News By Edition

The Biden Administration released its fall 2022 regulatory agenda outlining the regulations that have seen some advancement through the rule-making process. In it are a significant number of mortgage- and lending-related regulations intended to aid borrowers, increase efficiencies, and increase cybersecurity protections, which are expected to see finalized rules this year. Read on for more details.

Christine Wilson, the lone Republican commissioner at the Federal Trade Commission (FTC), announced intentions to resign her position. In the opinion piece announcing her resignation, she criticized the FTC chair of “abuses of government power” as the FTC has worked to restrict mergers and prohibit use of noncompete clauses in contracts. Read on for more details.

The latest National Defense Authorization Act, which was signed into law in December 2022, included the Fair Hiring in Banking Act, which modified section 19 of the Federal Deposit Insurance Act. Section 19 restricts certain individuals with criminal records from attaining employment with financial institutions. These modifications further narrow the convictions which constitute a bar to employment and reduce the time after some convictions before an individual can seek employment in the financial sector. Read on for more details.

The U.S. Securities and Exchange Commission announced charges against Singapore-based Terraform Labs PTE Ltd and its CEO for the orchestration of a “multi-billion-dollar crypto asset securities fraud involving an algorithmic stablecoin and other crypto asset securities.” Since a South Korean court issued an arrest warrant for Kwon in September 2022, his location has remained unknown. Read on for more details.

The Mortgage Bankers Association’s Builder Application Survey data showed a decrease in mortgage applications for new home purchases for the month of January compared with one year earlier. Read on for more details.

A new report from Fitch Ratings found that U.S. bank earnings in the fourth quarter of 2022 declined year-over-year as banks continued to build loan loss reserves. Read on for more details.

President Joe Biden announced his nomination for director of the National Economic Council. Read on for more details.

A group of 54 nonprofit and community groups, led by the California Reinvestment Coalition, wrote a letter to the Federal Deposit Insurance Corp. expressing concerns that the acquisition of Luther Burbank Savings by Washington Federal Bank may create fair housing and other systemic risks. Read on for more details.

In September 2022, the Commodity Futures Trading Commission (CFTC) filed a complaint in federal district court in San Francisco against Ooki DAO, a decentralized autonomous organization, alleging violations of the Commodity Exchange Act and CFTC Regulations. Supporters of Ooki DAO asserted in an amicus brief the CFTC could not bring a complaint against Ooki DAO because it is not an entity. The court disagreed. Read on for more details.

Detroit-based Rocket Co., which operates Rocket Mortgage, Rocket Homes, Rocket Loans and Rocket Money, announced its CEO plans to retire. Read on for more details.

Better .com announced it is providing prospective borrowers a mortgage commitment letter stating their preapproval in as little as one day. Read on for more details.

Senate Committee on banking, housing, and urban affairs chair Sherrod Brown (D-Ohio) and Ranking Member Tim Scott (R-S.C.) announced the subcommittees and members for the 118th Congress. Read on for more details.

loanDepot founder Anthony Hsieh resigned as executive chairman amidst a proxy fight over a bid to add the CEO of Williston Financial Group to the company’s board of directors. Hsieh announced he intends to use the voting power of his majority stake in the company to force the addition to the board. Read on for more details.

The Consumer Financial Protection Bureau hosted the Appraisal Subcommittee’s first public hearing to discuss issues relating to appraisal bias. Testimony from experts offered insight from scholars, appraisers, economists, and consumers on the issues permeating the industry and recommendations they had to help rectify some of the problems. Read on for more details.

The Department of the Treasury released a report on the potential benefits and challenges associated with the increasing use of cloud computing technology by financial services firms. The report warns that without sufficient cybersecurity, staff support, and visibility, cloud computing may present significant risks to firms and consumers. Read on for more details.

NBA owners voted last week to approve the sale of the Phoenix Suns to United Wholesale Mortgage (UWM) CEO Mat Ishbia and his brother. Cleveland Cavaliers owner, and Rocket Co. Chairman, Dan Gilbert abstained from the vote. Read on for more details.

The Securities and Exchange Commission, Division of Examinations announced its examination priorities for 2023. The division publishes its examination priorities on an annual basis to provide insight into its risk-based approach, highlighting areas it believes pose risks to investors and the overall integrity of the U.S. markets. Read on for more details.

President Joe Biden dedicated portions of his State of the Union speech last week to call on Congress to help pass legislation that would increase access to affordable housing. Read on for more details.

The Federal Housing Finance Agency announced updates to Fannie Mae’s and Freddie Mac’s loan level price adjustment matrices which are intended to help borrowers with lower interest rates afford the cost of larger loans. To offset this, previous discounts for borrowers with higher credit scores have been decreased, causing disapproval from mortgage professionals and industry groups. Read on for more details.

At an event hosted by Brookings Institution entitled “Too big to manage?” Acting Comptroller of the Currency Michael Hsu stated it might be necessary to break up banks unable to comply with federal law. Hsu said “too-big-to-manage” banks can cause control failures, risk management breakdowns, and negative surprises to occur too frequently. Read on for more details.

The Federal Reserve Board denied Custodia Bank’s application for membership to the Federal Reserve system. The bank’s application has been the focus of attention for many in the crypto and banking sectors as it attempted to become the first crypto bank to receive recognition from the Fed. Read on for more details.

First Internet Bank announced in its fourth quarter 2022 earnings report it will exit its consumer mortgage business during the first quarter of 2023. Read on for more details.

A man was sentenced in federal court for a mortgage fraud scheme involving at least two dozen fraudulent loan transactions and over $4 million in losses to lenders. Read on for more details.

The Securities and Exchange Commission unanimously voted to re-propose a rule which prohibits conflicts of interest in certain securitized transactions as part of section 621 of the Dodd-Frank Act. The rule was previously submitted, but never finalized, in 2011. Read on for more details.

In Director Rohit Chopra’s continued efforts to reduce and eliminate fees paid by consumers, the Consumer Financial Protection Bureau announced its latest notice of proposed rulemaking which seeks to significantly reduce the fee applicable to late payments. Though the current iteration of the rule specifically targets credit card late payment fees, it is clear that that is not where Chopra intends to stop. Read on for more details.

The Consumer Financial Protection Bureau (CFPB) filed its response to Consumer Financial Services Association of America’s (CFSA) oppositional brief to the petition requesting review of the Fifth Circuit’s decision finding CFPB’s funding structure was an unconstitutional violation of the appropriations clause. The CFPB refuted CFSA’s argument that the court should not consider the appropriations clause issue. Read on for more details.

During the first committee meeting of the 118th Congress, House Committee on Financial Services Chair Patrick McHenry (R-N.C.) and Ranking Member Maxine Waters (D-Calif.) announced the members appointed to each of the committee’s six subcommittees for the new term. The oversight and legislative jurisdiction of the committees was also announced in a press release prior to the meeting. Read on for more details.

New York Community Bank announced in its 2022 fourth quarter earnings report that it would be closing a majority of its retail mortgage business as part of rightsizing processes following the finalization of its acquisition of Flagstar Bank. Read on for more details.

The Federal Reserve announced, following its Jan. 31 – Feb. 1Federal Open Market Committee meeting, an increase to the federal funds rate by 25 basis points. Federal Reserve Chair Jerome Powell described early data from 2023 as indicative of “the early stages of disinflation.” Read on for more details.

The Federal Housing Administration (FHA) is expanding and enhancing its set of loss mitigation options used to help borrowers struggling to make payments on their FHA-insured mortgages. These expansions are derived from loss mitigation options made available during the COVID-19 pandemic. Read on for more details.

Five banking trade groups sent a letter to the Consumer Financial Protection Bureau (CFPB) warning it that its recent advanced notice of proposed rulemaking concerning credit card penalty fees and late payments would have an adverse impact on small businesses. The groups are requesting the CFPB comply with the Small Business Regulatory Enforcement Fairness Act of 1996 by convening a panel of small businesses that might be affected by the new rule. Read on for more details.

The Biden-Harris Administration announced new actions intended to “increase fairness in the rental market and further principles of fair housing.” These actions are part of the new “Blueprint for a Renters Bill of Rights” which was unveiled concurrent with the announcement of the administration’s latest actions. The Blueprint established a set of principles to drive action by the federal, state and local governments, as well as the private sector, to strengthen tenant protections and encourage rental affordability. Read on for more details.

In recent posts and data from the Conference of State Bank Supervisors (CSBS) Chief Economist Thomas Siems, 96 percent of community bankers responded to a recent survey indicating that they believed the U.S. economy is already in the midst of a recession. According to CSBS’s community bank sentiment index, community bankers’ pessimism at the end of 2022 was the second worst since the index began. Read on for more details.

Recent data from Black Knight revealed that, nationwide, both mortgage delinquencies and foreclosure starts increased in the final month of 2022. Both are still significantly lower than one year prior. Read on for more details.

The California Department of Financial Protection and Innovation announced it entered into a settlement agreement with Nexo Capital to resolve its securities enforcement action in connection to Nexo’s Earn Interest Product program. Read on for more details.

Congressional Democrats have announced the minority members of the House Committee on Financial Services for the 118th Congress. Read on for more details.

The Consumer Bankers Association sent a letter to the Consumer Financial Protection Bureau (CFPB) outlining specific recommendations to deliver a “well-founded, durable” Section 1033 rule. Section 1033 of the Dodd-Frank Act authorizes the CFPB to engage in rulemaking and enforcement regarding the security and accessibility of consumers’ personal financial data. The CFPB announced last year it had begun preliminary rulemaking procedures to promulgate a Section 1033 rule. Read on for more details.

A Texas federal court dismissed a class action suit against Opportunity Financial, LLC which alleged the fintech violated Texas usury law by charging interest on loans it made through a partnership with a state-chartered bank at rates above the maximum rate permitted by Texas law. The court adopted the report and recommendations of the magistrate judge which advised the complaint to be dismissed with prejudice. Read on for more details.

The National Community Reinvestment Coalition (NCRC) sent its 2023 policy agenda to the 118th Congress. NCRC, which works with federal, state, and local agencies, non-profits, and private organizations to promote equitable and fair housing law and policies, is calling on the new Congress to do more to support low- and moderate-income communities. Read on for more details.

Recent data from Mortgage Bankers Association’s Purchase Applications Payment Index found the national median payment applied for by applicants decreased in December. Read on for more details.

According to data from S&P Global Market Intelligence, banking sector mergers and acquisitions activity reached its lowest level in the past five years in 2022, even lower than pandemic-affected 2020. Read on for more details.

President Joe Biden announced his nomination for director of the Treasury Department’s Office of Financial Research. The nomination already received a negative response from congressional Republicans. Read on for more details.