News By Edition

The U.S. Supreme Court ruled 7-2 in favor of the Consumer Financial Protection Bureau (CFPB), settling a yearslong battle with Consumer Financial Services of America and ending uncertainty as to whether the CFPB’s funding structure was constitutional. Dodd Frank Update reached out to several industry insiders to break down what this ruling signifies.

STRATMOR Group explored various strategies banks and credit unions can implement to gain market share and improve profitability in the current tough mortgage market in its May Insights Report. Most of these strategies revolve around improved execution of critical business development activities, rather than on new investments in technology or systems.

The Consumer Financial Protection Bureau will distribute $384 million in redress to approximately 191,000 consumers who were deceived by Think Finance, a Texas-based online payday lender that deceived consumers out $133 million. The bankrupt company paid only $7 in civil money penalties when it settled charges brought by the bureau in November 2017.

Survey data released by the Bank Policy Institute indicated the Financial Crimes Enforcement Network (FinCEN) significantly underestimates the time required for a bank to file a suspicious activity report. In letters responding to FinCEN’s request for comment on its proposed renewal of existing data collection requirements relating to reports of suspicious transactions, multiple financial organizations agreed the agency’s filing estimates are too low.

Attendees at this year’s National Settlement Services Summit (NS3) in Naples, Fla., helped bring smiles to the faces of young cancer patients during the “Make a Child Smile” community service event, sponsored by Qualia.

Federal Deposit Insurance Corp. Chair Martin Gruenberg announced he will step down from his role following the results of an independent investigation into workplace misconduct within the agency during his tenure. Gruenberg said he plans to leave once a replacement is confirmed.

Federal agencies are constantly tasked with outlining the regulatory priorities driving their actions with respect to covered entities and various economic sectors. In this roundup, we note some of the latest efforts in that respect, as well as a key change in senior leadership at one agency.

To address data security risks associated with emerging technologies, the Securities and Exchange Commission adopted amendments to Regulation S-P to modernize and enhance rules governing the treatment of consumers’ nonpublic personal information by certain financial institutions.

More than 45 speakers will take the stage over three days at the 20th National Settlement Services Summit (NS3) at Naples Grande Beach Resort in Naples, Fla. Over 600 attendees will hear from them during 18 sessions, beginning Tuesday, May 21.

October Research, LLC debuted its new “Keys to Real Estate” podcast, hosted by Chief Knowledge Officer Mary Schuster, on May 16. Industry professionals can now hear from some of the most knowledgeable thought leaders on topics impacting the real estate transaction while on the go delivered weekly via various podcast platforms and YouTube.

The Supreme Court’s 7-2 vote upholding the constitutionality of the Consumer Financial Protection Bureau elicited a slew of reactions from financial trade advocates. Common themes among the responses included relief the matter was settled and would not cause disruption in key economic sectors or to consumers.

The Federal Reserve and the Office of the Comptroller of the Currency will hold a joint public meeting to collect stakeholder feedback on a proposed merger between Capital One Financial Corp. and Discover Financial Services. The agencies also announced a second extension to the public comment period for the proposal through July 24.

The House Committee on Rules announced plans to review H.R. 4763, the Financial Innovation and Technology for the 21st Century Act, which some legislators believe will be a crucial initial step toward regulatory transparency pertaining to digital assets.

United Wholesale Mortgage (UWM) announced the launch of its new “0% Down Purchase,” a program that allows borrowers to purchase a home without a down payment. UWM is the largest mortgage lender in the country and hosts the largest annual mortgage broker event, UWM Live!, which is where it announced its new zero-down mortgage offering.

Floify recently appointed Jason Mapes to be the head of sales for the mortgage industry's leading point-of-sale (POS) solution company. Mapes, who previously served as director of sales for nCino’s Mortgage Suite, brings 23 years of experience to the helm of Floify’s national sales initiatives.

Nonbank mortgage activity and the use of automated tools in lending decisions are among the main focal points in the Financial Stability Oversight Council’s (FSOC) annual report summarizing key vulnerabilities in the financial system and recommendations for mitigating risks, as well as the council’s activities in 2023. Regulators commented on the need for FSOC to have more tools to help stem emerging financial stability risks.

Companies that embrace change and stay adaptable during market shifts are the ones that will succeed and grow. That’s the message Taylor Morrison Executive Vice President and President of Financial Services Tawn Kelley plans to deliver in her keynote address at the National Settlement Services Summit (NS3) May 21-23 in Naples, Fla.

Executive compensation at some of the country’s largest banks is the subject of a new proposal by federal banking regulators. The proposed rule would implement one of the last remaining provisions of the Dodd-Frank Act and requires approval from six regulatory agencies. The Federal Deposit Insurance Corp. voted 3-2 in favor of putting the notice of proposed rulemaking out for comment despite having secured support from only four of the six required federal agencies.

U.S. Bancorp, the parent company of U.S. Bank, recently named its new president. She will bring her 27 years of financial services experience to her new role overseeing the company’s three business lines and will be tasked with ensuring the company maintains a shared focus on growth and holistic client experiences across its entire network. With more than $657 billion in total assets, U.S. Bank ranks fifth among the country’s largest banks, according to Federal Reserve data as of September 2023.

Multiple federal regulatory agencies recently announced news about leadership developments and other matters related to personnel. Get acquainted with these matters and more in this regulatory roundup.

A new report from Reuters showed a majority of economists expect two cuts to the U.S. Federal Reserve’s key interest rate, with the first coming this fall. Those results were collected during a May 7-13 poll and represent a significant leap in the number of economists forecasting a rate cut this year. In April, approximately half of respondents held that view.

To support third-party risk management efforts among community banks, the three federal banking agencies unveiled a comprehensive guide to help those institutions navigate the complexities associated with third-party relationships. The guide highlights a host of considerations institutions are encouraged to keep in mind during the third-party relationship lifecycle.

The Consumer Financial Protection Bureau fined Chime, a large nonbank financial institution, for failing to provide timely balance refunds to consumers who closed their accounts. The bureau reported many customers endured significant financial stress as a result of the refund delays, some of which spanned several weeks or even months.

State and federal regulators entered into a written agreement with First Citizens Bank of Butte requiring the Montana-based financial institution to address deficiencies in its risk management policies and practices to comply with Bank Secrecy Act/anti-money laundering regulations under the Dodd-Frank Act.

Reiterating the two agencies’ continuing cooperation on consumer protection matters, the Federal Trade Commission and the Federal Communications Commission (FCC) signed a memorandum of understanding following the FCC’s recent decision to restore net neutrality.

Financial trade advocates joined together to detail their opposition to the treatment of digital assets under a policy enacted by the Securities and Exchange Commission more than two years ago. The four trade organizations called on Congress to do away with the policy in a recent comment letter. Additionally, a recent hearing about the Consumer Financial Protection Bureau’s rulemaking activities on various fees served as an opportunity for one trade group to reiterate its strong opposition to what it contends to be the bureau’s politically motivated policy agenda. Read about these industry developments and more in this roundup.

Eleven trade groups representing all corners of the real estate industry expressed support for the newly inaugurated Bipartisan Congressional Real Estate Caucus. The four legislators credited with creating the caucus said it will be tasked with addressing the lack of housing affordability and inventory across the country.

As data and cyber security issues continue to rise, hackers use every opportunity to compromise private consumer data, and affected companies are left to clean up the damage. A case out of U.S. District Court for the Eastern District of Pennsylvania may be a good indicator on how courts are approaching settlements for these incidents, including how much the attorneys are paid. A judge reinstated the attorney fee award given in a class action suit after it was vacated by the Third Circuit Court of Appeals. The judge who reinstated the $3.2 million award had been tasked with re-considering its reasonableness.

While the real estate industry adapts to the structural changes coming its way, the Consumer Financial Protection Bureau’s Office of Research conducted laboratory experiments to investigate the effects of price complexity on market outcomes. Results indicated consumers paid more when closing costs were split into sub-prices, and the more complex the pricing structure, the worse the buyers fared.

Houston’s largest credit union, Texas Dow Employees Credit Union, recently entered into an agreement to acquire Sabine State Bank and Trust Co., a commercial bank with more than $1.2 billion in total assets. Mergers involving tax-exempt credit unions acquiring banks have been a source of contention and legal debate in the past, and this one is no exception.

Hope Bancorp, Inc. and Territorial Bancorp Inc. jointly announced a definitive merger agreement, expected to create the largest regional bank catering to multi-ethnic customers across the continental U.S. and the Hawaiian Islands. Hope Bancorp said it intends to preserve Territorial’s 100-plus year legacy in Hawaii, including its brand name, culture and commitment to local communities, in a joint press release announcing the deal.

Federal regulators are constantly researching products, fees and policies to assess whether they align with current laws and regulations. Two agencies recently published reports that could be of interest to secondary market participants and consumers with health savings accounts. Find out more about these studies, as well as other recent developments from regulatory agencies that may have evaded the major news headlines.

The Federal Housing Finance Agency recently launched its new division of public interest examination to provide oversight of the agency’s regulated entities with respect to affordable housing, community development, diversity and inclusion, consumer protection and fair lending.

As the Federal Reserve announced for the sixth straight month that interest rates will remain unchanged, the agency signaled its plans to shift its approach to tackling inflation. This will entail reducing the amount of Treasury securities held on its balance sheet through a process commonly referred to as quantitative tightening. Fed Chair Jerome Powell offered a detailed explanation of the decision, and Mortgage Bankers Association Chief Economist Michael Fratantoni commented on the implications.

The U.S. banking system made it through the first quarter of 2024 without a single bank failure, which is good news after a year in which there was at least one failure per quarter. On April 26, the Federal Deposit Insurance Corp. announced Republic First Bank as the first institution to fail this year. Fulton Bank, National Association of Lancaster, Pa., absorbed all assets and branches previously belonging to the Philadelphia-based regional bank.

The federal banking agencies extended the public comment period for Capital One Financial Corp.’s application to acquire Discover Financial Services. The decision aligns with federal regulators’ stated intent to increase scrutiny over mergers that could result in banks with more than $100 billion in total assets.

The Government Accountability Office’s (GAO) opinion on the Consumer Financial Protection Bureau’s financial statements and related internal controls found relevant materials reliable and controls effective. It also provided an update on the 60 recommendations the GAO has made over the years to improve the bureau’s operations.

Financial trade organizations have their sights trained on several pressing regulatory issues that were not as widely publicized as others but are still critical to their operations. In this roundup, we examine what some of the largest associations representing banks and credit unions have to say about potential rulemaking activities and pending legislative matters that could affect their members’ businesses.

The Federal Housing Finance Agency released a new final rule codifying the agency’s fair lending oversight requirements for the secondary mortgage market. The rule is the culmination of the government-sponsored enterprises’ progress since 2022 on policies to ensure all borrowers and renters have access to fair, sustainable and equitable housing opportunities.