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Experts address compliance lessons from Wells
Posted Date: Monday, September 19, 2016
This week’s Senate Banking Committee hearing on the CFPB’s $100 million consent order against Wells Fargo will be the first of several Congressional hearings and other federal probes into the lender’s employee sales incentive programs.
But while many are expecting lawmakers to grill the bank about its illegal conduct, the CFPB could face some tough questions, as well.
Read on to find out what two compliance experts have to say about the regulatory response coming out of this consent order and what kind of changes the financial services industry could ultimately see as a result.
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Could regulators have held Wells execs responsible?
Posted Date: Wednesday, September 14, 2016
The Consumer Financial Protection Bureau (CFPB) has not been shy about using its enforcement authority to hold executives accountable for consumer financial violations, as well as companies.
In the days after announcing a joint settlement against Wells Fargo, the CFPB has been criticized for not holding individuals or executives responsible in its enforcement action.
But could it have? Read on to see whether the bureau and other regulators had the authority to do more.
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Strong reactions across industry to Wells enforcement
Posted Date: Tuesday, September 13, 2016
Voices from throughout the industry have been loud and critical in the days following the settlement between Wells Fargo and regulators over incentive-compensation plans.
Those plans allowed employees to open more than 1 million accounts without consumer authorization.
Read on for more details.
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Fed chair addresses ‘too big to manage’
Posted Date: Friday, September 23, 2016
As Wells Fargo CEO John Stumpf repeatedly reminded the Senate Banking Committee that the 5,300 employees fired for defrauding customers was just 1 percent of one unit of the bank, the issue of whether big banks can be too big to manage has increased.
Fed Chair Janet Yellen got the question in her press conference last week.
Read on to see how Yellen weighed in on the issue.
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Wells case presents opportunity for banks, credit unions
Posted Date: Friday, September 23, 2016
At the recent Senate Banking Committee hearing over Wells Fargo’s practices of opening unauthorized accounts for consumers, Sen. Elizabeth Warren made a pitch for consumers to consider where they should house their money. “Move your accounts over where you can actually trust your banker,” she said.
Community bankers and credit unions are asking whether now is the right time to up their marketing game and draw differences between their business and big banks.
What should you do? Read on for more.
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When does event become ‘material’ for disclosure?
Posted Date: Friday, September 23, 2016
Before PayPal was handed an enforcement action by the Consumer Financial Protection Bureau in May 2015, the investment community knew there was a chance it would happen. How? Because the company disclosed the CFPB’s investigation into its practices as a material event in a quarterly filing with the Securities and Exchange Commission.
But when does a company need to disclose information?
Wells Fargo was asked why it did not disclose the status of its investigation into fraudulent practices before an enforcement action was made public. Read on for details of what makes a “material event.”
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CFPB enforcement reaches back almost 20 years
Posted Date: Tuesday, August 30, 2016
The bureau’s $32.25 million order against First National Bank of Omaha isn’t raising eyebrows for its high price tag or the fact that it coordinated its investigation with the Office of the Comptroller of the Currency. The big takeaway in the CFPB’s latest crackdown on credit card add-on products is that it went all the way back to transactions from 1997 — 14 years before the CFPB opened its doors, and well beyond the three-year statute of limitations that applies to the CFPB’s pursuit of alleged violations of the Consumer Financial Protection Act. How is the CFPB avoiding the statute of limitations in this case and others? Read on to find out.
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CFPB order includes UDAAP compliance outline
Posted Date: Friday, September 16, 2016
Although the Consumer Financial Protection Bureau (CFPB) has for some time scrutinized violations of the Dodd-Frank Act’s prohibition on Unfair, Deceptive or Abusive Acts or Practices (UDAAP), a recent bureau consent order has taken the extra step of requiring a respondent to establish a UDAAP risk-management program.
The CFPB ordered First National Bank to “develop a written, enterprise-wide UDAAP risk-management program for any consumer financial products or services” it offers, potentially signaling its growing interest in pursuing UDAAP violations, in a recent consent order against the bank.
According to one compliance expert, all financial service companies under the CFPB’s oversight would be wise to follow the consent order's model. Read on for details of what the CFPB expects.
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CFPB prevails in first case against online lender
Posted Date: Friday, September 16, 2016
A California court awarded the Consumer Financial Protection Bureau partial summary judgment in its three-year battle against CashCall Inc., a subprime lender accused of using its association with a company located on tribal land as a “shield” against state laws the bureau feels should have applied to the high-interest loans it made to borrowers in several states.
The court also denied CashCall’s motion for summary judgment and held the company’s founder and CEO personally responsible under the Consumer Financial Protection Act.
Read on for the court’s stern analysis of the company’s “tribal lending” model.
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ICBA ‘drawing the line’ with NCUA
Posted Date: Wednesday, September 7, 2016
The Independent Community Bankers of America has filed a lawsuit against the National Credit Union Administration, challenging the agency’s rulemaking on member business lending by credit unions as unlawful and exceeding the reach of the regulator.
The rulemaking by NCUA changed the standards for credit unions on making commercial loans, including dropping the member guarantee requirement and changing the way commercial loans are counted toward statutory limits.
On a conference call, ICBA President and CEO Camden R. Fine made a passionate case for the association’s position and said it “filed a very solid case."
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Does the Safeguards Rule need an update?
Posted Date: Friday, September 16, 2016
As part of its systematic review of all rules and guidelines, the Federal Trade Commission is seeking public comment on the Gramm-Leach-Bliley Act Safeguards Rule, which requires financial institutions under its jurisdiction, and their affiliates and service providers, to establish measures to keep customer information secure. Find out what aspects of the rule the commission believes could use a tweak.
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Banking agencies submit recommendations to Congress
Posted Date: Friday, September 23, 2016
As required by the Dodd-Frank Act, the Federal Reserve, the Federal Deposit Insurance Corp., and the Office of the Comptroller of the Currency last week issued a report to Congress listing several recommendations for how to improve the safety and soundness of banking entities and the U.S. financial system. Here are the agencies’ suggestions.
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Clinton: Wells Fargo makes case for a stronger CFPB
Posted Date: Friday, September 23, 2016
As Wells Fargo CEO John Stumpf prepared to take the hot seat at a Senate Banking Committee hearing last week, Democratic presidential candidate Hillary Clinton had harsh words for him and the bank.
Along the way she affirmed her commitment to bolstering the Consumer Financial Protection Bureau’s ability to protect consumers from unfair and deceptive financial service practices.
Read on to find out what she had to say about the bank’s conduct and record-breaking $185 million fine, and her plan to protect the CFPB if she is elected this November.
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Credit unions could get legislative boost in Dodd-Frank change
Posted Date: Friday, September 23, 2016
Speaking before the Congressional Caucus at the National Association of Federal Credit Unions event, a prominent House Democrat said credit unions should be exempt from more of the rulemakings by the Consumer Financial Protection Bureau. And if the CFPB believes it can’t do so because of language in the Dodd-Frank Act, then it’s time to change Dodd-Frank. Read on for details.
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CUSO registry info off of Call Reports
Posted Date: Tuesday, September 20, 2016
Beginning with the Sept. 30 reporting cycle, the National Credit Union Administration announced it will require less information from credit unions about credit union service organizations on Call Reports. Going forward, credit unions will only be required to submit aggregate CUSO loan and investment information on the Call Report. Read on for the details.
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Cyberregulations in NY would impact financial institutions
Posted Date: Tuesday, September 20, 2016
The New York Department of Financial Services has proposed cyberregulations that would cover banks, insurance companies and other financial institutions regulated by the department.
The proposals would require banks, insurance companies, and other financial services institutions regulated by the department to establish and maintain a cybersecurity program, establish policies and procedures, designate a chief information security officer, move toward encryption of all nonpublic information in transit and in rest, and file annual certificates of compliance with the state.
The regulations would take effect Jan. 1, 2017, and certificates of compliance would be required to be filed by Jan. 15, 2018. Read on for the details.
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Regions Bank settles bad FHA loan charges
Posted Date: Tuesday, September 20, 2016
Continuing its four-year crackdown on lenders accused of Federal Housing Administration loan fraud, the Department of Justice last week announced a $52.4 million settlement with Birmingham, Ala.-based Regions Bank. Read on details about the department’s latest settlement.
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Wells CEO apologizes, Warren demands resignation
Posted Date: Tuesday, September 20, 2016
Wells Fargo CEO John Stumpf appeared before the Senate Banking Committee and apologized for the practices which have cost the bank $185 million in penalties from federal regulators and the Los Angeles city attorney’s office.
“I accept full responsibility for all unethical sales practices … and I’m fully committed to taking the necessary actions to restore our customers’ trust,” Stumpf said.
Over the next three hours, however, Stumpf was raked over the coals by senators on both sides of the aisle. Leading the way was Elizabeth Warren (D-Mass.), who demanded that Stumpf resign. Read on for more.
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National MI names Merkle COO
Posted Date: Monday, September 19, 2016
National Mortgage Insurance Corp. announced that Claudia Merkle has been named chief operating officer, effective Sept. 12. Read on for details of the hiring.
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Digital filing: Less paperwork to pile, file, shred
Posted Date: Monday, September 19, 2016
Sixty-eight percent of Ohioans organize their important documents digitally, according to a 2016 Mid-Year Consumer Survey, conducted by the Ohio Credit Union League. Read on to see how that helps consumers and the industry work efficiently and safely.
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Pair earn NAHREP honors
Posted Date: Monday, September 19, 2016
The National Association of Hispanic Real Estate Professionals (NAHREP) is honoring two individuals who have distinguished themselves through their work and advocacy for Hispanics in America. Read on for the details.
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Wells headed to House; Hill 'shocked' by events
Posted Date: Friday, September 16, 2016
Published reports Friday say the House Financial Services Committee expects to hold a hearing this month to examine actions taken by Wells Fargo that led to an enforcement settlement with regulators last week.
One member of the committee told Dodd Frank Update he was taken aback by the events and was looking forward to learning more.
“I was shocked and dismayed by the news,” Rep. French Hill (R-Ark.) told Dodd Frank Update in an exclusive interview. Read on for more details of the hearing and Hill's view of the case.
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Credit unions report mixed Q2 results
Posted Date: Friday, September 16, 2016
Lending at federally insured credit unions experienced solid gains net income, assets, membership and most loan categories, but spikes in delinquencies and charge-off rates could expose credit unions to risk, the National Credit Union Administration said in its quarterly financial report. Here’s how credit unions fared in the most recent financial quarter.
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Trade groups urge delay in MLA
Posted Date: Friday, September 16, 2016
The Department of Defense’s rule to expand certain provisions of the Military Lending Act is set to take effect next month, but six financial services trade associations have other ideas. Read on to find out why they think the rule’s effective date should be delayed by six months.
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What does a ‘sea change’ look like?
Posted Date: Tuesday, September 13, 2016
Editorial Director Chris Freeman looks at the issues that have arisen since the announcement of the Wells Fargo settlement. Beyond the rhetoric and finger-pointing that is and will continue to take place, what does the action mean for the way companies provide financial services to consumers, and will the lack of executive liability in the enforcement change the way regulators are allowed to pursue such cases in the future?
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CUNA board stands behind NCUA rules
Posted Date: Tuesday, September 13, 2016
The Credit Union National Association (CUNA) Board of Directors passed a resolution stating CUNA’s commitment to protecting credit unions’ interests by rejecting the lawsuit recently filed by the Independent Community Bankers of America against the National Credit Union Administration. Read on for the details.
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Congress set to tackle Wells Fargo case
Posted Date: Tuesday, September 13, 2016
Just days after the Consumer Financial Protection Bureau announced its record-breaking, $100 million fine against Wells Fargo, members of the Senate Committee on Banking Housing and Urban Affairs called for immediate hearings to address the debacle. A hearing has been set for Sept. 20. Here’s what the senators — including the CFPB’s architect, Sen. Elizabeth Warren — want to know.
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Former Wells exec singled out
Posted Date: Tuesday, September 13, 2016
A report from Fortune magazine has suggested the former head of community banking at Wells Fargo was allowed to retire before the recent announcement of the settlement over illegal practices within units that reported to her.
A spokesperson for Wells Fargo told Fortune that the timing of her exit was the result of a “personal decision to retire after 27 years” with the bank.
Read on for more details.
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CFPB notes spike in student loan complaints
Posted Date: Friday, September 9, 2016
The Consumer Financial Protection Bureau noted an 18 percent spike in student loan complaints in its August Monthly Complaint Report, while the bureau’s work to eradicate abusive practices in the payday lending industry paid off with a 9 percent drop in complaints from the previous month. Here are the other types of complaints and frequent offenders that consumers are sharing with the CFPB.
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ICBA lambastes Wells Fargo
Posted Date: Friday, September 9, 2016
The Independent Community Bankers of America (ICBA) began the week taking on the federal credit union regulator. It ended the week publicly opposing one of the nation’s biggest banks.
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Citing ‘challenging regulatory environment,’ ITT Tech folds
Posted Date: Friday, September 9, 2016
The embattled technical college ITT Tech abruptly shut down more than 130 campuses in 38 states this week, asserting that it was unable to overcome sanctions recently issued by the Department of Education. ITT Tech claims the department denied its right to due process, but regulators assert that the 47-year-old for-profit school posed too great a risk to its students and American taxpayers to be allowed to continue operations. Here’s what happened and what’s in store for 35,000 students suddenly left without a path to a degree and hundreds of millions of dollars in federal student loans.
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Q2 is a boon for banks
Posted Date: Friday, September 9, 2016
Commercial banks, savings institutions and community banks insured by the Federal Deposit Insurance Corp. saw positive gains in income and revenue during the second quarter, and the percentage of unprofitable banks fell to an 18-year low, according to the FDIC’s latest Quarterly Banking Profile.
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FDIC releases Q4 CRA exam schedule
Posted Date: Friday, September 9, 2016
The Federal Deposit Insurance Corp., has released the list of public institutions scheduled for Community Reinvestment Act examinations during the fourth quarter. Is your institution on the list? Read on to find out.
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Wells fined $185 million in ‘sea change’ settlement
Posted Date: Thursday, September 8, 2016
Wells Fargo Bank was fined $185 million by the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, and the city of Los Angeles, accused of a nationwide practice of secretly opening unauthorized deposit and credit card accounts.
The practices included thousands of employees and potentially 1.5 million unauthorized accounts.
Read on for details of the incentive plans at issue, Wells Fargo’s response, and why the regulators hope for a “sea change in the culture.”
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Ellis joins StoneHill Group as underwriting manager
Posted Date: Tuesday, September 6, 2016
The StoneHill Group, a national provider of quality control, due diligence, and mortgage fulfillment solutions for mortgage lenders, banks and credit unions, has hired Harold Ellis as underwriting manager. In his new role, Ellis will be responsible for overseeing all of the company’s mortgage underwriting solutions.
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Desktop Underwriter innovator joins STRATMOR Group
Posted Date: Tuesday, August 30, 2016
Andrew Weiss, a widely known and highly respected IT mortgage executive, has joined STRATMOR Group, a leading consulting firm dedicated to providing professional expertise and proprietary insights to the mortgage industry. Weiss joins as a principal in the firm’s IT and Operations advisory practice.
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Are investors standing in the way of eMortgages?
Posted Date: Tuesday, August 30, 2016
Fannie Mae and Freddie Mac recently conducted a survey on eMortgage adoption to assess what’s keeping the mortgage industry from fully embracing electronic closings, but it seems that many lenders feel a lack of investor acceptance is one of the biggest adoption barriers. They also told the GSEs that warehouse lenders are a big obstacle. Here’s what the GSEs found out when they asked everyone to weigh in on eMortgage adoption challenges.
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Bank assessments to FDIC to tumble
Posted Date: Tuesday, August 30, 2016
Seven years after the Federal Deposit Insurance Corp.’s insurance fund was decimated by the Great Recession, the agency announced its reserve ratio had reached the threshold necessary for 93 percent of institutions to see their assessments decline. Read on for all the details.
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ComplianceEase views TRID revisions as step forward
Posted Date: Tuesday, August 30, 2016
Although some mortgage compliance and risk-management software providers may be disappointed that they didn’t get to weigh in on the Consumer Financial Protection Bureau’s first crack at revising the TILA-RESPA Integrated Disclosure rule, one mortgage technology provider isn’t sweating being overlooked. Here’s why the company says “TRID 2.0” is “a step in the right direction.”
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Payday lending roundtable set
Posted Date: Tuesday, August 30, 2016
Comments on the Consumer Financial Protection Bureau’s (CFPB) small-dollar lending/payday lending proposed rules remain open until October, but stakeholders get another chance to discuss the proposals in two weeks. Read on for details.
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TCM Bank names Wagner senior VP
Posted Date: Monday, August 29, 2016
ICBA Bancard, the payments services subsidiary of the Independent Community Bankers of America (ICBA), announced Scott Wagner has joined its credit card bank, TCM Bank, N.A., as senior vice president, business development.
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Presidential candidates talk community banks
Posted Date: Thursday, August 25, 2016
As the presidential campaign season moves from summer to fall, the candidates are talking about community banking and what they would do to support the industry. Read on for details of their plans and reaction from the Independent Community Bankers of America.
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CRA data: Community lenders shrinking, loan sizes increasing
Posted Date: Thursday, August 25, 2016
The number of banks and lending institutions that deal with small business and small farm lending shrank in the last year, likely because of mergers and acquisitions, but loan originations and loan sizes increased, according to the Federal Financial Institutions Examination Council’s analysis of 2015 Community Reinvestment Act data.
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FTC hits Dallas auto dealer with second slap on the wrist
Posted Date: Thursday, August 25, 2016
The dealer has agreed to pay an $85,000 civil penalty to settle Federal Trade Commission charges that it violated a two-year-old consent order related to allegations of misleading advertising. The 2014 consent order was part of Operation Steer Clear, a nationwide sweep of 10 dealers accused of putting out misleading auto sales, financing and leases ads.
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Wells Fargo pays $4 million to settle CFPB’s student loan servicing charges
Posted Date: Thursday, August 25, 2016
Wells Fargo, the nation’s second-largest private student loan lender, says it discovered problems related to legacy loan payment aggregation, payment allocation procedures and a system coding error and took the appropriate corrective action years ago, but the CFPB hit the company with a supervisory examination and consent order anyway. Read on for the latest CFPB enforcement skirmish.
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GSEs release new forms for loan applications
Posted Date: Thursday, August 25, 2016
The government-sponsored enterprises released their new version of the Universal Residential Loan Application, along with a document for mapping the form to the Uniform Loan Application Dataset. The new forms are the first material updates in more than 20 years. Read on for details of the change and the expected timeline for implementation.
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FDIC features Matters Requiring Board Attention
Posted Date: Thursday, August 25, 2016
In the latest edition of the Federal Deposit Insurance Corp.’s (FDIC) Supervisory Insights report, the agency took the time to detail some of the most vital findings from its examinations of the years, the “Matters Requiring Board Attention.” Read on for details of what areas examiners found most often requiring board attention, as well as ways the FDIC says institutions can address situations before they become difficult to handle.
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Report finds work in progress to prevent elder financial abuse
Posted Date: Thursday, August 25, 2016
A new report from the Consumer Financial Protection Bureau finds that local efforts to prevent and detect elder financial abuse have grown, and that strong collaboration among community stakeholders can be very effective in combating the issue. Read on for more details.
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ClosingCorp names Rice as VP
Posted Date: Tuesday, August 23, 2016
ClosingCorp, a leading provider of residential real estate closing cost data and technology for the mortgage and real estate services industries, announced that Tom Rice has been named vice president, national account representative.
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Cordray to Senate: CFPB cares about small businesses, too
Posted Date: Tuesday, August 23, 2016
Nearly three-quarters of the Senate are concerned about the Consumer Financial Protection Bureau’s mammoth, complex rulemakings and how they impact small financial institutions — and the bureau doesn’t disagree that this is an important concern. After a bipartisan group of senators urged CFPB Director Richard Cordray to take it easy on small business entities, Cordray penned a response. Read on to find out where the senators and Cordray found common ground.
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SEC announces third whistleblower process settlement
Posted Date: Tuesday, August 23, 2016
The commission said the three companies used improperly restrictive language in their employee severance agreements that precluded former employees from pursuing whistleblower claims. Find out which company the SEC targeted last week.
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CFPB ombudsman highlights student loan problems
Posted Date: Tuesday, August 23, 2016
Problems related to the Income-Based Repayment (IBR) plan offered to student loan borrowers since 2009 are nothing new, as the Consumer Financial Protection Bureau’s ombudsman has documented loan servicer communication concerns in the past. Now, a new report shines a light on another problem in the lifecycle of the student loan borrower: The processing of IBR applications. Read on for a summary of borrowers’ latest complaints.
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MNET Mortgage Corp.’s Morgan honored
Posted Date: Thursday, August 11, 2016
Hope Morgan, branch manager of the Salisbury, Md., office of Mortgage Network Inc., dba MNET Mortgage Corp., has received the 2016 Outstanding Affiliate Award by the Coastal Association of Realtors(CAR) of Maryland for her support of the association throughout her 39-year career.
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TCM Bank acquires Fifth Third Bank agent bank portfolio
Posted Date: Thursday, August 11, 2016
ICBA Bancard, the payments services subsidiary of Independent Community Bankers of America (ICBA), announced that its credit card bank, TCM Bank, N.A., has acquired the agent bank portfolio of Fifth Third Bank. The purchase marks the largest credit card acquisition in TCM’s history, bringing its total assets to $292 million.
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