Since the Great Recession, the regulation of residential mortgages and those who service them have been in sharp focus. Legislators and regulators continue to demonstrate an abiding mistrust in the servicing industry a full decade after the financial collapse—imposing and then tinkering with a regulatory scheme that is challenging for most people (and most lawyers,… Continue Reading
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Update: The CFPB’s Proposed Arbitration Rule—Dead or Alive?
Posted in CFPBUpdate (August 28, 2017): A lot has happened since our original post on the CFPB’s arbitration rule, and more is on the way. The CFPB’s arbitration rule is definitely alive and breathing, for the time being: The CFPB published its long-awaited arbitration rule on July 19, which, as discussed in more depth below, regulates arbitration agreements… Continue Reading
No Credit History, No Problem: CFPB Ponders Novel Credit Scoring Ideas
Posted in CFPB, Credit CardsLast month, the CFPB issued a Request for Information (“Request”) to identify potential ways to increase credit access for underserved segments of the population. In particular, the CFPB noted that certain groups of individuals lack enough credit history to obtain a reliable credit score. While the CFPB’s Request was primarily directed at the financial services industry,… Continue Reading
The Future of the CFPB Under the Trump Administration
Posted in CFPB, Trending News, UDAAPUpdate (2/16/17): The U.S. Court of Appeals for the District of Columbia granted the CFPB’s request to reconsider its earlier ruling with respect to the President’s ability to remove the Director of the CFPB. This ruling provides a glimmer of hope for the continuity of the CFPB’s leadership. Oral argument is set for May 24,… Continue Reading
Compliance with Fair Lending Laws: It’s All About the Data
Posted in CFPBWhen the Consumer Financial Protection Bureau (CFPB) decided that it would enforce fair lending laws by using proxy-based methodologies to determine fair lending compliance, it spawned a whole new area of compliance that focuses almost entirely on data analysis. Fair Lending Laws Fair lending laws govern a wide range of a financial institution’s loan transaction… Continue Reading
Citing Operational Challenges, CFPB May Rewrite TRID
Posted in CFPB, Compliance Resources, Mortgage Servicing, Regulatory Developments, TILA/RESPA, Trending NewsToday, the CFPB issued a letter to various industry trade groups, including the Mortgage Bankers Association, the American Bankers Association, and the Independent Community Bankers of America, acknowledging that the implementation of the “Know Before You Owe” rule (otherwise known as “TRID”) poses many “operational challenges.” Many financial institutions and industry participants do not have… Continue Reading
CFPB Finds “Deceptive” Data Security Practices Without Consumer Harm and Requires Dwolla to Implement a Written Data Security Plan
Posted in CFPBOn February 16, 2016, the Consumer Financial Protection Bureau (CFPB) issued a Consent Order relating to certain “deceptive” acts and practices of Dwolla, Inc., an Iowa based payment processor (Dwolla). Dwolla operates a software platform that enables “real time” funds transfers through a digital network that connects banks and credit unions. According to the CFPB,… Continue Reading
CFPB Director’s Statement About TRID Liability Does Not Resolve Uncertainty in the Secondary Market
Posted in CFPB, TILA/RESPASince October 3, 2015, which was the effective date of the TILA-RESPA Integrated Disclosure Rules (TRID), banks and members of the mortgage industry have continued to work hard to implement TRID. But for those who have attempted to seek liquidity by selling mortgage loans in the secondary market, the transition to TRID has not been… Continue Reading
CFPB Issues Final Home Mortgage Disclosure Act Rule
Posted in CFPB, HMDA, Mortgage Servicing, Regulatory Developments, Trending NewsThe CFPB issued a final rule changing Regulation C, which implements the Home Mortgage Disclosure Act (HMDA) today. This is significant because HMDA requires certain institutions to collect, report, and disclose information about their mortgage lending activity. The CFPB and other banking regulators will use the reported data to determine whether financial institutions are serving… Continue Reading
CFPB Expands the Definition of Qualified Mortgages for Small Creditors
Posted in CFPB, Mortgage ServicingOn September 21, 2015, the Consumer Financial Protection Bureau (“the CFPB”) finalized several changes to the mortgage rules that impact community banks and credit unions. The CFPB proposed these rules in January to help smaller banks and credit unions lend in rural and underserved areas. The effective date for this proposed rule (with additional clarifications… Continue Reading
Beware: Data Breaches May Expose You to UDAP Liability
Posted in CFPB, Cybersecurity, Regulatory Developments, Trending News, UDAAP
Recently, the U.S. Court of Appeals for the Third Circuit ruled that the Federal Trade Commission (FTC) may pursue a lawsuit against Wyndham Worldwide Corporation, a hotel and time share operator for “unfair and deceptive” cybersecurity practices. In its complaint, the FTC alleged that Wyndham “unreasonably and unnecessarily” exposed consumers’ personal data in more than… Continue Reading
Mortgage Loan Rate Locks: A New Risk Environment Under TRID
Posted in CFPB, Mortgage Servicing, Regulatory Developments, TILA/RESPAThe Consumer Finance Protection Bureau’s (the “CFPB”) amendments to the 2013 TILA-RESPA Integrated Disclosure Rule (“TRID”) will become effective on October 3, 2015. The amendment extends the timing requirement for revised disclosures when consumers of mortgage loans lock a rate or extend a rate lock after the Loan Estimate is provided. Lenders can now provide… Continue Reading
Updated Compliance Resources for the TILA-RESPA Integrated Disclosure Rule
Posted in CFPB, Compliance Resources, Mortgage Servicing, Regulatory Developments, TILA/RESPA, Trending NewsAs many of you know, the effective date of the TILA-RESPA Final Rule and the related TILA-RESPA Amendments has been delayed to October 3, 2015. Please take note of the following updates from the CFPB: Freddie Mac and Fannie Mae Data Standards Freddie Mac and Fannie Mae have released a common industry dataset, called the… Continue Reading
CFPB Expands Its Jurisdiction to Include Nonbank Auto Finance Companies
Posted in Auto Finance, CFPB, TILA/RESPA, UDAAP, UncategorizedOn June 10, 2015, the CFPB published a rule that will allow the agency to supervise nonbank auto finance companies that make, acquire or refinance 10,000 or more loans or leases a year. This rule was originally proposed in September 2014 and is the fifth in a series of rulemakings to define larger participants of markets… Continue Reading
CFPB Fines PayPal $25 Million for Violations of UDAAP
Posted in CFPB, Regulatory Developments, UDAAPOn May 19, 2015, the CFPB announced that it was filing a complaint and proposed consent order in federal court against PayPal, Inc., based on allegations that PayPal Credit (fka “Bill Me Later”), had violated the prohibition against unfair, deceptive, abusive acts and practices (UDAAP). This filing is noteworthy for two reasons. First, it was… Continue Reading
CFPB Allows Consumers to Publish Complaint Narratives in CFPB’s Public Database
Posted in CFPB, Compliance Resources, Regulatory Developments
Dodd-Frank empowered CFPB to treat consumer complaints as an integral part of CFPB’s mission. As of March 1, 2015, CFPB has handled 558,800 complaints on many consumer financial products, including credit cards, mortgages, bank accounts, private student loans, vehicle and other consumer loans, credit reporting, money transfers, debt collection and payday loans. Despite objections from… Continue Reading
Spotlight on TILA’s Duty to Provide Timely Mortgage Payoff Statements
Posted in CFPB, Mortgage Servicing, Regulatory Developments, TILA/RESPA
Given the growing complexity of the mortgage servicing rules faced by both bank and non-bank mortgage servicers, it is worthwhile to shine a spotlight on some rules which at first glance seem fairly straight forward, but upon scrutiny, require more analysis. As previously discussed on this blog, the CFPB amended the Truth in Lending Act (TILA)… Continue Reading
Mortgage Industry Continues to Face New Regulatory Proposals in 2015
Posted in Basel III, CFPB, Mortgage Servicing, Regulatory Developments, TILA/RESPACFPB Proposes to Give Relief to Small Lenders On January 29, 2015, in response to comments from industry groups and stakeholders, the CFPB proposed amendments to certain mortgage rules that were issued in 2013. The CFPB will take comments until March 30, 2015 on these proposed rules. The proposed rule expands the CFPB’s definition of… Continue Reading
CFPB Issues Regulations Governing the Use and Disclosure of Confidential Supervisory Information
Posted in CFPB, Regulatory Developments
Yesterday, the CFPB issued CFPB Compliance Bulletin 2015-01 (“Bulletin 2015-01”). The purpose of the bulletin was two-fold. First, the CFPB reminded “supervised” financial and nonbank institutions that are in possession of confidential information, including Confidential Supervisory Information (“CSI”) that they may not disclose such information to third parties. Second, the CFPB warned these entities that… Continue Reading
Proposed Expansion of Military Lending Act Protections Would Increase Burden on Banks and Credit Unions
Posted in CFPB, Regulatory DevelopmentsIn a previous blog post, we noted that the Department of Defense (DOD) has proposed expanding the scope of Military Lending Act (MLA) protections to service members and their dependents on all payday loans, vehicle title loans, refund anticipation loans, deposit advance loans, installment loans, unsecured open-ended lines of credit, and credit cards. In 2007,… Continue Reading
CFPB Proposes Additional Restrictions for Mortgage Servicers
Posted in CFPB, Mortgage Servicing, Regulatory DevelopmentsOn November 20, 2014, the CFPB proposed several amendments to the mortgage servicing rules under Regulation X and Regulation Z, after previously implementing amendments to these regulations in January, 2014. As previously described in this blog, the prior amendments addressed 9 key areas and included rules governing the transfer of servicing between servicers. The new… Continue Reading
CFPB Pursuing Mortgage Servicers with UDAAP
Posted in CFPB, Mortgage Servicing, Regulatory Developments, UDAAPOn September 29, 2014, the CFPB took action against Flagstar Bank for violating the CFPB’s new mortgage servicing rules by “illegally blocking borrowers’ attempts to save their homes.” The CFPB focused on the Flagstar’s actions from 2011 to present and found that Flagstar failed to devote sufficient resources to administering loss mitigation programs for distressed… Continue Reading
CFPB: Big Changes to the Mortgage Servicing Rules
Posted in CFPB, Mortgage Servicing, Regulatory Developments, TILA/RESPAOn October 22, 2014, the CFPB finalized amendments granting nonprofit small servicers an exemption from new mortgage servicing rules. These mortgage servicing rules are part of several rules regulating mortgages, including the Ability-to-Repay rules, that went into effect on January 10, 2014. The servicing related changes impacts nine key areas: Periodic billing statements Interest rate… Continue Reading
Welcome to Bank Law Monitor: A Legal Blog for the Financial Services Industry
Posted in Auto Finance, CFPB, Compliance Resources, Credit Cards, Debt Collection, Marijuana, Mortgage Servicing, Overdrafts, Regulation AB, Regulatory Developments, TILA/RESPA, Trending News, UDAAPWelcome! Graham & Dunn’s Financial Services team is pleased to announce the launch of Bank Law Monitor, a legal blog for the financial services industry. Bank Law Monitor will analyze regulatory developments, report on significant news and market trends, and monitor upcoming regulatory changes that impact the financial services industry. Our goal is to help… Continue Reading