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How to remain relevant among millennial borrowers and their parents
Posted Date: Friday, April 22, 2016
Millennials (those between the ages of 20 and 36) now represent the largest population segment in the U.S. If financial institutions are going to remain competitive, they need to know how to appeal to this generation’s needs and expectations. Michael Marx, senior business leader of research services at Visa Inc., has the answers, which he presented at the Independent Community Bankers of America’s annual conference in New Orleans, with Dodd Frank Update in attendance. Read on to learn more.
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Cordray addresses lender, third party TRID indemnification
Posted Date: Thursday, April 7, 2016
In a reply letter to Sen. Bob Corker (R-Tenn.), delivered Thursday before Consumer Financial Protection Bureau Director Richard Cordray appeared before the Senate Banking Committee, Cordray addressed lenders' liability for errors with the TILA-RESPA Integrated Disclosure mortgage forms. Read on for more details.
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CFPB report connects online payday loans, bank fees
Posted Date: Wednesday, April 20, 2016
The Consumer Financial Protection Bureau (CFPB) released a report titled “Online Payday Loan Payments,” that included CFPB research findings on payday loans and certain installment loans, specifically looking at online lenders. The report includes data collected from 2011 and 2012 and used in an earlier study of the industry. The CFPB expects to release its proposed payday lending rule later this spring.
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A finding of unconstitutional can reverse all CFPB actions
Posted Date: Friday, April 15, 2016
At the April 12 hearing for the highly contentious case between the Consumer Financial Protection Bureau (CFPB) and PHH Corp. – against which Director Richard Cordray issued the bureau’s first administrative decision on an appeal of an administrative law judge’s finding and imposed a $109 million penalty – the District of Columbia Circuit Court of Appeals asked about the constitutionality of the CFPB’s structure.
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Decoding the unsealed MetLife decision: Takeaways
Posted Date: Tuesday, April 12, 2016
The U.S. District Court for the District of Columbia recently determined that MetLife Inc. will be able to shed its Dodd-Frank designation as a “systemically important financial institution.” The opinion against the Financial Stability Oversight Council’s legal interpretations and designation process has been unsealed. Read on for more details.
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FHFA launches principal reduction modification program
Posted Date: Friday, April 15, 2016
The Federal Housing Finance Agency announced April 14 that Fannie Mae and Freddie Mac (the Enterprises) will offer a one-time principal reduction to certain seriously delinquent, underwater borrowers to help them avoid foreclosure and stay in their homes. Borrowers must meet certain criteria in order to qualify. Read on to learn more.
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FHA revises how to calculate student loans for DTI
Posted Date: Friday, April 15, 2016
The Federal Housing Administration has revised its guidance on student loan payment calculations in a Mortgagee Letter titled “Student Loans.” The letter provides revised guidance for mortgagees when calculating student loan obligations for use in a borrower’s debt-to-income ratio calculation. Read on to learn more.
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FDIC eases oversight for de novo banks
Posted Date: Tuesday, April 12, 2016
At the Federal Deposit Insurance Corp. Community Banking Conference “Strategies for Long-Term Success,” Chairman Martin J. Gruenberg discussed the ways in which the regulatory agency has tailored its regulations, provided technical assistance and eased the heightened supervisory period for newly chartered (de novo) community banks. Read on to learn more about other valuable resources to help run your bank business.
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SEC finalizes business conduct standards
Posted Date: Tuesday, April 19, 2016
Title VII of the Dodd-Frank Act authorizes the Securities and Exchange Commission to implement a framework for regulating the over-the-counter security-based swap markets. Now, the commission has announced the adoption of final rules that will implement a comprehensive set of business conduct standards and chief compliance officer requirements for security-based swap dealers and major security-based swap participants. Read on to learn more.
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Dimon on why Chase continues its mortgage business
Posted Date: Tuesday, April 12, 2016
In his annual letter shareholders, JPMorgan Chase CEO Jamie Dimon explained why the megabank has continued its mortgage business despite “increasingly lower returns.” JPMorgan Chase earned a record $24.4 billion in net income on revenue of $96.6 billion in 2015. Although Chase has reduced its product set, it also has reduced its foreclosure inventory. Read on to learn how.
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Living wills of leading banks not strong enough, agencies say
Posted Date: Friday, April 15, 2016
The Federal Deposit Insurance Corp. and the Federal Reserve Board have determined that the 2015 resolution plans from Bank of America, Bank of New York Mellon, JP Morgan Chase, State Street and Wells Fargo were not credible. The regulators also reviewed the plans from Goldman Sachs, Morgan Stanley and Citigroup. Read on to learn more.
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Waters seeks to end homelessness in America
Posted Date: Friday, March 25, 2016
Rep. Maxine Waters (D-Calif.), the ranking member of the House Financial Services Committee, introduced The Ending Homelessness Act of 2016 on March 23. The bill would provide $13.27 billion in funding over five years. The Department of Housing and Urban Development recently reported that there were approximately 407,000 homeless households in 2015.
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CEO pay ratios begin to appear on proxy statements
Posted Date: Tuesday, April 19, 2016
Under Section 953(b) of the Dodd-Frank Act, the Securities and Exchange Commission adopted a rule that requires the CEOs of public companies to disclose the pay ratio between them and the median compensation of their employees. Companies will be required to provide these disclosures for their first fiscal year beginning on or after Jan. 1, 2017; however, some companies have begun to already disclose pay ratios in their proxy statements. Read on for some early examples of pay-ratio statements.
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Goldman settles RMBS claims: Is it a slap on wrist?
Posted Date: Tuesday, April 19, 2016
The Department of Justice and several state attorneys general reached a $5.06 billion settlement with Goldman Sachs, which “acknowledge[d]” that it misrepresented information to investors regarding the packaging, marketing, sale and issuance of residential mortgage-backed securities in the period leading up to the crisis. Some, however, do not think the math adds up. Read on to learn more.
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Strengthen your compliance risk management
Posted Date: Friday, April 8, 2016
At the Independent Community Bankers of America annual conference, Thomas Grundy, senior regulatory consultant at Wolters Kluwer, and Amy Downey, U.S. banking and regulatory expert at Wolters Kluwer, discussed the “three lines of defense” as applied to compliance risk management, including the specific roles relating to risk oversight and controls within an organization. The Office of the Comptroller of the Currency highlighted the importance of the three lines of defense in September 2014 with its issuance of a “heightened expectations” final rule for large banks, standards that could prove to be beneficial for helping manage risk among smaller banks as well.
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GAO: Nonbank servicers not properly regulated
Posted Date: Tuesday, April 12, 2016
The Government Accountability Office has found that the share of home mortgages serviced by nonbanks increased from approximately 6.8 percent in 2012 to approximately 24.2 percent in 2015. Although this growth has increased the capacity for servicing delinquent loans, certain challenges remain. Read on to learn more.
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Seeking guidance on marijuana-related businesses
Posted Date: Friday, April 15, 2016
How should financial institutions product credit to businesses that sell legalized marijuana? This was the question posed by Sens. Jeff Merkley (D-Ore.), Patty Murray (D-Wash.), Michael Bennet (D-Colo.) and Ron Wyden (D-Ore.) in a letter to the federal financial regulating agencies. Although marijuana has been legalized in some states, banks have been reluctant to provide business loans, unsure of how their CAMELS score would be affected. This has forced the businesses to find funding elsewhere, a trend that the legislators say can lead to serious public safety risks.
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CFPB to reopen TRID rulemaking
Posted Date: Thursday, April 28, 2016
Industry communications with the Consumer Financial Protection Bureau (CFPB) appear to have paid off. Nearly seven months after the implementation of the CFPB’s TILA-RESPA Integrated Disclosure (TRID) rule, the bureau announced that it would reopen rulemaking, with a notice of proposed rulemaking expected to be released by late July.
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Unfair billing leads to $35 million penalty for HSBC Bank
Posted Date: Tuesday, April 19, 2016
The Office of the Comptroller of the Currency assessed a $35 million penalty against HSBC Bank USA, N.A., McLean, Virginia and its affiliate HSBC Bank Nevada, N.A., Las Vegas for illegal billing practices regarding its CreditKeeper product. The order was issued pursuant to the Section 5 of the Federal Trade Commission Act prohibition of unfair and deceptive acts or practices, which is similar to the Consumer Financial Protection Bureau’s authority under the Dodd-Frank Act to prohibit unfair, deceptive and abusive acts or practices (UDAAP). Read on to learn more.
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Who exactly is leading the financial services industry?
Posted Date: Friday, April 15, 2016
On the same day that the District of Columbia Circuit Court of Appeals held its hearing between PHH Corp. and the Consumer Financial Protection Bureau, during which the court posed several questions regarding the constitutionality of the bureau’s single-director structure, the bureau announced the hiring of several members to its leadership. Read on to learn more about these new hires and of the currently vacant positions among the other federal financial regulators.
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Lawmakers to CFPB: Have payday lending forum before rulemaking
Posted Date: Tuesday, April 12, 2016
House Reps. Randy Neugebauer (R-Texas) and Mick Mulvaney (R-S.C.) highlighted their continued concern about the Consumer Financial Protection Bureau’s (CFPB) stance on regulating short-term, small-dollar credit products (which include payday loans), requesting that the CFPB convene a forum or roundtable composed of state and tribal officials before introducing any rulemakings. Read on for more details.
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Regulation by enforcement, indirect auto top of mind at Senate Banking hearing
Posted Date: Friday, April 8, 2016
Facing suggestions that the Consumer Financial Protection Bureau was more concerned about collecting money than justice, Director Richard Cordray appeared before the Senate Banking Committee to hear questions on the bureau’s stance that enforcement actions serve as compliance guidance, how it may approach emerging fintech companies and its often-criticized proxy method for detecting discrimination in auto lending.
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How to be responsible: Eight principles for safe and sound innovation
Posted Date: Friday, April 8, 2016
The Office of the Comptroller of the Currency wants to encourage responsible innovation as federally chartered financial institutions develop new ways to meet their customers’ need for credit. The office has issued a whitepaper detailing its latest findings and guiding principles for encouraging innovation and new financial technology. Read on to learn more.
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FTC, Illinois AG shut down phantom debt collectors
Posted Date: Friday, April 8, 2016
As part of Operation Collection Protection, an ongoing federal-state-local crackdown on debt collectors that use deceptive and abusive practices, a federal court agreed to temporarily halt an alleged phantom payday loan debts operation based on a complaint filed by the Federal Trade Commission and the Illinois Attorney General. Read on for more details.
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FTC considers new consumer survey on fraud
Posted Date: Friday, April 8, 2016
Five years since its last asked consumers for their views on fraud, the Federal Trade Commission is seeking public comment on a proposal to conduct a new survey this year. The last survey the agency did showed nearly 11 percent of adults in the U.S. were victims of at least one fraud action covered by the survey. Read on for more details.
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MetLife will shed its SIFI designation (for now)
Posted Date: Friday, April 1, 2016
MetLife Inc. will be shedding its designation as a systemically important financial institution – for now, at least – after U.S. District Judge Rosemary Collyer issued a sealed order removing the designation. Read on for more details about how this may affect the Financial Stability Oversight Council’s designation process.
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GAO: Financial regulatory structure is a mess
Posted Date: Friday, April 1, 2016
The Government Accountability Office has released a report stating that the Dodd-Frank Act generally left the financial regulatory structure unchanged and does not ensure efficient and effective oversight, consistent financial oversight or consistent consumer protections. The office provided three recommendations on how regulators can streamline their supervisory process. Read on to learn more.
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Tailored rulemaking receives more than 130 congressional signatures
Posted Date: Friday, April 1, 2016
More than 130 members of Congress signed a letter addressed to the federal financial regulators, asking their leadership to consider tailoring regulations so that they “are the right ‘fit’ for the financial institution involved.” The letter was sent to Consumer Financial Protection Bureau Director Richard Cordray, National Credit Union Administration Chair Debbie Matz, Federal Reserve Board Chair Janet Yellen, Federal Deposit Insurance Corp. Chair Martin Gruenberg and Office of the Comptroller of the Currency Comptroller Thomas Curry. Read on for more details.
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MBA task force to address secondary mortgage market
Posted Date: Friday, April 1, 2016
The Mortgage Bankers Association has created a task force with the objective of developing a proposal to address the future of the secondary mortgage market and an end-state model that can promote affordable housing. Read on to find out more about the association members developing this proposal.
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Access to capital bills introduced in the House
Posted Date: Friday, April 1, 2016
House Republicans introduced three bills March 23 that would affect access to capital markets: The Micro Offering Safe Harbor Act (H.R. 4850), the Supporting America’s Innovators Act (H.R. 4854) and the Private Placement Improvement Act (H.R. 4852). Read on to learn more.
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Following the Patriot Act: What you need to know when providing prepaid cards
Posted Date: Tuesday, March 29, 2016
The Federal Reserve, Federal Deposit Insurance Corp., Financial Crimes Enforcement Network, National Credit Union Administration and the Office of the Comptroller of the Currency issued a joint guidance on how the Customer Identification Program, as set forth under the USA Patriot Act, should be applied to prepaid cards. Read on for clarity regarding who is a “customer” and what is an “account” under the program’s rule.
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Federal v. state: NY district court provides insight into preemption
Posted Date: Tuesday, March 29, 2016
The U.S. District Court for the Southern District of New York recently held that state law claims arising from a plaintiff’s enrollment in a debt cancellation program were preempted by the National Bank Act and accompanying regulations promulgated by the Office of the Comptroller of the Currency. The case examines the issue of federal law’s explicit and implied preemption (when federal law takes precedence over state law). Read on to learn more.
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FTC, NAR warn consumers of phishing for settlement costs
Posted Date: Tuesday, March 29, 2016
The Federal Trade Commission and National Association of Realtors have issued a warning about a phishing scam that has been targeting the wiring of consumers’ settlement fees. Hackers have been breaking into consumers’ and real estate agents’ email accounts to get information about transactions and then pose as the agent or title company with “last-minute changes” to wiring instructions. Find out ways to keep your consumers and yourselves safe.
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CFTC finalizes reporting, recordkeeping rule for counterparties
Posted Date: Tuesday, March 29, 2016
The Commodity Futures Trading Commission approved a final rule March 16 that eliminates reporting and recordkeeping requirements for trade option counterparties that are neither swap dealers nor major swap participants. Commodity options fall under the Dodd-Frank Act’s definition of “swap” added to the Commodity Exchange Act. Options that qualify for the trade option exemption are exempt from most requirements applicable to swaps under the Dodd-Frank Act. Read on to learn more.
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CFPB issues FAST Act rule to help small, rural creditors
Posted Date: Friday, March 25, 2016
The Consumer Financial Protection Bureau has issued an interim final rule that broadens the availability of certain special provisions for small creditors that operate in rural or underserved areas. The rule is the second provision the bureau has issued under the Fixing America’s Surface Transportation Act (FAST Act).
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Financial exploitation most common, least reported form of elder abuse
Posted Date: Friday, March 25, 2016
The Consumer Financial Protection Bureau released an advisory on ways financial institutions can help prevent financial exploitation of elderly consumers. It has been found that financial exploitation is not only the most common form of elder abuse but also the least reported. “Elder financial exploitation has been called the crime of the 21st century, and fighting it has never been more urgent,” Bureau Director Richard Cordray said. Read on to learn more.
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Reports continue to highlight debt collection as leading cause of complaints
Posted Date: Friday, March 25, 2016
The Consumer Financial Protection Bureau released its fifth annual report on its supervision and enforcement activities under the Fair Debt Collection Practices Act, finding that debt collection remains the largest area for consumer complaints. It also found that servicemembers complained about debt collection practices at twice the rate as non-military consumers. Read on to know what the bureau is targeting.
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Fed’s audited financial statements released
Posted Date: Friday, March 25, 2016
The Federal Reserve has released its audited financial statements, detailing the system’s year-end earnings, remittances to the U.S. Treasury and amounts spent on interest on depository institutions’ balances at the Reserve Banks and for operation costs at the Consumer Financial Protection Bureau. Read on to learn more.
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Fannie: Fewer lenders are easing credit standards
Posted Date: Friday, March 25, 2016
Fannie Mae has released its first quarter Mortgage Lender Sentiment Survey, detailing the views of senior executives of its lending institution customers on their outlook across various areas of the mortgage market. Among the findings was that fewer mortgage lenders reported easing credit standards.
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