Federal regulators are constantly addressing issues facing financial
institutions of all sizes. In this roundup, learn about recent developments and
remarks pertaining to some of the largest banks in the world, as well as
smaller, community-based institutions.
FHFA seeks feedback on proposed mortgage product from
Freddie Mac
The Federal Housing Finance Agency (FHFA) sent a notice of a
proposed new product from Freddie Mac that would allow the government-sponsored
enterprise (GSE) to begin purchasing certain single-family closed-end second
mortgages. According to a statement issued by FHFA Director Sandra Thompson, the
new product would “provide homeowners with a cost-effective alternative for
accessing the equity in their homes,” Freddie Mac is proposing to purchase
closed-end second mortgages on properties for which it already holds the first
mortgage. Learn more here.
Fed governor speaks at community banking conference
Federal Reserve Gov. Michelle Bowman spoke about
developments affecting the community banking sector during a recent conference
in New York City. She covered challenges and risks facing the modern banking
landscape, issues related to risk management and contingency funding, and risks
associated with shortcomings in bank supervision. Bowman said the banking
sector should “acknowledge that changes to supervisory expectations and
processes, coupled with the sheer volume of recent regulatory and supervisory
reforms and proposed reforms, will undoubtedly present additional challenges
and risks for banks.” Her complete comments are available here.
FDIC participates in international G-SIB exercise
The Federal Deposit Insurance Corp. (FDIC) joined an
international group of financial regulators that included the heads of
resolution, regulatory and supervisory authorities, central banks and finance
ministries from the United States, the United Kingdom and the European Banking
Union. The regulators participated in a “Trilateral Principal Level Exercise”
(TPLE) as part of a series of regular exercises and exchanges among the
principals of these key financial sector authorities to enhance understanding
of each jurisdiction’s resolution regime for global systemically important
banks (G-SIBs). They also sought to determine ways to strengthen coordination
on cross-border resolution and to promote confidence in and commitment to the
orderly resolution of G-SIBs. Find out more details here.
CFPB takes action against coding bootcamp
The Consumer Financial Protection Bureau (CFPB) issued an
order against BloomTech and its CEO, Austen Allred, for deceiving students
about the cost of loans and making false claims about graduates’ hiring rates,
according to a recent press release. The bureau determined that students were
falsely told the school’s “income share” agreement contracts were not loans, although
the agreements were, in fact, loans carrying an average finance charge of approximately
$4,000. BloomTech and Allred allegedly baited prospective students with
inflated promises of job placement rates as high as 86 percent. The company’s
internal metrics showed its placement rates were closer to 50 percent and, in
some cases, as low as 30 percent. BloomTech and Allred agreed to pay more than
$164,000 in civil penalties to the CFPB’s victims relief fund. Read more here.