News By Edition

The Consumer Financial Protection Bureau’s (CFPB) highly anticipated proposed rule on overdraft fees proposes to close a “regulatory loophole” by applying Truth in Lending Act principles to overdraft programs offered by depository institutions. Dodd Frank Update spoke with Kelvin Chen of the Consumer Bankers Association about the CFPB’s proposal, including aspects that may signal good intentions but not necessarily good policy.

Mastercard and The Clearing House (TCH) announced an extended multi-year partnership in which the organizations will collaborate on innovative tools to help consumers, businesses and governments evolve and embrace the digital economy through real-time payments (RTP) adoption on TCH’s RTP network, according to a joint press release.

Dark Matter Technologies has released a new, automated workflow in the Empower loan origination system (LOS) designed to make it easier for lenders to identify and qualify loan applicants based on their positive rent payment history, according to a company press release.

The recent ransomware attack against loanDepot, Inc. exposed approximately 16.6 million individuals’ sensitive personal information, the company disclosed in a press release on Jan. 22. A class action lawsuit filed in California accuses the nonbank lender of failing to adequately protect customer data.

The Consumer Financial Protection Bureau and seven state attorneys general filed suit against the orchestrators of a web of companies for allegedly swindling consumers under the guise of a debt-relief service. The lawsuit claims Strategic Financial Solutions and the company’s owners, Ryan Sasson and Jason Blust, collect excessive fees and provide little help.

The adoption of technology enabling faster payments and tokenization in the financial marketplace raises new concerns for regulators, according to Acting Comptroller of the Currency Michael Hsu in his recent remarks on bank liquidity risk at Columbia University Law School. He suggested a targeted regulatory approach could be the best option for mitigating this risk.

The mortgage industry has indicated its support for legislation proposed in the House and Senate that seeks to lessen tax burdens on working families. The bill would increase the low-income housing tax credit ceiling by 12.5 percent for calendar years 2023 through 2025.

Deadline extensions and public hearings are among the notable news items on the radar for federal regulators. We’ve curated a few pieces of news that may not make for the most exciting headlines but are important for financial institutions to know.

Five entities were recently ordered by the Federal Deposit Insurance Corp. (FDIC) to stop making false and misleading statements about FDIC deposit insurance. The cease-and-desist orders were issued within a month of the agency’s recent final rule to strengthen protection over its branding.

Many systems forced offline during loanDepot’s recent ransomware attack are operational again, according to a webpage devoted to keeping customers updated about its efforts to restore services. The nonbank originator is one of a string of companies hit by recent cyberattacks, which Federal Reserve Gov. Michael Barr referenced during a cybersecurity conference.

Delving into the complex realm of bank capital policy, Federal Reserve Gov. Michelle Bowman stressed the importance of striking the right balance on the tradeoffs between industry perspectives and policy decisions during the “Protect Main Street” event, sponsored by the Center for Capital Markets.

The Mortgage Bankers Association (MBA) recently announced the passing of former President and CEO David Stevens, following a long-fought battle with prostate cancer. Stevens brought decades of regulatory and real estate experience with him to the top leadership role with MBA, which he held from 2011 to 2018.

The Consumer Financial Protection Bureau’s proposed rule on overdraft fees charged by banks and credit unions with more than $10 billion in total assets is being met with significant opposition from various industry leaders. See what executives from some of the nation’s largest trade organizations have to say.

In response to recent scam attempts by bad actors pretending to be with the Consumer Financial Protection Bureau (CFPB), the agency published a notice warning consumers to “Beware of new CFPB impostor scams.” The bureau said it has confirmed that scammers have been using CFPB employees’ names to try to defraud people, specifically older adults, by phone or video calls.

Snapdocs has partnered with LenderLogix to provide shared customers with a unified closing experience, according to a press release. The integration between Snapdocs’ eClosing platform and LenderLogix’s LiteSpeed point-of-sale (POS) is designed to enable lenders to streamline digital closings from loan application to final signature, while automating cumbersome and time-intensive internal processes.

Laura Lasher, co-founder and managing director at Worthy Performance Group, has been awarded the Thought Leader Award from PROGRESS in Lending Association.

Within the first two weeks of 2024, the financial industry saw three merger and acquisition transactions involving relatively large credit unions acquiring assets from community banks. These deals, two of which occurred a day apart, have shone a spotlight on some contentious points between credit unions and community banks.

Morgan Stanley and a former executive were charged with fraud and failure to enforce policies and procedures related to confidential information in a $249 million settlement with the Securities and Exchange Commission.

The Federal Reserve cited former bank employees for alleged misappropriation of confidential bank records in four separate enforcement actions announced on the agency’s website. One of the actions involved records containing confidential supervisory information.

Federal regulators have been busy publishing newly updated information, compliance evaluations and penalty amounts. Get a sampling of the latest news that may not make the mainstream headlines but is important for financial institutions to have on their radar.

The Federal Trade Commission and the Department of Justice recently finalized their 2023 Merger Guidelines, which include 11 enforcement principles intended to address excessive market consolidation across industries.

Stressing the importance of data accuracy in background check reports and ensuring consumers can access their report data, the Consumer Financial Protection Bureau issued guidance highlighting two advisory opinions for credit reporting companies to ensure both priorities are met.

Federal Reserve Vice Chair for Supervision Michael Barr signaled the Fed is open to modifying aspects of the Basel III Endgame proposal on capital requirements during a recent speaking engagement. Specifically, Barr indicated the Fed may consider adjustments to provisions concerning operational risk and fee-based income, among others.

The Securities and Exchange Commission signaled a shift in its stance on crypto assets by approving an application for spot bitcoin exchange-traded product shares. The decision could open the door for similar applications previously denied by the agency.

The banking industry offered a landslide of support and recommendations for the Consumer Financial Protection Bureau to consider when finalizing its proposed rule which would extend the bureau’s supervisory authority to certain nonbank entities. The proposed rule aims to define a market for general-use digital consumer payment applications.

The Senate voted not to override President Joe Biden’s veto of a joint resolution to overturn the Consumer Financial Protection Bureau’s final rule on small business lending, which the bureau is mandated to issue under Sec. 1071 of the Dodd-Frank Act. The rule stipulates data collection and reporting requirements for financial institutions originating 100 or more small business loans per year.

Lawmakers and regulators at the Consumer Financial Protection Bureau have received no shortage of communication from industry trade advocates opposed to measures aimed at changing the credit card landscape. Many argue these proposals will negatively impact credit availability or will be ineffective or even detrimental to the people and businesses they are meant to help.

The Treasury’s Financial Crimes Enforcement Network released a financial trend analysis indicating 42 percent of Bank Secrecy Act reports filed in one calendar year involved identity-related suspicious activity.

Mr. Cooper recently announced it has appointed Mike Weinbach as its new president, effective Feb. 1. He will be responsible for overseeing operations, including originations, servicing and technology, according to a company press release.

Rocket Companies, the Detroit-based fintech platform company including mortgage, real estate and other financial services businesses, recently announced in a press release the appointment of Jonathan Mildenhall as its first group Chief Marketing Officer.

The nation’s second-largest nonbank retail mortgage originator, loanDepot, has been hit by a ransomware attack, forcing multiple systems offline and potentially compromising customer information. The company provided a statement to Dodd Frank Update about the incident.

The minutes from the Federal Open Market Committee’s final meeting of 2023 indicate while the Federal Reserve does not anticipate the need to raise the target rate for interest rates in 2024, committee members are not ready to rule out the possibility.

Veterans harmed by predatory lending practices began receiving restitution payments in December, nearly four years after the Consumer Financial Protection Bureau filed suit against five people and their companies. The redress, totaling $6 million, is being distributed to 264 harmed consumers, meaning each recipient should receive about $22,700.

The Securities and Exchange Commission recently announced the start of Commissioner Mark Uyeda’s second term with the agency for a term spanning the next four years. Uyeda was renominated by President Joe Biden last June, one year after receiving his first nomination.

Twelve Federal Reserve Banks began the year by meeting their newly appointed leaders, selected by the Board of Governors of the Federal Reserve. Learn more about the news from the Fed, as well as other developments from regulatory agencies, with links to additional information.

The Federal Housing Finance Agency recently announced an increase in the annual investment cap for the government-sponsored enterprises for the Low-Income Housing Tax Credit market. Beginning this year, Fannie Mae and Freddie Mac will be allowed to invest up to $1 billion each as equity investors.

A group of congressional Democrats recently joined the collective push for the Consumer Financial Protection Bureau to create a new rule prohibiting companies from using forced arbitration clauses in consumer financial agreements.

The letter came on the heels of another in which over 160 law professors argued such rulemaking could vary enough from the bureau’s previously nullified arbitration rule to satisfy the Congressional Review Act.

The Securities and Exchange (SEC) recently appointed Dean Metry to serve as the agency’s chief administrative law judge. Judge Metry will lead the SEC’s Office of Administrative Law Judges, which conducts hearings and issues initial decisions in administrative proceedings before the agency.