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Dodd Frank Update Monthly Edition
Dodd Frank Update July 2020
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Dodd-Frank Act has mixed history as 10-year anniversary approaches
Posted Date: Friday, July 17, 2020
A decade and 2,300 pages later, the Dodd-Frank Act has fundamentally changed the financial services industry – in ways which are both good and bad.
The bill was designed, a Dodd Frank Update story from July 2010 noted, to create a sound economic foundation to grow jobs, protect consumers, reign in Wall Street, end “too-big-to-fail” institutions and prevent another financial crisis.
Experts from CBA, ICBA and NAFCU looked back on the good and the bad about the impact of the Dodd-Frank Act. Read on for their thoughts.
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CFPB to extend GSE Patch
Posted Date: Tuesday, June 23, 2020
The Consumer Financial Protection Bureau (CFPB) announced that it plans to change the qualified mortgage loan definition, but as it goes through that process, the current GSE Patch will remain in place.
The bureau said the move will ensure that “responsible, affordable mortgage credit remains available to consumers” who could be affected by the patch’s expiration.
Read on for details about the proposals, along with the new standards the CFPB wants to bring to qualified mortgages.
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CFPB pilot advisory opinion program open now
Posted Date: Friday, June 19, 2020
Starting today, companies which have questions over regulations under the purview of the Consumer Financial Protection Bureau (CFPB) can make a request for clarification.
The bureau announced it has launched a pilot advisory opinion program, in which covered entities may submit a request to the CFPB, and if the bureau chooses to respond, it will make the responses available to the public.
Read on for details of the program and who can, and cannot, make requests during the pilot.
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Banking industry profits in face of pandemic
Posted Date: Friday, June 19, 2020
How strong is the banking industry? Only a pandemic could slow it down – and even then, the industry still made money.
A run of two years of the most profitable quarters in banking history came to an end in the first quarter of 2020, the Federal Deposit Insurance Corp. reported. Despite the onset of the COVID-19 pandemic, the agency reported that the 5,116 banks insured by the regulator reported an aggregate profit of $18.5 billion in the first quarter.
Read on for more details from the quarterly report, and reaction from industry representatives.
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Agencies provide PPP relief to borrowers
Posted Date: Friday, June 19, 2020
The Treasury Department and Small Business Administration (SBA) took two big steps to help provide relief to Paycheck Protection Program borrowers after the passage of the recent flexibility act.
First, the agencies issued guidance which allows the eligible payroll total for forgiveness to be a full 24-week period, and then they published a new EZ application form to streamline the process for most borrowers.
Read on for details of the latest relief measures.
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Market exchanges win court case over SEC pilot program
Posted Date: Friday, June 19, 2020
The American Securities Association touted a victory for market exchanges in a recent court case involving the Securities and Exchange Commission (SEC).
The District of Columbia Circuit Court of Appeals ruled that the SEC did not have authority to implement its Access Fee Pilot, which was created to gather data so the SEC might be able to determine in the future whether regulatory action was necessary.
Read on for more details from the case, and reaction from the association.
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Purchase applications ahead of 2019 pace for past month
Posted Date: Friday, June 19, 2020
The mortgage market posted $2.173 trillion in originations in 2019, the best year for the industry since 2006. Don’t look now, but in the middle of a pandemic, the mortgage industry is outpacing 2019.
For the fourth week in a row, the Mortgage Bankers Association (MBA) reported that purchase applications were higher than they were a year ago.
Read on for details of the latest market information, including new record-low mortgage rates reported by MBA and Freddie Mac.
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Banks around the country announce Juneteenth recognition plans
Posted Date: Thursday, June 18, 2020
In the wake of growing awareness of racial equality and justice issues, a number of the largest banks in the country are closing for all or part of Friday in recognition of Juneteenth.
From Bank of America to Truist and a number in between, institutions announced closure plans and issued statements in support of black employees and Americans.
Read on for details of the recognition and reports from leaders such as JPMorgan Chase’s Jamie Dimon, Fifth Third Bank’s Greg Carmichael and Berskshire Bank’s Richard Marotta.
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NCUA’s Harper calls on credit unions to advance racial equality
Posted Date: Thursday, June 18, 2020
In an address to the Illinois Credit Union League’s Virtual Town Hall Meeting on June 11, National Credit Union Administration (NCUA) Board Member Todd Harper called on the NCUA and the credit union industry to take action to advance economic equality and justice.
He said the protests in support of Black Lives Matter were the product of centuries of frustration and repression.
Read on for details from Harper’s remarks.
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IDS inks partnership agreement with Mortgage Builder
Posted Date: Wednesday, June 17, 2020
Mortgage document preparation vendor International Document Services, Inc. announced it has expanded its partnership to become the exclusive integrated document preparation vendor of Mortgage Builder, a provider of award-winning mortgage loan origination and servicing software.
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SimpleNexus, Mortgage Coach expand integration
Posted Date: Tuesday, June 16, 2020
SimpleNexus has expanded its integration with Mortgage Coach, making it easier than ever for loan originators to give borrowers the clear, accurate comparison of loan products and scenarios needed to make informed mortgage decisions.
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OptifiNow integrates with Ellie Mae
Posted Date: Tuesday, June 16, 2020
OptifiNow, a provider of sales and marketing automation technology, announced that its platform will be integrated with the Ellie Mae Digital Lending Platform, including using Encompass Partner Connect API technology.
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Powell talks Main Street launch, Fed restarts exams
Posted Date: Tuesday, June 16, 2020
A day after opening lender registration to the Federal Reserve’s Main Street Lending Facility, Chairman Jerome Powell talked with the Senate Banking Committee about the timing for the full launch of the facility.
In addition, the Fed announced that it would resume examinations for all covered institutions.
Read on for details from the chairman’s appearance and other Fed announcements.
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CFPB cites abusive acts in credit repair enforcement
Posted Date: Tuesday, June 16, 2020
The Consumer Financial Protection Bureau and Massachusetts Attorney General Maura Healey recently filed a lawsuit against Commonwealth Equity Group, LLC, which does business as Key Credit Repair, and Nikitas Tsoukales, Key Credit Repair’s president and owner.
The lawsuit alleged violations of the abusive and deceptive prongs of the Telemarketing Sales Rule, as well as violations of state and federal consumer financial protection statutes.
Read on for details from the enforcement action.
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New guidance, scrutiny for PPP loans
Posted Date: Tuesday, June 16, 2020
Following up on conversations with the Senate Small Business and Entrepreneurship Committee, last week, the Treasury Department and Small Business Administration issued new guidance around the availability of Paycheck Protection Program (PPP) loans for those with felony convictions.
In addition, after Treasury Secretary Steven Mnuchin told the Senate committee that the agency considered PPP borrower information confidential and proprietary, Democrats on the Select Subcommittee on the Coronavirus Crisis sent letters to the agencies and large banks, requesting information on the loans issued.
Read on for more details from the program.
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Moody’s: Flat yield curves threaten margins
Posted Date: Tuesday, June 16, 2020
A new report by Moody’s Analytics found that, rather than the attention on low interest rates being a headwind for the banking industry, that the flattening of yield curves presents a key threat to bank margins.
“We believe the absolute level of interest rates has less influence over net interest margins than is commonly supposed,” the analysts state.
Read on for more details from the report.
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SBA pushes lenders to do more with PPP loans
Posted Date: Tuesday, June 16, 2020
Small Business Administration (SBA) Administrator Jovita Carranza wrote to lenders June 15 asking them to do more to get Paycheck Protection Program loans to smaller businesses and underserved communities.
Carranza’s letter said the SBA recognized that Community Development Financial Institutions, minority depository institutions, certified development companies and Farm Credit System lenders are leading the way to serve individual entrepreneurs and small businesses in underserved communities.
Read on for details from her letter to lenders.
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FTC, Ohio settle with payment processor
Posted Date: Tuesday, June 16, 2020
A payment processor which had been cited for violations in July 2019 has agreed to a settlement with the Federal Trade Commission and the state of Ohio.
The allegations included charges that the processor unlawfully processed payments for multiple scam operations.
Read on for details of the order and the $8.6 million penalty issued.
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Hauptman nominated for spot on NCUA board
Posted Date: Tuesday, June 16, 2020
President Donald Trump announced his intent to nominate Kyle Hauptman, a staffer for Sen. Tom Cotton (R-Ark.) to a position on the board of the National Credit Union Administration (NCUA).
Hauptman is Cotton’s advisor on economic policy, and is a staff director for the Senate Banking Committee’s Subcommittee on Economic Policy.
Read on for more details about the nominee, along with reaction from NCUA Chairman Rodney Hood.
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House introduces CRA on CRA
Posted Date: Tuesday, June 16, 2020
House Financial Services Chairwoman Maxine Waters (D-Calif.) and Rep. Gregory Meeks (D-N.Y.) have introduced a Congressional Review Act resolution to rescind the Community Reinvestment Act rule promulgated by the Office of the Comptroller of the Currency.
The agency finalized the rule a day before Comptroller Joseph Otting announced his resignation.
Read on for details of the resolution.
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Guaranteed Rate donates $3.4 million to Feeding America
Posted Date: Friday, June 12, 2020
Guaranteed Rate, one of the largest retail lenders in the nation, announces that it has donated $3.4 million to Feeding America, which will help to provide 34 million meals across their nationwide network of food banks.
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CBA elects Channels as chair-elect
Posted Date: Friday, June 12, 2020
The Consumer Bankers Association’s board of directors this week elected Christine Channels as its new chair-elect, positioning her to be CBA’s board chair for the upcoming fiscal year.
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ARMCO expands corporate philanthropic program
Posted Date: Friday, June 12, 2020
ACES Risk Management (ARMCO) announced it has expanded its corporate philanthropic initiative ARMCO CARES to support employees’ charitable giving and volunteer efforts in response to the COVID-19 pandemic and recently added contributions advocating for racial equality.
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Senate mulls businesses getting second PPP loan
Posted Date: Thursday, June 11, 2020
Will Congress offer small business who received Paycheck Protection Program loans a second chance at funding after the current program expires June 30?
That was the central theme of a Senate Small Business and Entrepreneurship Committee hearing June 10 with Treasury Secretary Steven Mnuchin and Small Business Administration Administrator Jovita Carranza.
Read on for details from the hearing, along with news on new forgiveness guidance and forms.
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BPI examines large banks’ impact on first round of PPP
Posted Date: Thursday, June 11, 2020
The Bank Policy Institute conducted a study of the first phase of lending in the Paycheck Protection Program to determine whether criticisms of the way lending was conducted, and the recipients of funds, were correct.
The study by Paul Calem and Francisco Covas was accompanied by a blog posting with the findings. “Reviewing the effectiveness of such a program is also a complex undertaking, and conclusions should only be drawn using data and facts,” the study concluded.
Read on for details of the findings.
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Associations ask FHA to revise indemnification requirement
Posted Date: Thursday, June 11, 2020
A group of housing and real estate trade associations, led by the Mortgage Bankers Association, wrote Department of Housing and Urban Development Secretary Ben Carson recently on an announcement by the Federal Housing Administration (FHA).
The announcement would require lenders to provide 20 percent indemnification for as much as two years for borrowers who enter into forbearance after closing, but before FHA insured their loan.
Read on for more details of their request.
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Fannie finds lenders expecting profits in second quarter
Posted Date: Thursday, June 11, 2020
The latest quarterly mortgage lender survey from Fannie Mae found that, although lenders expected their profit margins to fall in the second quarter, they expect refinance demand to drive profitability in the quarter.
“Lenders, profitability outlook remains positive, likely because of stable refinance demand, lender capacity constraints, and still-wide mortgage spreads,” Chief Economist Doug Duncan said.
Read on for more details from the survey of lenders.
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NCUA signs agreement to work with Export-Import Bank
Posted Date: Thursday, June 11, 2020
For the first time, the Export-Import Bank (Ex-Im) of the United States is making targeted outreach to credit unions, announcing that it has signed a memorandum of understanding with the National Credit Union Administration.
The three-year collaborative effort is planned to bring credit unions together with small businesses and expand awareness about Ex-Im programs available to businesses.
Read on for details of the cooperation.
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Calabria discusses capital re-proposal
Posted Date: Tuesday, June 9, 2020
Federal Housing Finance Agency Director Mark Calabria appeared before the Senate Banking Committee on June 9 and discussed the re-proposal of capital requirements for Fannie Mae and Freddie Mac to exit conservatorship.
Those rules, which are in a 60-day comment period now, would require the agencies to raise $234 billion before they could prepare to exit conservatorship.
Read on for more details from Calabria’s remarks.
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SBA, Treasury promise guidance on PPP changes
Posted Date: Tuesday, June 9, 2020
The first business day after the president signed changes to the Paycheck Protection Program into law, the Treasury Department and Small Business Administration (SBA) issued a joint statement on their plans for implementing the latest changes to the program.
The statement from Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza thanked the president and leaders of Congress for their bipartisan work on fixing the program, before stating that the agencies would issue new guidance to conform with the bill.
Read on for details from the announcement.
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CFPB cites payday lender for overcharging
Posted Date: Tuesday, June 9, 2020
A payday lender accused of overcharging customers when it amortized payments for consumers has settled with the Consumer Financial Protection Bureau.
The bureau announced it would collect $2 million of the more than $3.5 million of overcharges to 4,129 consumers over a four-year period.
Read on for details of the bureau’s enforcement action.
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Fed changes Main Street Lending
Posted Date: Tuesday, June 9, 2020
The Federal Reserve announced another change to its still-stalled Main Street Lending facility.
Responding to concerns that the facility was still priced above the lending capacity of most Main Street businesses, the Fed’s latest move dropped the minimum loan amount to $250,000 from $500,000, among other changes.
Read on for details from the announcement, and just when the facility might be launching.
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Forbearance spikes in non-government space
Posted Date: Tuesday, June 9, 2020
Forbearance rates continue to have slowed or retreated, according to a pair of new reports, but the latest information show increases in forbearances among private label and portfolio loans.
Reports from the Mortgage Bankers Association showed that the total number of loans in forbearance was slightly up, while Black Knight Inc. reported an overall dip in the number of forbearances.
Read on for details from the two reports.
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Otting joins Black Knight board of directors
Posted Date: Tuesday, June 9, 2020
Just over a week after stepping down as the Comptroller of the Currency, Joseph Otting is back in business, joining the board of directors of Black Knight Inc.
Otting had been the first comptroller in three decades to have banking experience before taking the job, and said he looked forward to joining Black Knight.
Read on for more details from the announcement.
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Senators ask for halted regs to be phased out
Posted Date: Tuesday, June 9, 2020
A group of Republican senators have written the Office of Management and Budget to suggest the phasing out of all federal regulations which have been waived because of the pandemic.
The group, led by Utah Sen. Mike Lee, said the rules should go through a regulatory review process to determine whether they should be modified, repealed, or maintained.
Read on for more from the request.
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PPP changes coming, again
Posted Date: Thursday, June 4, 2020
A week after the House passed a bill, 417-1, to alter the terms of the Paycheck Protection Program, the Senate passed the bill by unanimous consent, and President Donald Trump signed the bill June 5 to change the terms of the loans more than two months after the program was launched.
The bill, HR 7010, also known as the PPP Flexibility Act, contains two major changes involving the length of time for the covered period for funds to be used, as well as the amount of funding which must be spent on payroll.
Read on for details of the changes.
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Groups call for automatic PPP forgiveness for smallest loans
Posted Date: Thursday, June 4, 2020
Representatives from trade associations of the largest banks in the country have called upon legislators to automatically forgive all Paycheck Protection Program loans of $150,000 or less.
The associations say the move would save small businesses up to 70 million hours of paperwork and $7.4 billion in expenses.
Read on for more from the Consumer Bankers Association and Bank Policy Institute announcement.
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MBA show includes two announcements on eNotes
Posted Date: Thursday, June 4, 2020
The Mortgage Bankers Association moved its Technology Solutions Conference online this year, hosting the virtual show June 1-2.
A pair of notable news items came out of the show, both centered around the status and use of eNotes.
Read on for details from the conference.
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MBA economist sees V recovery in purchase market
Posted Date: Thursday, June 4, 2020
The latest market news continued to be strong for the mortgage industry, with the Mortgage Bankers Association (MBA) reporting growth in applications and 30-year fixed rates remaining at or near record-low levels.
MBA Chief Economist Mike Fratantoni said the data has shown a “sharp V recovery” in the purchase market.
Read on for more details from the latest reports.
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Comptroller warns of stay-at-home impact on banks
Posted Date: Thursday, June 4, 2020
Acting Comptroller of the Currency Brian Brooks wrote to state associations for cities, mayors and governors, warning them to consider the long-term adverse impact of stay-at-home orders on the nation’s banks.
“Certain aspects of these local orders, potentially threaten the stability and orderly functioning of the financial system the OCC (Office of the Comptroller of the Currency) is charged by law to protect,” Brooks wrote.
Read on for more details from Brooks’ letters.
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NCUA’s Hood speaks on Floyd
Posted Date: Thursday, June 4, 2020
The chairman of the National Credit Union Administration released a statement Tuesday, addressing the death of George Floyd and events around the country.
Hood is the first African American to lead a federal banking agency, and said he felt “compelled” to speak.
Read on for the chairman’s statement.
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DocMagic provides eSign technology free to boost productivity
Posted Date: Tuesday, June 2, 2020
DocMagic, Inc., the premier provider of fully-compliant loan document preparation, regulatory compliance and comprehensive eMortgage services, announced it has made an agnostic version of its eSign technology available for free to help organizations increase productivity, efficiency and compliance among work-from-home employees during COVID-19 stay-at-home orders as well as after they are lifted.
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MBA welcomes Briggs as SVP, general counsel
Posted Date: Tuesday, June 2, 2020
The Mortgage Bankers Association announced the appointment of Michael W. Briggs as Senior Vice President and General Counsel. Briggs joins MBA from the Federal Deposit Insurance Corporation, where he most recently served as Assistant General Counsel for the Consumer Law Section.
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Bank of America pledges $1 billion to economic, racial equality work
Posted Date: Tuesday, June 2, 2020
Bank of America announced that it is making a $1 billion, four-year commitment of additional support to help local communities address economic and racial inequality accelerated by a global pandemic. The programs will be focused on assisting people and communities of color that have experienced a greater impact from the health crisis.
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The difficulty in determining what reputational risk may arise
Posted Date: Tuesday, June 2, 2020
The Paycheck Protection Program (PPP) has put banks and lenders in the spotlight since it launched – for the right reasons and sometimes, the wrong ones.
Banks and lenders rightfully have received credit for the work they have done to stand up teams to work with the Small Business Administration (SBA) and process millions of small business loans for clients. Stories of staff being redirected to work on PPP loans are numerous, with officers working 24/7 shifts to process loans and help keep businesses afloat and workers employed.
But there has been the downside, too. Read on for a look at the way institutions examine and prepare for reputational risk.
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PPP lenders may be subject to fee clawback
Posted Date: Friday, May 29, 2020
It took nearly six weeks, but lenders and borrowers finally got some clarity from the Treasury Department and Small Business Administration (SBA) on how they would go about the loan forgiveness process in the Paycheck Protection Program (PPP).
Three days after SBA published the application form for loan forgiveness, the agencies issued a pair of interim final rules with more detailed guidance for lenders and borrowers.
Read on for more details, including how SBA could clawback processing fees for up to a year after a PPP loan has been forgiven.
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CFPB settles with debt relief firms
Posted Date: Friday, May 29, 2020
The Consumer Financial Protection Bureau (CFPB) announced a proposed settlement with a mortgage lender and related companies which work in the debt-relief industry, providing partial redress for harmed consumers and limited civil-money penalties.
The settlement would require $200,000 in consumer redress and $450,001 in civil money penalties – despite the fact that the CFPB identified $18 million in consumer redress.
Read on for more details of the settlement.
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Mortgage market soaring as May ends
Posted Date: Friday, May 29, 2020
Forecasts of doom and gloom in the housing and mortgage markets in April have turned to upside surprise as May came to a close.
Record-low mortgage rates and easing of stay-at-home restrictions are spurring stronger activity on both the purchase and refinance side of originations.
Read on for a look at the market today, including data on sales and applications, and why the market strength has made Zillow revise its forecast for the year.
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Brooks first move is finalizing ‘valid when made’
Posted Date: Friday, May 29, 2020
Brian Brooks officially took over May 29 as the acting comptroller of the currency, following the resignation of Comptroller Joseph Otting.
Brooks issued a statement that laid out his priorities for the Office of the Comptroller of the Currency (OCC) as he steps into the new role, and hours later, announced the OCC finalized a rule clarifying the “valid when made” standard on the sale and purchase of loans.
Read on for details of the focus of the OCC going forward.
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Texas Capital, Independent Bank break deal
Posted Date: Friday, May 29, 2020
Texas Capital Bank and Independent Bank won’t be forging the largest bank in Texas after all.
Five months after the banks announced a $5.5 billion merger, they announced it would be mutually terminated.
Read on for more details, as well as changes at the top of Texas Capital Bank management.
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Financial regulators get principled on small-dollar lending
Posted Date: Friday, May 29, 2020
Looking to provide a path forward for lenders considering small-dollar products to offer consumers, federal financial regulators recently issued principles for conducting small-dollar lending.
The principles were released by the Federal Deposit Insurance Corp., the Federal Reserve, the National Credit Union Administration and the Office of the Comptroller of the Currency.
Read on for details from the agencies’ statement and principles.
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OCC finalizes CRA rule without FDIC support
Posted Date: Tuesday, May 26, 2020
Just more than 40 days after comments closed on the Community Reinvestment Act (CRA) proposed rule, the Office of the Comptroller of the Currency (OCC) finalized the revision to the 1977 standards for determining how banks serve their community needs, particularly in low- and moderate-income communities.
The rule brings clarity to activities which qualify for CRA credit, along with new ways to determine assessment areas.
Read on for more on the OCC’s proposal and reaction from industry and the Federal Deposit Insurance Corp., which joined in the proposal but did not join in the finalized rule.
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MBA hosts regulators, provides market update
Posted Date: Friday, May 22, 2020
The Mortgage Bankers Association (MBA) on May 19 conducted a virtual event on the State of the Industry which featured appearances from Federal Housing Finance Agency Director Mark Calabria, Department of Housing and Urban Development Deputy Secretary Brian Montgomery and Consumer Financial Protection Bureau Director Kathy Kraninger.
The event also featured an economic update from MBA Chief Economist Mike Fratantoni and staff.
Read on for details from the event.
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Otting steps down from OCC day after CRA rule finalized
Posted Date: Friday, May 22, 2020
Less than three years into his five-year term, Office of the Comptroller of Currency Comptroller Joseph Otting announced that he was leaving the position, one day after the regulator finalized its modernization of the Community Reinvestment Act rule.
Otting was confirmed to the position in November 2017 by a 54-43 vote and came into the role as the first comptroller in three decades who had experience in the banking industry
Read on for more details and industry reaction.
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Latest PPP fraud: Employee names generated by Internet
Posted Date: Friday, May 22, 2020
A Texas man is the latest to be charge with trying to defraud the Paycheck Protection Program (PPP). The Justice Department said he submitted a list of employees obtained from a publicly available random name generator on the Internet, along with forged tax documents.
Samuel Yates, 32, of Maud, Texas, allegedly sought $5 million in PPP funds from two different banks by claiming to have more 400 employees.
Read on for more details about the charges.
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