News By Edition

After examining data referenced in the bureau’s blog post titled “The CFPB’s enforcement work in 2023 and what lies ahead,” Garris Horn LLP Co-Managing Partner John Levonick spoke with Dodd Frank Update about what he believes institutions should expect to see from the bureau in terms of supervision and enforcement activity.

United Wholesale Mortgage (UWM) filed suit against Mortgage Solutions FCB and its owner for breach of contract and trademark infringement. The lawsuit points to a private Facebook group which uses the UWM logo and serves as a platform for mortgage brokers to share accounts of UWM and its “All In” ultimatum.

The Federal Reserve recently entered into a written agreement with Peoples-Marion Bancorp, Inc. Through a partnership with the Kentucky Department of Financial Institutions (KDFI), the Fed ordered the company to address multiple deficiencies related to the institution’s safety and soundness and remediating apparent legal and/or regulatory violations.

The financial industry is pushing back against the Federal Deposit Insurance Corp.’s proposed updates to corporate governance guidelines aimed at preventing bank failures like those in spring 2023. The guidelines would apply to banks with more than $10 billion in assets.

Former officials from the Department of Housing and Urban Development, Federal Housing Administration, Department of Justice, and the Federal Housing Finance Agency have joined forces to create a new firm offering financial services and specialists in fair lending, consumer protection law, and regulation. Gate House Compliance, a subsidiary of Gate House Strategies, will serve clients across multiple asset classes in financial services, including mortgage, student loan, credit card, and other secured/unsecured credit products, the company stated.

A new report from the Consumer Financial Protection Bureau points to credit card data indicating that smaller credit card issuers have “significantly lower” median annual percentage rates and fees than the largest 25 credit card companies. The report’s findings elicited mixed reactions from the financial sector.

The rise of artificial intelligence sophisticated enough to impersonate individuals has led to a surge in complaints about fraud and other consumer harm. In response, the Federal Trade Commission issued a supplemental notice of proposed rulemaking to strengthen anti-fraud measures included in its recently finalized Government and Business Impersonation Rule.

To streamline loan originations and enhance loan closing rates, mortgage technology provider Ardley Technologies, Inc., recently launched Autopilot, a white-labeled automatic underwriting engine designed to enable lenders to create instant, conditional loan approvals, according to a company press release.

Fannie Mae Vice President and Deputy Chief Economist Mark Palim told Dodd Frank Update the enterprise’s January economic forecast anticipates positive developments in mortgage interest rates and total home sales by the fourth quarter.

Struggling homeowners victimized by a mortgage relief scam can rest easier following a California district court’s ruling finding the perpetrators liable for approximately $19 million in combined penalties and restitution.

A lender faces a class action lawsuit for its response to a ransomware attack that compromised nearly 285,000 customers’ sensitive personal identifying information. The suit claims Planet Home Lending failed to notify customers of the data breach in a timely manner, waiting more than two months before issuing notices to affected consumers.

In a move that would make Capital One Financial Corp. the largest credit card company in the U.S., the company announced it has entered into a $35.3 million merger agreement with Discover Financial Services. If approved by federal regulators, the combined entities would be positioned to compete with the world’s largest payment providers.

The Consumer Financial Protection Bureau recently announced its efforts to provide relief to consumers victimized by an illegal student loan debt-relief operation. Learn more about this matter, as well as what new information the Federal Deposit Insurance Corp. has to share in its latest update on the ongoing independent investigation into its workplace culture, along with news from the Federal Housing Finance Agency and the Federal Reserve.

More than seven years after fining Wells Fargo $100 million for illegal sales practices, the Office of the Comptroller of the Currency terminated the consent order it issued against the bank in September 2016. More than 3 million unauthorized customer accounts were discovered by federal investigators, including several uncovered long after the initial order.

The Federal Reserve Bank of New York recently announced that Helen Mucciolo, chief financial officer and head of the bank’s corporate group, will retire in the fall after more than three decades with the institution. Mucciolo joined the New York Fed in 1993 and has held various management positions throughout her tenure.

FirstFunding Inc. recently appointed Matt Coles to be the national sales manager for the wholly owned subsidiary of First American Financial Corporation, providing warehouse funding to correspondent lenders, community banks, credit unions and secondary market investors.

A data breach involving a Bank of America third-party service provider may have compromised customers’ personal identifying information, according to a company notice distributed to individuals potentially affected by the incident.

The Federal Reserve Bank of New York released its Quarterly Household Debt and Credit Report for the fourth quarter of 2023, offering a snapshot of trends in consumer borrowing habits and total household debt. The report indicated that total household debt reached $17 trillion for the quarter and broke down data about mortgages, student loans, credit cards and auto loans as of the end of 2023.

The Federal Financial Institutions Examination Council released principles intended to help member entities determine whether a supervised institution’s residential property valuation practices are adequate for identifying and mitigating discrimination or bias.

From appraisal bias to redressing consumers harmed by a tech support scam, federal regulators have remained busy in recent weeks. Find out details about these topics and more in this week’s regulatory roundup.

A crypto trading platform agreed to pay $1.5 million to settle charges with the Securities and Exchange Commission and multiple state securities organizations for failing to register its interest-based product offering. The company offered to pay interest to investors who deposited crypto assets on the platform.

One of the nation’s fastest-growing mortgage banks, American Financial Network (AFN), recently selected Snapdocs as its eClosing digital closing provider and eVault solution to boost the company’s operational efficiency and improve the borrower experience, according to a press release.

Federal regulators are facing a lawsuit threatening to vacate the final rule modernizing Community Reinvestment Act (CRA) regulations, which is set to take effect on April 1. The seven plaintiff organizations argue the wide-sweeping changes to CRA assessment standards stray from the statutory intention of the act and will have unintended consequences for banks and communities.

Chevron deference isn’t the only administrative element being considered by the Supreme Court this year. Another case, initially brought against the Securities and Exchange Commission, challenges the validity of agency adjudication, a traditional tool used by the executive branch.

First National Bank of Pennsylvania reached an agreement with the Department of Justice and the state of North Carolina to settle redlining allegations. The joint action accuses the bank of neglecting predominantly Black and Hispanic neighborhoods in Charlotte and Winston-Salem, N.C.

Maryland is considering legislation to make it the next state to codify the “true lender” theory, which would impose new tests to identify the parties involved in loan transactions and prohibit efforts to evade such tests.

Trade advocates for community banks described their concerns to federal regulators in letters to the Federal Trade Commission and the Federal Deposit Insurance Corp. regarding their respective proposed rules. Learn about these matters and more in this roundup.

The Federal Housing Finance Agency’s latest report on the sale of non-performing loans by Fannie Mae and Freddie Mac indicates the agency’s strategy of selling delinquent loan pools to achieve better borrower outcomes has been effective.

National mortgage lender Embrace Home Loans recently promoted its senior vice president of retail and direct sales, Ryan “Buddy” Hardiman, to president.

United Wholesale Mortgage (UWM) initiated its second legal action in as many months against a lender for alleged breach of contract for submitting mortgages to competitors whose business models the wholesaler deems harmful to mortgage brokers. UWM’s policy has raised both legal and ethical questions among industry insiders.

The Department of Justice charged a former Bank Secrecy Act (BSA) compliance officer with criminal BSA violations for his role in a scheme to bring more than $1 billion in high-risk international financial business to a small, now-defunct credit union. The Treasury’s Financial Crimes Enforcement Network ordered the defendant to pay a $100,000 civil money penalty as well.

The Senate Banking Committee explored concerns about the risks posed by fraudsters and cyber criminals who target financial institutions during a recent hearing on the prevalence of ransomware attacks, phishing attacks, check fraud, spoofing and other common types of fraud, as well as the methods used to execute them.

The Securities and Exchange Commission (SEC) exposed an old fraud with a modern twist used to swindle crypto investors out of more than $1.7 billion. The SEC’s complaint said the defendants operated a pyramid scheme advertising significant profits stemming from non-existent revenue streams.

Financial institutions often note concerns about compliance burdens associated with federal regulations in letters to Congress advocating changes to applicable laws and to the agencies charged with crafting their implementing regulations. Learn about the recent request for comment on this matter, as well as other developments announced by federal agencies.

The Federal Housing Finance Agency (FHFA) recently released its 2024 Scorecard, outlining strategic objectives for Fannie Mae, Freddie Mac and their joint venture, Common Securitization Solutions, LLC. FHFA Director Sandra Thompson emphasized the critical role of the annual Scorecard in guiding government-sponsored enterprises.

Aiming to make its review process for mergers and acquisitions more transparent, the Office of the Comptroller of the Currency proposed updates to its rules for business combinations involving national banks and federal savings associations under the Bank Mergers Act.

The Federal Reserve once again left interest rates where they have been – in the target range between 5-1/4 to 5-1/2 percent – following the Jan. 31 meeting of the Federal Open Market Commission, pointing to recent indicators suggesting economic activity is expanding at a “solid” pace. Inflation will be the key determining factor for future changes to the target range changes.

Princeton Bancorp, Inc., recently acquired Cornerstone Financial Corp. in a merger valued at approximately $17.9 million. Upon completion, Princeton will have approximately $2.3 billion in total assets, including $1.8 billion in loans and $2 billion in deposits.

The Association of Independent Mortgage Experts (AIME) recently appointed a new chair and CEO to helm the membership organization representing the independent mortgage industry. Jonathan Haddad will assume the lead role at AIME on April 1, succeeding current chair and CEO Katie Sweeney. Under Sweeney’s leadership, AIME saw a 300 percent increase in total annual membership to more than 65,000.

From check fraud to tax relief measures to crytoassets, trade associations representing the nation’s financial institutions have had plenty to say. Read a sampling of some the most recent insights taken from official statements and blog posts offering a look into matters concerning the financial services industry.

The Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra received a letter from members of the House Financial Services Committee pushing back against the bureau’s proposal to expand its supervisory authority over “Big Tech” companies in the financial space. The representatives argued the bureau should reopen the comment period and reconsider finalizing the rule as proposed.

Dark Matter Technologies, a mortgage origination software provider, recently appointed industry veteran Tony Fox to be its chief of client engagement. Following Black Knight’s September 2023 acquisition by ICE Mortgage Technology, Fox led the company’s enterprise client management operations.

The latest proposed rule from the Consumer Financial Protection Bureau would prohibit depository institutions from charging non-sufficient funds fees on transactions declined at the point of sale. The bureau is characterizing the proposal as a “proactive” move to eliminate one of many charges it calls “junk fees.” Garris Horn LLP Co-Managing Partner Richard Horn shared his thoughts on the proposed rulemaking with Dodd Frank Update.

The Federal Reserve and the New York Department of Financial Services (NYDFS) fined the Industrial and Commercial Bank of China Ltd. and its New York branch approximately $32.4 million combined for using and disclosing confidential supervisory information without authorization. The NYDFS charged the bank with several Bank Secrecy Act/Anti-Money Laundering compliance deficiencies and violations of state law.

A former relationship banker was charged with embezzlement and stealing more than $79,000 from an elderly customer, according to an enforcement action published by the Office of the Comptroller of the Currency. The embezzlement took place over a three-year span, from September 2018 to October 2021.

Regulatory bodies charged with ensuring financial stability, both domestically and globally, have unveiled their priorities for the year. Many of these should not come as a surprise to those familiar with the most significant matters concerning financial markets over the past year.

Community banks and credit unions are vigilant about potential unintended consequences related to regulatory proposals aimed at addressing financial stability and financial criminals that may impact their businesses. Here are a few of the latest advocacy initiatives pushed by trade associations representing some of the nation’s depository institutions.

The Federal Reserve announced it will extend the comment period for its proposed rule on interchange fees amid pushback from financial services advocates. The proposal would lower the maximum interchange fee receivable by large debit card issuers per transaction and establish a system for annual fee adjustments going forward.

In STRATMOR Group’s January Insights Report, Senior Partner Jim Cameron borrows from Abraham Maslow's famed “hierarchy of needs” theory to offer mortgage lenders a real-world approach to shaping their strategies in 2024.