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CFPB may be ‘setting the stage’ for emerging tech adoption
Posted Date: Friday, September 22, 2023
While some may be tempted to assume the latest guidance from
the Consumer Financial Protection Bureau about using artificial intelligence (AI)
in credit decisions is intended to put the industry on notice, Garris Horn
Senior Partner John Levonick told Dodd Frank Update that does not appear
to be the case. In fact, he contends the bureau is “effectively setting the
stage for successful use of emerging technology.”
Find out what he believes the impact will be as lenders gain
a better understanding of how to use AI and machine learning successfully.
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FinCEN issues first enforcement under ‘Gap Rule’
Posted Date: Friday, September 22, 2023
Citing willful violations of the Bank Secrecy Act, the
Financial Crimes Enforcement Network recently issued a $15 million civil
money penalty against Bancrédito International Bank and Trust Corp. – the
agency’s first enforcement action against a Puerto Rican International Banking
Entity.
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Federal Reserve votes to maintain interest rates
Posted Date: Friday, September 22, 2023
The
Federal Reserve Board announced there will be no change in interest rates to
support its long-term goals of attaining maximum employment and an inflation
rate of 2 percent. The Federal Open Market Committee decided at its September
meeting to maintain the target range for the federal funds rate while
continuing to assess additional data and implications for monetary policy.
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MBA reports biggest application increase since June
Posted Date: Friday, September 22, 2023
The Mortgage Bankers Association reported the largest
increase in applications since June in its Weekly Mortgage Applications Survey
for the week ending Sept. 15. Mortgage applications jumped 5.4 percent
from the previous week’s results, which included an adjustment for the Labor
Day holiday.
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CUNA, NAFCU select leadership team for proposed merger
Posted Date: Friday, September 22, 2023
Members
of the country’s two largest credit union trade organizations will vote on a
proposed merger on Nov. 1, which would combine the Credit Union National
Association and the National Association for Federally-Insured Credit Unions
into one.
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Biden nominates first Asian American to NCUA Board
Posted Date: Friday, September 22, 2023
If President Joe Biden’s nomination to the National
Credit Union Administration (NCUA) Board of Directors is confirmed, she will
become the first Asian-American to serve on the NCUA Board since the agency’s
founding in March 1970.
She would take up the seat vacated by Rodney Hood, whose
term expired in August.
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Mortgage industry leaders testify against Basel III
Posted Date: Tuesday, September 19, 2023
A recent hearing on the Federal Reserve’s proposed
rulemaking to implement the remaining provisions of the international Basel III
agreement offered industry leaders a chance to testify in front of lawmakers
regarding the measure, which the Fed voted to advance at its July 27 meeting.
Most industry groups expressed opposition to the measure.
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FDIC reviews supervision of failed First Republic Bank
Posted Date: Tuesday, September 19, 2023
An internal review of the Federal Deposit Insurance Corp.’s
supervision of First Republic Bank highlights vulnerabilities in the company’s
business model and management strategies related to interest rate changes from
2018 until its failure in May.
The report indicates a link between First Republic’s failure
and that of two other banks in March.
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MBA examines variances in mortgage revenues, costs, profitability
Posted Date: Tuesday, September 19, 2023
The Mortgage Bankers Association released a whitepaper for
financial professions navigating the ever-changing mortgage lending landscape
through peaks and valleys in revenues and costs, as well as the ever-winding
regulatory river through the mortgage marketplace.
The whitepaper explores proposed regulatory evolutions
affecting mortgage lenders and offers analysis exploring the extent of their
impact.
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MISMO releases updated reference guide
Posted Date: Tuesday, September 19, 2023
The Mortgage Industry Standards Maintenance
Organization recently published its new refence guide, which incorporates
updates required for the Version 3.6 XML Reference Model.
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MISMO seeks nominations for governance committees
Posted Date: Tuesday, September 19, 2023
The
real estate finance industry’s standards organization, MISMO, is seeking
nominations for qualified industry professionals to serve on either of the two MISMO
Standards Governance Committees – the Residential Standards Governance
Committee or the Commercial Standards Governance Committee.
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Federal Reserve swears in three board members
Posted Date: Tuesday, September 19, 2023
Federal
Reserve Chairman Jerome Powell recently swore in three board members – one who
is entering a second term, one who is getting a new title and one who is brand
new to the Board of Governors.
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Mission Credit Union chooses Black Knight loan servicing system
Posted Date: Friday, September 15, 2023
Black Knight, now a part of Intercontinental Exchange, recently
announced an agreement with Mission Federal Credit Union for the use of Black
Knight’s MSP loan servicing system – a comprehensive, end-to-end loan
servicing system supporting all aspects of servicing, from loan boarding to
default.
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CFPB butts heads with banks over small business lending rule
Posted Date: Friday, September 15, 2023
The Consumer Financial Protection Bureau’s (CFPB) small-business
lending rule, finalized in March, is the subject of a back-and-forth legal
battle between the bureau and seven Kentucky state-chartered banks, one
national bank operating in Kentucky and the Kentucky Bankers Association arguing
the rule contains too many new data collection requirements and the bureau
overstepped what Congress envisioned for such a rule when it approved the
Dodd-Frank Act.
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FHFA seeks input on new GSE credit scoring model
Posted Date: Friday, September 15, 2023
The Federal Housing Finance Agency (FHFA) announced it will
hold additional stakeholder forums and listening sessions to gather public
feedback on the agency’s plan to transition to a new credit scoring model for
the government-sponsored enterprises (GSEs) – Fannie Mae and Freddie.
The plan calls for the GSEs to adopt new credit scoring
models and move from a tri-merge model for reporting requirements to a bi-merge
reporting model. FHFA initially announced the pending changes in October 2022 as
an effort to better ensure the quality of loans serviced by the
enterprises.
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SEC charges nine for advertising ‘hypothetical performance’
Posted Date: Friday, September 15, 2023
Weeks after announcing its first action against a company
for violating the agency’s new marketing rule, the Securities and Exchange
Commission (SEC) released details about nine more organizations that elicited
similar charges.
The nine registered investment advisers subject to the marketing
rule stand accused of advertising hypothetical performance metrics on their
websites without adopting and/or implementing required policies and procedures.
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FDIC: Banking industry ‘resilient’ in second quarter
Posted Date: Friday, September 15, 2023
Despite
three failed bank acquisitions, the Federal Deposit Insurance Corp.’s
second-quarter banking profile included some high notes. There were
improvements in loan balances and community bank net income compared with the
previous quarter and one year prior, based on financial data collected from
4,645 federally insured commercial banks and savings institutions.
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Mortgage credit availability ticked up in August
Posted Date: Friday, September 15, 2023
Mortgage lenders saw an uptick
in credit availability in August, according to the Mortgage Credit Availability
Index (MCAI), a report in which the Mortgage Bankers Association provides analysis
of data compiled using ICE Mortgage Technology.
Per the MCAI, mortgage credit
availability inched up by 0.3 percent in August, indicating a slight loosening of
lending standards, whereas a decline in MCAI would indicate that lending
standards are tightening.
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Freddie Mac CEO to retire, GSE anticipates smooth transition
Posted Date: Friday, September 15, 2023
Freddie Mac CEO Michael DeVito recently told board leaders
at the government-sponsored enterprise he has helmed since June 2021 that he
intends to retire during the first quarter of 2024.
The Freddie Mac Board of
Directors and Federal Housing Finance Agency Director Sandra Thompson issued
statements regarding DeVito’s pending departure.
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National Mortgage Insurance Co. integrates with Calyx Point LOS
Posted Date: Thursday, September 14, 2023
National Mortgage Insurance Corporation (National MI), a
subsidiary of NMI Holdings, Inc., announced it has integrated with Calyx
Software’s Point loan origination system (LOS) to enable lenders and brokers to
order National MI’s real-time, risk-based mortgage insurance through its Rate
GPS tool without having to leave the Point platform, according to a press
release.
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Court rules against CFPB in UDAAP lawsuit
Posted Date: Tuesday, September 12, 2023
The District Court for the Eastern District of Texas ruled in favor of the banking industry in a lawsuit challenging the legality of the Consumer Financial Protection Bureau’s updates to its unfair, deceptive, or abusive acts or practices examination manual.
In March 2022, the bureau announced changes to its supervisory operations to better guard against discriminatory practices, particularly with respect to fair lending laws. One of these changes involved expanding the bureau’s interpretation of “unfair” to include discrimination, raising concerns of statutory overreach by the bureau.
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Lengthy CFPB discrimination case ends with $6 million settlement
Posted Date: Tuesday, September 12, 2023
Five years after being named the defendant in a class-action
discrimination lawsuit, the Consumer Financial Protection Bureau recently
agreed to a proposed $6 million settlement with 85 employees who claim the
bureau showed preferential treatment toward white and male employees to the
detriment of their coworkers who are minorities and/or women.
When these employees complained about unfair treatment, they
faced retaliation from management, according to official case filings.
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SEC action highlights merits of self-reporting
Posted Date: Tuesday, September 12, 2023
The Securities and Exchange Commission (SEC) recently issued
an enforcement action against Stanley Black & Decker involving inaccurate
proxy disclosures in which the company underreported certain compensation paid
to high-level executives.
Proxy statements filed by the company from 2018-2021
indicate that Stanley paid $1 million on average to four executive officers and
one director. These payments were disclosed as “All Other Compensation” in
financial reports, according to an SEC release.
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CFPB releases 2024 HMDA Filing Instructions Guide
Posted Date: Tuesday, September 12, 2023
The 2024 Filing Instructions
Guide for Home Mortgage Disclosure Act (HMDA) can be found via the websites for
the Consumer Financial Protection Bureau and the Federal Financial Institutions
Examination Council.
Additionally, the bureau
released its Supplemental Guide for Quarterly Filers for 2024. This guide includes
2024 calendar year quarterly filing deadlines for financial institutions tasked
with filing HMDA data on a quarterly basis.
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Examining Bitcoin ATMs with the Kansas City Fed
Posted Date: Tuesday, September 12, 2023
The
topic of cryptocurrency has become increasingly mainstream, so much so that
Bitcoin ATMs now can be found just about anywhere. The Federal Reserve Bank of
Kansas City recently published an article detailing findings from its research
on this relatively new and largely unexamined industry, describing how these
standalone machines work, who uses them and some of the risks faced by the
industry.
Bitcoin ATMs, also referred to as “BTMs,” are standalone kiosks
that convert cash to crypto.
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FDIC to launch Banker Engagement Site
Posted Date: Tuesday, September 12, 2023
The Federal Deposit Insurance Corp. (FDIC) will launch a new
Banker Engagement Site (BES) through FDICconnect to provide a secure
portal through which financial institutions may exchange documents, information
and communications for consumer compliance and Community Reinvestment Act
examinations.
BES is being introduced as the primary tool for exchanging
materials used by the Division of Depositor and Consumer Protection for
examination planning, according to a release by the FDIC.
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Freedom Mortgage to add 3,000 staffers
Posted Date: Monday, September 11, 2023
Freedom Mortgage, one of the nation’s largest full-service
non-bank mortgage companies and a leader in VA and government-insured lending, recently
announced plans to add 3,000 mortgage professionals and support staff over the
next six months. The company explained in a press release that the additional
staff is needed to help meet increasing demand for mortgage refinancing and
loan servicing.
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CFPB sues nonbank lender for illegal loan-churning
Posted Date: Friday, September 8, 2023
The Consumer Financial Protection Bureau recently sued a nonbank, high-cost installment lender and several of its subsidiaries for unlawful loan-churning practices that often targeted older Americans and single-parent wage earners with low or fixed annual incomes.
Although high-cost loan borrowers make up just under 10 percent of the company’s total borrower population, their refinances generate 40 percent of the company’s net revenue.
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SEC orders first settlement for marketing rule violation
Posted Date: Friday, September 8, 2023
In the agency’s first enforcement action involving its “marketing rule” pertaining to cryptocurrencies, the Securities and Exchange Commission (SEC) ordered a fintech investment advisory firm to pay a $1 million settlement for allegedly misleading investors about performance metrics.
Additionally, the SEC found other compliance issues present in the company’s business practices, which led to misleading disclosures about the custody of clients’ cryptocurrency assets.
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Fed orders Kansas bank to address operational deficiencies
Posted Date: Friday, September 8, 2023
The Federal Reserve Board issued a cease-and-desist order
against a Kansas-based bank and its subsidiary, citing numerous operational deficiencies
discovered during an examination in October 2022.
The order directs the bank to submit plans to improve in
areas related books and records, capital, compliance with anti-money laundering
regulations, credit risk management, earnings, information technology and
information security, interest risk management, internal controls, lending and
credit administration, liquidity and funds management, staffing and third-party
risk management.
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Agencies seek feedback on ‘living wills’ for non-GSIB banks
Posted Date: Friday, September 8, 2023
The Federal Deposit Insurance Corp. and Federal Reserve are
seeking public input on proposed guidance to further develop resolution plans,
also known as “living wills,” for certain financial institutions with more than
$250 billion in total assets.
The proposed guidance seeks to address key areas of
potential vulnerability for bank holding companies and foreign banking
organizations, classified as Category II and III banking organizations under
Title I of the Dodd-Frank Act.
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Warren to Powell: Stop wasting time, implement new Basel III rules
Posted Date: Friday, September 8, 2023
In a letter to Federal Reserve Board Chair Jerome Powell, Sen. Elizabeth Warren (D-Mass.) urged the Fed to resist bowing to industry pressure to curtail proposed rules aimed at strengthening capital standards for the nation’s largest financial institutions.
Warren’s concern stems, in part, from comments in Powell’s opening statement prior to the Fed’s vote to advance the proposed rules, during which he expressed his intent to consider “potential modifications to the proposals.”
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ICE gets regulatory green light for acquisition of Black Knight
Posted Date: Tuesday, September 5, 2023
After the deal was announced 16 months ago, Intercontinental Exchange, Inc. (ICE) can finally move forward with its acquisition of Black Knight.
The two companies secured a settlement with the Bureau of Competition of the Federal Trade Commission, which had initially tried to block the deal over antitrust concerns, after agreeing to some concessions.
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Credit repair companies reach $2.7B settlement with CFPB
Posted Date: Tuesday, September 5, 2023
Following a court ruling, the Consumer Financial Protection Bureau settled with some of the largest credit repair brands in the country over violations of the Telemarketing Sales rule.
The stipulated settlement imposes a $2.7 billion judgment against the companies and bans them from telemarketing credit repair service for 10 years.
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Freddie Mac auctions off $628M in non-performing loans
Posted Date: Tuesday, September 5, 2023
Freddie Mac announced a $628 million non-performing loan (NPL) sale through an auction of seasoned non-performing residential first lien loans held in Freddie Mac’s mortgage-related investments portfolio.
The NPLs are being marketed through two standard pool offerings and two extended timeline pool offerings.
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Guild Mortgage acquires First Centennial Mortgage
Posted Date: Tuesday, September 5, 2023
San Diego-based Guild Mortgage acquired family-owned First Centennial Mortgage, based in Illinois. First Centennial includes 15 branches and nine satellite offices in 17 states primarily in the Midwest.
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Fed chair warns inflation fight not over
Posted Date: Tuesday, September 5, 2023
In a highly anticipated speech at the economic policy symposium in Jackson Hole, Wyo., Federal Reserve Chair Jerome Powell said inflation “remains too high” and that the Fed is “prepared to raise rates further if appropriate.”
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