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News By Edition
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Dodd Frank Update Monthly Edition
Dodd Frank Update April 2020
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Task force tackling industry disruption
Posted Date: Tuesday, March 24, 2020
Ed Delgado, the president and CEO of Five Star Global, LLC, has been on the phone a lot of late. In a break between conversations, Delgado found time to talk with Dodd Frank Update about a new task force being formed to address mortgage industry issues surrounding the coronavirus.
“It’s more information than we’re capable of disseminating – it’s light speed at this point,” Delgado said.
Read on for more details about the new task force and how it is preparing to handle business changes from the industry disruptions caused by the virus.
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FDIC, NCUA warn of scams, reassures safety of deposits
Posted Date: Wednesday, March 18, 2020
The Federal Deposit Insurance Corp. (FDIC) and National Credit Union Administration are warning consumers of recent scams. The FDIC said imposters have been pretending to be agency representatives to perpetrate fraudulent schemes.
The scammers, taking advantage of unprecedented times, might provide false information to consumers regarding the security of their deposits or their ability to access cash.
Read on for more details from the regulator’s warnings.
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Fed moves will boost economy, MBA says
Posted Date: Tuesday, March 17, 2020
Looking at potential disruption to the flow of credit to households and businesses, the Federal Reserve took emergency actions this week to help markets function smoothly.
That includes a lowering of the federal funds rate, a commitment to buy $700 billion of securities, and a backstop for the discount window to encourage institutions to access any funding they might need.
Read on for details of the Fed’s moves, along with reaction from the Mortgage Bankers Association on the impact to the mortgage industry.
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Regulators push further relief for industry
Posted Date: Tuesday, March 17, 2020
Two days after stating banks should use their capital and liquidity buffers to help fund households and businesses as credit tightened, federal financial regulators went one step further.
The agencies announced they would institute a technical change to phase in, as intended, automatic distribution restrictions gradually, if a firm’s capital levels were to decline. The Federal Reserve also announced actions to support the commercial paper market.
Read on for more details from the regulators.
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Report finds increase in digital banking users
Posted Date: Tuesday, March 17, 2020
Digital banking users are expected to soar over the next four years, according to a new report from Juniper Research.
The report, Digital Banking: Banking-as-a-Service, Open Banking & Digital Transformation 2020-2024, found significant growth, driven by growth in digital-only banks and an ongoing focus on digital transformation by established bank brands.
Read on for more details from the report and who it found are banking leaders in digital innovation today.
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States offer work from home relief for MLOs
Posted Date: Tuesday, March 17, 2020
As business processes have changed in the past week, with federal and state health officials issuing guidance and orders concerning public health, a number of mortgage loan officers have been asked to work from home or the process is being considered.
Many states have different rules on allowing loan officers to work from home when their home is not considered a branch office under regulations. But state banking and financial institution regulators have issued guidance in the past week or more on how to comply with standards and while working from home.
Read on for details and examples from some state regulators of their guidance.
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Moody’s expresses caution on FHLB membership change
Posted Date: Tuesday, March 17, 2020
A recent announcement by the Federal Housing Finance Agency, seeking input on potential expansion to the membership of the Federal Home Loan Banks system, would be a negative for the system but a positive for nonbank mortgage companies, Moody’s said in a report.
The FHLB system is a cooperative of 11 regional banks, and the request from FHFA was on the possibility of expanding membership in the system to nonbank institutions.
Read on for more details from the report.
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State Farm to exit banking
Posted Date: Tuesday, March 17, 2020
State Farm Bank announced that it would be winding down operations, with State Farm changing strategy to exit the banking industry.
As part of the divestment, State Farm announced a strategic alliance with U.S. Bank, with the bank assuming State Farm’s deposit and credit-card accounts.
Read on for more details from the announcement and reaction from the executive leadership of both companies.
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CFPB updates responsible conduct bulletin between enforcements
Posted Date: Friday, March 13, 2020
In between issuing a pair of enforcement actions against banks which appeared to take proactive steps to remediate customer harm alleged by the Consumer Financial Protection Bureau (CFPB) in lawsuits, the agency announced it was updating guidance on self-reporting.
The CFPB issued an update to its 2013 bulletin which identified several activities that individuals or businesses could engage in that could prevent and minimize harm to consumers, referring to these activities as “responsible conduct.”
Read on for details of the updated bulletin, as well as reaction from the industry.
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Hood discusses regulatory relief for credit unions
Posted Date: Friday, March 13, 2020
National Credit Union Administration (NCUA) Chairman Rodney Hood recently addressed the CUNA Governmental Affairs Conference for the first time in more than a decade.
He focused a good portion of his address on regulatory work NCUA has been involved with since he took over as chairman nearly a year ago.
Read on for details from his address, and how the chairman wants NCUA to provide relief to institutions, particularly in under-served rural areas.
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Trade associations urge Congress not to tap G-fees
Posted Date: Friday, March 13, 2020
A host of more than 30 industry trade associations, including the Mortgage Bankers Association and National Association of Realtors, wrote congressional leaders to urge them not to tap into guarantee fees from Fannie Mae and Freddie Mac during appropriations work as a source of funding offsets.
“As representatives of institutions that span the entire housing finance ecosystem, we firmly believe that G-fees should only be used as originally intended: as a critical risk management tool to protect against potential mortgage credit losses,” the associations wrote.
Read on for more details from the letter.
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Black Knight adds appraisal technology company
Posted Date: Friday, March 13, 2020
Black Knight Inc. recently announced that it had acquired Collateral Analytics, an appraisal technology company focused on automated valuation models, collateral and mortgage risk tools.
Black Knight CEO Anthony Jabbour said the companies will provide greater and faster access to information clients need. “Black Knight and Collateral Analytics are a natural fit,” he said.
Read on for details of the acquisition and the future of Collateral Analytics’ leadership.
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Credit union profits soar nearly 9 percent
Posted Date: Friday, March 13, 2020
Credit unions reported higher profits in the fourth quarter of 2019, according to data from the National Credit Union Administration (NCUA).
In NCUA’s Quarterly Credit Union Data Summary, the regulator reported the industry posting profits of $14.1 billion in the fourth quarter, up 8.8 percent from a year earlier.
Read on for more details from the agency’s report.
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Bankers meet with president at White House
Posted Date: Friday, March 13, 2020
Looking for guidance and ideas on the state of the economy, President Donald Trump recently hosted a group of banking executives and trade association representatives at the White House to gather feedback.
“We are having a meeting — a very important meeting — with the, I would say, the greatest bankers in the world, the most important banks in the world, financial centers, and having a good discussion,” the president said.
Read on for details from the meeting and reaction from trade association leaders who attended.
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Moody’s cites tech ability to help non-QM quality
Posted Date: Tuesday, March 10, 2020
A recent Moody’s report found that lenders who have weakened underwriting practices in non-qualified mortgage lending have brought risk into the market for non-prime residential mortgage-backed securities.
However, the agency said there are ways for lenders to mitigate the risks as underwriting criteria varies – notably, the use of technology to help the quality control process.
Read on for details of the risks and the ways in which Moody’s says lenders can improve quality in their non-QM lending programs.
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Fifth Third confident it ‘treated its customers fairly’
Posted Date: Tuesday, March 10, 2020
In echoes of a recent action taken by the Consumer Financial Protection Bureau against Citizens Bank, Fifth Third Bancorp came out with a strong public statement refuting the allegations by the bureau filed in a lawsuit Tuesday.
The same day the CFPB announced it was filing suit against Fifth Third – which the bank announced earlier in a Securities and Exchange Committee filing – Fifth Third Legal Officer Susan Zaunbrecher issued a strong defense of the institution.
Read on for more from Fifth Third, and how the response to the action mirrors the Citizen Bank lawsuit.
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NCUA board members talks medallions, bank squabbles
Posted Date: Tuesday, March 10, 2020
At the recent Governmental Affairs Conference hosted by the Credit Union National Association in Washington, National Credit Union Administration board member Mark McWatters took the opportunity to directly address the sale of the agency’s taxi medallion loan portfolio – a move met by harsh criticism in some of the New York area.
He also discussed the recent feuding between the community banking and credit union industries, saying working together in good faith with mutual respect for the other would reflect strength, not weakness.
Read on for details from McWatters’ speech.
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ICBA president preaches collective work
Posted Date: Tuesday, March 10, 2020
As the Independent Community Bankers of America (ICBA) opened its annual conference in Orlando, Fla., President and CEO Rebeca Romero Rainey told attendees they had the power to benefit local communities around the country.
But she explained that the power to benefit communities was at its strongest when the community bankers worked together.
Read on for details from Romero Rainey’s opening remarks at ICBA Live.
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Wells board chairwoman resigns
Posted Date: Tuesday, March 10, 2020
Two days before they were scheduled to appear before the House Financial Services Committee, Wells Fargo Chairwoman of the Board Elizabeth Duke and board member James Quigley announced their resignations.
The moves come on the heels of the release of a Financial Services Committee majority report on Wells Fargo’s conduct since the sales practices enforcement action of 2016. The committee chairwoman told reporters last week that she would call for the resignation of Duke and Quigley.
Read on for more details, including the new board chairman for the bank.
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Federal regulators update coronavirus action
Posted Date: Tuesday, March 10, 2020
Federal financial regulators have issued two statements to institutions regarding their handling of situations regarding the coronavirus.
The statements address both the potential of handling a pandemic, as well as specific guidance surrounding the effect of the virus on customers of institutions as well as its own staff.
Read on for details of what regulators are telling institutions.
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Sullivan joins ICBA as VP, congressional relations
Posted Date: Friday, March 6, 2020
The Independent Community Bankers of America (ICBA) announced that Susan J. Sullivan has joined as vice president of congressional relations. In this role she will help advocate ICBA’s pro-growth regulatory relief agenda for community banks as outlined in its Community Focus 2020 regulatory and legislative policy platform.
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Altisource report predicts return of big banks
Posted Date: Thursday, March 5, 2020
Altisource Portfolio Solutions released its latest “State of the Originations Industry” report, with the most notable prediction from respondents being the re-emergence of big banks in the mortgage market over the next two to three years.
The survey found more than 80 percent of respondents said growing costs for origination would drive out smaller lenders and provide opportunities for big banks to retake market share.
Read on for more details from the company’s annual report.
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Fifth Third faces CFPB action
Posted Date: Thursday, March 5, 2020
Fifth Third Bank has been told that it will face an enforcement action from the Consumer Financial Protection Bureau, according to a filing from the bank with the Securities and Exchange Commission.
Fifth Third said the bureau has informed the company that the action involves opening unauthorized accounts, similar to the Wells Fargo sales practices cited by the bureau in 2016.
Read on for more details about the disclosure by the bank.
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CFPB agrees to move on 1071 rulemaking
Posted Date: Thursday, March 5, 2020
The Consumer Financial Protection Bureau has reached a settlement with Democracy Forward and Hagens Berman Sobol Shapiro LLP in a lawsuit challenging the bureau’s inaction on promulgating rulemaking surrounding small-business lending data collection.
The settlement will require public release of proposal outlines by September 2020, along with court-mandated status reports every 90 days on rulemaking progress.
Read on for more details of the settlement surrounding small-business lending data collection.
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Picking a tech vendor based on your processes
Posted Date: Thursday, March 5, 2020
The mortgage business is increasingly reliant on technology. For many companies, the most cost-efficient way to increase their tech capabilities is by partnering with a third-party provider, but they don’t always know how to identify the best one to serve their needs.
Armando Falcon, CEO of Falcon Capital Advisors LLC and former director of the Office of Federal Housing Enterprise Oversight (now FHFA), spoke with Dodd Frank Update about vendor management and how his firm helps companies find the best third party providers for them, as did Falcon Managing Director of Digital Mortgage Services Camelia Martin.
Read on for more details from their interview.
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Chase shifts staff to handle mortgage volume surge
Posted Date: Thursday, March 5, 2020
As mortgage rates continue to plunge to record low levels, institutions are finding creative solutions to handle the additional surge of business.
Freddie Mac’s latest Primary Mortgage Market Survey showed the lowest rate in the survey’s history, dating to 1971. JPMorgan Chase announced one way to deal with the surge in business, and that’s to boost staff in its mortgage division.
Read on for more details about how the bank is working to handle increased volume.
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NCUA report finds rate edge for credit unions
Posted Date: Thursday, March 5, 2020
A new report from the National Credit Union Administration’s Office of the Chief Economist found that mortgage loans originated by credit unions generally carried lower interest rates than those from other lenders.
The report looked at Home Mortgage Disclosure Act data from 2018 and segmented that to a sample of 30-year, fixed-rate mortgage loans.
Read on for more details from the report, including the differences among the largest states, and how much the rate differences could save borrowers over the life of their loans.
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Roostify, TD Bank expand partnership
Posted Date: Wednesday, March 4, 2020
Roostify, the nation’s most trusted digital lending platform, announced that TD Bank has added Roostify's home equity solution to the bank’s digital home lending platform.
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Cordray book details his near-firing
Posted Date: Friday, February 28, 2020
In the new book released Monday by Richard Cordray on his time as director of the Consumer Financial Protection Bureau, Cordray’s writing sounds much like his speeches and presentations during his time in office – thought out, straight forward and detailed.
So it comes as no surprise that nearly 200 pages into “Watchdog: How protecting consumers can save our families, our economy, and our democracy” the biggest revelation is mentioned with little buildup.
Read on for details from Cordray’s book, including the never-before-told story of how close he came to being fired.
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Fitch warns new QM standards could weaken rule
Posted Date: Friday, February 28, 2020
Fitch Ratings examined the potential move away from a debt-to-income (DTI) ratio standard in the Consumer Financial Protection Bureau’s qualified mortgage rule and cautioned that changing to a pricing threshold could weaken the rule.
In its analysis, Fitch said borrower protections from aggressive lenders could be harmed by such a change.
Read on for details on why Fitch is cautioning against the replacement of the DTI standard.
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CFPB second in command announces departure
Posted Date: Friday, February 28, 2020
One of the primary leaders of the Consumer Financial Protection Bureau since the departure of Richard Cordray has announced he will leave the bureau.
Brian Johnson, who began as a senior adviser with then-acting director Mick Mulvaney in December 2017, was named acting deputy director in July 2018 and tabbed as the permanent deputy director by Kathy Kraninger in May 2019.
Read on for more details of Johnson’s departure and his next stop.
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Banks record second-highest annual profits in history
Posted Date: Friday, February 28, 2020
In the latest earnings report on the nation’s 5,177 institutions insured by the Federal Deposit Insurance Corp. (FDIC), a challenging interest rate environment in the fourth quarter slowed the pace of profit growth, but still led to the second-highest annual profits in banking history.
“The banking industry remains strong,” FDIC Chairman Jelena McWilliams said.
Read on for details of the report, including the strong performance by the nation’s community banks in 2019.
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New structure announced by Wells
Posted Date: Friday, February 28, 2020
Wells Fargo recently announced it would create a new business organizational structure, which would create five business lines whose CEOs would directly report to Wells Fargo CEO Charlie Scharf.
The announcement coincided with the news that the bank hired Mike Weinbach as the CEO of Consumer Lending in early May.
Read on for more details of the changes and the new hires by Wells Fargo.
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Wells avoids criminal charges with $3 billion fine
Posted Date: Tuesday, February 25, 2020
More than three years after its sales practices were cited in a state and federal enforcement action, Wells Fargo agreed to a settlement with the Department of Justice and the Securities and Exchange Commission which will result in a $3 billion fine, but no criminal charges.
As part of the settlement, Wells Fargo admitted that it collected millions of dollars in fees and interest to which the company was not entitled.
Read on for details, reaction from Wells Fargo, and much more.
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CFPB cites group for deceptive, unfair acts
Posted Date: Tuesday, February 25, 2020
The Consumer Financial Protection Bureau, the South Carolina Department of Consumer Affairs and Arkansas Attorney General Leslie Rutledge have filed a lawsuit accusing several companies of helping to broker contracts that offered high-interest credit to disabled veterans and other consumers.
The case built on several previous bureau actions and charged the defendants with four counts of deceptive acts and one count of unfair acts.
Read on for more details about the latest enforcement action.
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MBA’s Broeksmit details servicing strides at conference
Posted Date: Tuesday, February 25, 2020
At the start of the Mortgage Bankers Association’s Servicing Solutions Conference and Expo in Orlando, Fla., President and CEO Bob Broeksmit told attendees the association stood ready to work for the betterment of the servicing industry.
“It’s time to align servicing standards,” Broeksmit said. “Our message is your message.”
Read on for more details of Brokesmit’s speech from the conference.
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ABA offers feedback on 1071 surveys
Posted Date: Tuesday, February 25, 2020
In response to a review under the Paperwork Reduction Act, the American Bankers Association shared its thoughts on aspects of the surveys used to collect data on small business lending as required by Section 1071 of the Dodd-Frank Act.
The Consumer Financial Protection Bureau is working to gather information in preparation for promulgating rulemaking under Section 1071.
Read on for details of the association’s letter to the bureau.
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FHFA announces advisor, servicing standards
Posted Date: Tuesday, February 25, 2020
It’s been a busy couple of weeks for the Federal Housing Finance Agency (FHFA), which announced a financial advisor to help the process of ending conservatorship for Fannie Mae and Freddie Mac, opened up the process for evaluating new credit score models, updated servicer requirements and realigned the agency’s structure.
FHFA Director Mark Calabria said the hiring of an advisor, in particular, marked a significant milestone.
Read on for more details from the regulator of Fannie Mae and Freddie Mac.
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Equifax offers new mortgage servicing product bundle
Posted Date: Tuesday, February 25, 2020
Equifax Inc. announced the availability of a new Mortgage Servicing Product Bundle. This Servicing Product Bundle is a fully customizable package of Equifax solutions designed to support financial institutions throughout the loan servicing lifecycle.
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MBA names Flood SVP
Posted Date: Monday, February 24, 2020
The Mortgage Bankers Association announced that Michael P. Flood has been named Senior Vice President of Commercial/Multifamily Policy and Member Engagement.
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First fintech purchase of bank draws praise
Posted Date: Friday, February 21, 2020
Last week, LendingClub Corp. made the first move into traditional banking for a fintech company, announcing that it would buy Radius Bank, a Boston-based online bank, for $185 million.
The move comes after failed attempts by fintechs in recent years to secure access to banking through special charters.
Chris Cole of the Independent Community Bankers of America talked with Dodd Frank Update about the announcement and whether the association supports fintechs accessing banking services in this way. Read on for details.
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Supervisory report still without TRID exam information
Posted Date: Friday, February 21, 2020
Once again, the Consumer Financial Protection Bureau declined to discuss any of the findings from its TRID exams in the latest version of its Supervisory Highlights.
In 11 reports since the implementation of the TRID rule, only one has contained any guidance from supervisory findings around TRID – that coming in September 2017.
Instead, the latest version of the report – covering the period from April through August 2019 – tackled payday lending, debt collection, mortgage servicing and student loan servicing.
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Justice Department processor action recalls CFPB work
Posted Date: Friday, February 21, 2020
In a case recalling the Consumer Financial Protection Bureau’s chokepoint crackdown on payment processors, the Department of Justice has filed for temporary restraining orders against five companies and three individuals allegedly responsible for carrying hundreds of millions of fraudulent robocalls to American consumers.
The calls, most of which originated in India, led to massive financial losses to elderly and vulnerable victims across the nation.
Read on for more details of the lawsuits filed, and how the actions are similar to those taken by the bureau from 2013-2015.
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Black Knight buys Quicken servicing software
Posted Date: Friday, February 21, 2020
In a move which the companies said expanded their partnership, Black Knight has bought servicing customer relationship management software which Quicken Loans had developed in-house.
The software source code provides a number of tools which will serve as the foundation for a highly advanced customer service solution that Black Knight will be offering to clients of its industry-leading MSP servicing system, the companies said.
Read on for more details about the expanded partnership.
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CFPB talks consumer access to data
Posted Date: Friday, February 21, 2020
The Consumer Financial Protection Bureau (CFPB) announced that it will hold a symposium on Consumer Access to Financial Records and Section 1033 of the Dodd-Frank Act.
The CFPB’s data access symposium is intended to elicit a variety of perspectives on the current and future state of the market for services based on consumer-authorized use of financial data.
Read on for more about the event, which will feature remarks by CFPB Director Kathy Kraninger.
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Fannie, Freddie report strong finishes to 2019
Posted Date: Friday, February 21, 2020
The strong housing market in 2019 lifted business for both Fannie Mae and Freddie Mac, the companies recently reported.
In calls with media, the CEOs from both companies discussed their positive finish to the year, as well as the work they are doing in digital transformations around the mortgage transaction.
Read on for details from the company’s reports.
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