News By Edition

As numerous enforcement actions citing companies’ efforts to remediate harmed consumers and self-report legal violations have come to light since Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger took office, there is growing evidence demonstrating that it pays for companies to speak up when they spot a problem rather than waiting for examiners to find it.

Goodwin Procter LLP Partner Tony Alexis, former CFPB head of enforcement, and Morrison & Foerster Counsel Kathleen “Kitty” Ryan, former CFPB deputy assistant director for regulations, explained why taking such steps can be beneficial to companies.

Find out more details about what the two industry experts had to say.

With the Federal Housing Finance Agency’s (FHFA) recent decision to temporarily put the brakes on the implementation of the new Uniform Residential Loan Application (URLA) issued by Fannie Mae and Freddie Mac Dodd Frank Update reached out Garris Horn PLLC Managing Member Richard Horn to find out what revisions the agency is likely to make to the address industry concerns.

The most likely element to be revised in the new form, also known as Fannie Mae’s Form 1003, is its language preference question, which was added by FHFA to identify Limited English Proficiency (LEP) consumers. Horn noted that the question presents a multitude of risks for lenders.

Find out how many types of risks can be associated with just one question.

After months of preparing for the launch of the optional use period for the redesigned Uniform Residential Loan Application (URLA) form, commonly known as the 1003 form, and corresponding datasets, industry participants will have to shift into a holding pattern.

The Federal Housing Finance Agency (FHFA) recently stipulated that the period would not begin July 1 as previously scheduled and indicated that the form will be revised, with an updated version to be revealed at a later date.

Find out what questions remain prevalent around the new forms.

The Consumer Financial Protection Bureau (CFPB) recently settled with Student CU Connect CUSO, LLC (CUSO), a company established to hold and manage private loans for students at ITT Technical Institute, for allegedly engaging in unfair and deceptive actions.

Forty-four states and the District of Columbia also settled with CUSO under the same terms.

Learn what tactics the bureau cited in its complaint and stipulated judgment.

The results of the Federal Reserve’s 2019 Dodd-Frank Act stress test (DFAST) indicated that the nation’s largest bank holding companies are well-equipped to handle a severe financial downturn should one occur.

The number of firms participating in the 2019 DFAST is roughly half the number that participated in 2018, thanks to the passage of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) in May 2018.

Find out more details about the first half of the latest stress test results.

Newly finalized amendments to Regulation CC, implementing the rule for the Expedited Funds Availability Act, will change the method for calculating periodic inflationary dollar-amount adjustments.

The Federal Reserve and the Consumer Financial Protection Bureau (CFPB) jointly adopted a method for making inflationary adjustments to the dollar amounts in Reg CC every five years, pursuant to the Dodd-Frank Act.

Learn more details about the new rule.

The wait is over for two nominees to senior posts at the Department of Housing and Urban Development (HUD) who were confirmed by the Senate after waiting a combined 37 months from nomination to confirmation.

The Senate confirmed Hunter Kurtz as HUD’s assistant secretary of public and Indian housing and Seth Appleton as assistant secretary of policy development and research (PD&R). President Donald Trump first nominated Kurtz in September 2017 and Appleton in February 2018.

Find out more about the newly confirmed officials.

CyberScout, which specializes in identity theft resolution, data defense and employee benefits services, recently appointed Jennifer Leuer as its new CEO, effective June 24, 2019. Leuer joins CyberScout from Experian where she served as president of Partner Solutions, according to a press release.

The Senate has unveiled draft legislation addressing Bank Secrecy Act and anti-money laundering reforms.

The bipartisan bill would improve corporate transparency, strengthen national security, and help law enforcement combat illicit financial activity being carried out by terrorists, drug and human traffickers and other criminals, according to a release from its sponsors. 

Read on for details and reaction from the bill’s bipartisan sponsors.

A group of four trade organizations representing financial and housing industry professionals recommended that the Federal Housing Administration (FHA) rescind or amend loan-level certification requirements to alleviate concerns about liability exposure.

The trades wrote in response to the Department of Housing and Urban Development’s (HUD) request for feedback on proposed changes to FHA’s certification requirements and to its defect taxonomy.

Find out what alternatives the organizations offered in their joint comment letter.

Attempting to align effective dates and transition requirements with its current expected credit loss (CECL) standard, the Financial Accounting Standards Board (FASB) recently voted to move forward with technical changes to the requirements.

The board also finalized changes to address stakeholder concerns about negative allowances on purchased financial assets with credit deterioration (PCD) and negative allowances on available-for-sale debt securities.

Learn more about the latest updates.

The Federal Housing Administration (FHA) will not back mortgages for Deferred Action for Childhood Arrivals (DACA) benefit recipients, the Department of Housing and Urban Development (HUD) announced.

HUD Assistant Secretary for Congressional and Intergovernmental Relations Len Wolfson ended months of speculation on the matter with a letter to Rep. Pete Aguilar (D-Calif.).

Find out more details about the letter and the policy in question.

Honesty and transparency appear to be growing more and more important to consumers whose trust in institutions to safeguard their personal information constantly is being tested by news of hackers breaching companies’ data servers.

The fact that many entities wait weeks or even months to inform consumers their data has been exposed only compounds that lack of trust.

Read on to get more insights from the survey results.

The 15th edition of the National Settlement Services Summit (NS3) got off to a terrific start Tuesday as Acting Deputy Secretary, and Federal Housing Administration (FHA) Commissioner and Assistant Secretary for Housing of the U.S. Department of Housing & Urban Development (HUD) Brian Montgomery, highlighted many topics and issues with important updates for everyone within the real estate transaction business.

The day also featured independent underwriter and regulator panels, as well as a regulatory compliance session.

Read on for a few details of what Montgomery shared with the audience, as well as what transpired from the other opening day sessions.

For the eighth year, October Research, LLC, presented its annual awards for leadership, innovation and philanthropy, with some of the brightest stars in the title industry recognized for their efforts.

CEO and Publisher Erica Meyer presented the awards Wednesday at the 15th annual National Settlement Services Summit (NS3) in Phoenix.

Read on for details on the winners and their accomplishments.

Summer may be in its early stages, but Phoenix-area youths know the next school year is around the corner, and attendees at the National Settlement Services Summit (NS3) took time Tuesday to give them a hand.

The eighth annual “Make a Child Smile” community service event, sponsored by Adeptive Software, saw attendees put together book bags with school supplies to help for foster children through Arizona Helping Hands.

Read on for details from the event.

Federal Housing Finance Agency (FHFA) Director Mark Calabria’s request that Congress grant the agency the authority to charter new government-sponsored guarantors is one of the agency’s few housing finance reform proposals opposed by community bankers.

Ron Haynie of the Independent Community Bankers of America (ICBA) told Dodd Frank Update that although the trade group supports other provisions of FHFA’s 2018 Annual Report to Congress, community bankers generally do not support Calabria’s request for the FHFA to be granted chartering authority.

Learn what reasons Haynie offered for ICBA’s position.

The Independent Community Bankers of America (ICBA) formed a task force to investigate the impact to public funds when large credit unions acquire community banks, citing statistics that such transactions have resulted in millions of dollars in lost annual taxpayer revenue.

One credit union trade leader responded, asserting that ICBA’s claims lack merit.

Find out more about the dispute.

Wells Fargo recently named Debra Chrapaty its new chief technology officer, making permanent a role she had held in an acting capacity since May. She will continue reporting directly to Saul Van Beurden, head of Technology at Wells Fargo.

The National Settlement Services Summit (NS3) marks its 15th anniversary this week by heading further west than it ever has. In the Valley of the Sun, the largest crowd yet will gather to hear from the best the industry has to offer over three days at the Arizona Biltmore in Phoenix.

More than 700 attendees representing 340 companies – both records for NS3 – will get to hear from a pair of keynote speakers, a Fireside Chat between title and banking icons, and 59 presenters on subjects affecting all parties in the real estate transaction.

Read on for a preview of what’s to come this week.

More than four years after the nation’s largest mortgage lender was charged with employing improper origination and underwriting practices when issuing loans backed by the Federal Housing Administration (FHA). Quicken Loans Inc. has agreed to a $32.5 million settlement the Department of Justice (DOJ) and the Department of Housing and Urban Development (HUD).

With the matter settled, Quicken indicated it plans to expand its FHA lending operations while strengthening its relationships with regulators.

Learn more details about the settlement and the case.

The Federal Housing Finance Agency (FHFA) requested the legislative ability to charter competitors of Fannie Mae and Freddie Mac as government-backed guarantors for the secondary mortgage market in its 2018 report to Congress.

The chartering authority FHFA Director Mark Calabria has requested from Congress would be similar to that of the Office of the Comptroller of the Currency.

Find out what recommendations in the report align with industry priorities.

The first event in the Consumer Financial Protection Bureau’s (CFPB) symposia series on various matters affecting the financial regulatory environment, announced in April, has been scheduled.  

The symposium will feature discussion of the meaning of the term “abusive” as it applies to the Dodd-Frank Act’s prohibition against unfair, deceptive or abusive acts or practices.

Learn when and where the event will take place and who has been tapped to speak.

The House and the Senate both have bipartisan pieces of legislation directing the Financial Accounting Standards Board to “stop and study” the economic impacts of the board’s new current expected credit loss standard before it takes effect.

The House bill, introduced by Rep. Vicente Gonzalez (D-Texas), is substantially similar to legislation introduced by Sen. Thom Tillis (R-N.C.) in May.

Find out more about the House bill.

Despite positive recent economic trends, the latest Business Roundtable survey indicated that there is less confidence among many of the country’s CEOs about the future economic outlook than in previous quarters. A report on the survey’s findings attributes the dip in confidence to uncertainties about trade policy and overall global growth.

The Business Roundtable CEO Economic Outlook Index for the second quarter of 2019 showed a drop in the composite measure of CEO projections for sales, capital spending and hiring over the next six months.

Read on to learn more about the findings in the report.

The Consumer Financial Protection Bureau’s (CFPB) proposed debt collection rule includes various safe harbors for individual debt collectors and institutions, many of which were discussed during a recent meeting of the bureau’s Consumer Advisory Board. 

A portion of the discussion focused on safe harbors included in the proposal, as well as suggestions for others that may be appropriate regarding provisions applying to debt validation and communication.

Find out more about what safe harbors in the proposal and what additional ones have been suggested.

Many financial institutions are dreading the day their bank, lender or credit union will be forced to comply with the new current expected credit loss (CECL) standard, created by the Financial Accounting Standards Board (FASB).

Troy Thornton, the Office of the Comptroller of the Currency’s deputy comptroller for the Southern District, believes that despite the concerns he’s heard about CECL’s potential impact, bankers should realize that the new standard could come with some benefits. 

Learn about the potential upside of the new standard.

More than a year after a federal court vacated the Department of Labor’s fiduciary rule, the Securities and Exchange Commission finalized its own set of standards requiring investment advisors to act in their clients’ best interests.

The agency recently approved a package of rulemakings with the goal of enhancing the quality and transparency of relationships retail investors enter into with investment advisers and broker-dealers. 

Find out how the new rules differ from those proposed by DOL. 

Speaking at a meeting hosted by the Community Development Bankers Association, Federal Deposit Insurance Corp. (FDIC) Chairwoman Jelena McWilliams described the agency’s plans for helping community banks sustain the strong growth they have experienced in recent years through certain initiatives.

Among those initiatives are those pertaining to Community Reinvestment Act reform.

Find out more details about the priorities McWilliams highlighted during the meeting.

The banking agencies recently published a final rule to simplify the Basel III regulatory capital calculations for all banks not subject to advanced approaches capital requirements.

The rule also would increase the deduction threshold for mortgage servicing assets, certain deferred tax assets and investments in the capital of unconsolidated financial institutions. 

Learn what the new rule could mean for the majority of banks.

Charged with violating the Home Mortgage Disclosure Act (HMDA) by intentionally reporting inaccurate borrower information to the Consumer Financial Protection Bureau (CFPB), Freedom Mortgage Corp. has been ordered to pay a $1.75 million penalty and update its compliance procedures.

Freedom Mortgage, based in Mount Laurel, N.J., does business nationwide and is among the 15 largest mortgage lenders in the country, having originated more than 50,000 purchase loans each year between 2013 and 2016. 

Find out more details about the matter.

Four months after proposing to rescind and delay compliance with its 2017 payday lending rule’s mandatory underwriting provisions, the Consumer Financial Protection Bureau (CFPB) revealed a final rule amendment to add another year to the proposed delay.

Such delays align with advocacy by banks, credit unions and payday lenders, but have drawn the ire of consumer advocates and Democrats.

Find out more details about the delay and what feedback the bureau has received.

In an effort to make housing more affordable through increased secondary-market competition, the Federal Housing Finance Agency (FHFA) announced the launch of its new Uniform Mortgage-Backed Security (UMBS) program, under which it will combine mortgage-backed securities held by Fannie Mae and Freddie Mac.

The FHFA hopes the move will add liquidity and eliminate pricing differences, spurring service- and efficiency-based competition between the government-sponsored enterprises (GSEs).

Find out more details about what the change might mean for the mortgage market.

Independent mortgage banks (IMBs) and mortgage subsidiaries of chartered banks have seen an upswing in profitability since ending 2018 on a down note.

The Mortgage Bankers Association’s (MBA) latest Quarterly Mortgage Bankers Performance Report this year showed that IMBs saw a net gain of $285 on each loan they originated in the first quarter of 2019, up from a reported $200 loss per loan they saw in the fourth quarter of 2018. 

Read on to learn more.

The Senate voted to confirm Heath Tarbert as the 14th chairman of the Commodities Futures Trading Commission (CFTC) by an 85-9 margin. All nine nay votes were cast by Democrats.

Tarbert joins CFTC from the Treasury Department and will succeed Chairman J. Christopher Giancarlo in July for a term expiring April 13, 2024.

Find out more about his background.

Navy Federal Credit Union recently promoted Anthony “Tony” Gallardy to serve as the company’s new executive vice president and chief information officer, taking over for Bill Hills, who decided to retire after nearly a decade working at the credit union.