitive Enterprise Institute (CEI), and the 60 Plus Association in petitioning the Supreme Court to issue summary judgment regarding a lawsuit initially filed in 2012 against former Treasury Secretary Jacob Lew, making a case for the abolishment of the bureau and every regulation enacted by it.
The fact that D.C. Circuit Court of Appeals Judge Brett Kavanaugh ruled on the case in 2015, gave a dissenting opinion in the PHH Corp. v. CFPB case asserting that the bureau is unconstitutionally structured and is awaiting Senate confirmation to join the Supreme Court adds significant intrigue to the matter.
Get more details about the lawsuit and what Kavanaugh previously said about its merits.
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Hensarling touts new, old GSE reform plans
Posted Date: Friday, September 7, 2018
Lamenting the fact that the government-sponsored enterprises (GSEs) have remained under conservatorship for 10 years, House Financial Services Committee Chairman Jeb Hensarling (R-Texas) revealed a new bipartisan proposal for dramatic secondary market reforms at the outset of a hearing about the state of the housing finance system.
Hensarling stated that he believes their proposal also would preserve aspects of the current secondary market system which the industry favors. Multiple industry trade groups have expressed strong support for allowing the federal government to maintain a role in supporting the housing finance system.
Find out more about the proposal and the industry’s position.
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Industry to Congress: Preserve mortgage market access, affordability
Posted Date: Friday, September 7, 2018
Prior to the unveiling of Rep. Jeb Hensarling’s (R-Texas) legislative proposal to reform the government-sponsored enterprises (GSEs), multiple industry advocacy groups wrote to congressional leaders urging them to codify measures imposed during the conservatorship of Fannie Mae and Freddie Mac.
Among the measures the organizations wish to see etched into law are those that have provided pricing parity across mortgage lenders, protected taxpayers from excessive risk, implemented a new single-family infrastructure in the secondary market and provided support for strong, sustained liquidity in the multifamily rental market.
Find out more details about what the organizations are advocating.
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Fifth Circuit rules bureau CID inadequate
Posted Date: Friday, September 7, 2018
The Fifth Circuit Court of Appeals determined that a Consumer Financial Protection Bureau civil investigative demand (CID) was not specific enough to satisfy statutory requirements in a ruling overturning a lower court’s decision.
The bureau filed a petition with the Northern District Court of Texas to enforce the CID, which the court granted, rejecting Public Data’s arguments that the CID failed to provide fair notice regarding the bureau’s investigation into a possible violation and that the bureau lacked jurisdiction to engage in such an investigation.
Learn more details about the CID and what arguments resonated with the circuit court.
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Applications down, refinance market share up in latest mortgage survey
Posted Date: Friday, September 7, 2018
August ended with a slight decline in mortgage applications and a modest increase in the market share of refinances, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending Aug. 31.
Interest rates and effective dates varied among different mortgage types, per data provided by the survey results.
Read on to learn more details about the latest trends.
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