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Dodd-Frank, CFPB having significant impact on community banks, survey finds
Posted Date: Wednesday, March 5, 2014
The Dodd-Frank Act is leading to increased compliance costs for community institutions, according to the results of a nationwide survey of small banks conducted by George Mason University’s Mercatus Center. The survey of 200 banks with less than $10 billion in assets also finds that many institutions are concerned about the Consumer Financial Protection Bureau and are considering whether to discontinue offering certain products such as mortgages and overdraft protection. Read on to learn about the elements of Dodd-Frank that are proving most problematic for community banks.
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Republicans ready for housing finance reform debate
Posted Date: Friday, March 14, 2014
U.S. House Republicans are bracing for a debate over the government’s role in the housing finance system after a Senate committee unveiled details of forthcoming reform legislation that would maintain a federal guarantee for the secondary mortgage market. Read on for the details.
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Groups criticize elements of proposed tax reform plan
Posted Date: Wednesday, March 5, 2014
Industry groups are sounding off on portions of a sweeping tax reform plan proposed by Rep. Dave Camp, R-Mich., chairman of the House Ways and Means Committee. Associations representing bankers and other members of the financial services industry opposed provisions that would limit the tax deduction for premiums paid to the Federal Deposit Insurance Corp. by institutions with consolidated assets in excess of $10 billion. Another group expressed concern over proposed changes to the mortgage interest deduction. Read on for the details.
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Committee advances ‘rural’ petition bill
Posted Date: Tuesday, March 18, 2014
A bill that would establish a public petition process for challenging whether an area is non-rural for the purposes of the Consumer Financial Protection Bureau’s mortgage rules cleared the U.S. House Financial Services Committee with bipartisan support. The measure, HR 2672, was approved on a 55-1 vote March 14. The bill differs from an earlier version of the legislation. Read on for the details.
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CLO bill clears U.S. House committee
Posted Date: Tuesday, March 18, 2014
The U.S. House Financial Services Committee voted to advance legislation that would address the Volcker Rule’s treatment of certain collateralized loan obligations. Industry stakeholders have argued that the Volcker Rule could harm the CLO market, which is an important source of funding for U.S. companies. They also said CLOs have proven to be a safe investment for many banks, including community banks. The bill, HR 4167, cleared the committee with broad bipartisan support after Republicans agreed to a key Democrat amendment. Read on for the details.
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CFPB sues ITT, claims college chain engaged in abusive lending practices
Posted Date: Monday, March 3, 2014
The Consumer Financial Protection Bureau sued Indiana-based ITT Educational Service Inc., alleging that the for-profit college chain engaged in predatory lending in violation of Dodd-Frank’s ban on abusive practices. The agency said ITT exploited its students and pushed them into high-cost private loans that were likely to end in default. Participants in CFPB-supervised industries have been watching closely to see how the bureau enforces Dodd-Frank’s ban on abusive practices. Read on to learn about alleged activities the CFPB said constituted abuse in this case.
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Fed inspector general scrutinizing CFPB headquarters rehab
Posted Date: Friday, March 14, 2014
The inspector general for the Federal Reserve and Consumer Financial Protection Bureau is looking into the bureau’s effort to renovate its Washington, D.C., headquarters. House Republican lawmakers have argued that the project’s ballooning price tag is further evidence of the need to increase CFPB accountability. Read on for the details.
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Latest CFPB budget forecasts continued growth
Posted Date: Wednesday, March 12, 2014
The Consumer Financial Protection Bureau’s multi-year growth spurt will continue unabated in FY 2014 and begin to level off in FY 2015, according to the agency’s most recent budget estimate. The bureau’s budget comes as Republican lawmakers and industry participants clamor for increased accountability regarding the CFPB’s finances and operations. Read on for an in-depth look at the bureau’s spending plans for this year and next.
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CFPB plans payday lending hearing, launches investigations
Posted Date: Tuesday, March 18, 2014
The Consumer Financial Protection Bureau plans to hold a field hearing on payday lending in the coming days. The hearing comes amid word that the agency is investigating participants in the short-term lending space. Read on for the details.
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Lawmakers, commissioners wrangle over CFTC budget proposal
Posted Date: Monday, March 10, 2014
President Barack Obama’s plan to fund the Commodity Futures Trading Commission for FY 2015 reignited a long-running debate over the agency’s budget and priorities. The president requested a $280 million appropriation for the regulator, paring back an earlier $315 million budget proposal. Read on for the details.
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Regulators finalize Dodd-Frank stress test guidance for mid-sized banks
Posted Date: Monday, March 10, 2014
Federal banking regulators finalized guidance for mid-sized firms that are required to comply with 2012 rules implementing Dodd-Frank’s stress-testing provisions. These companies, which have total consolidated assets of between $10 billion and $50 billion, will be required to perform their first Dodd-Frank stress tests by March 31. The final guidance resembles a proposal released by the agencies last year. However, the agencies made some adjustments in response to public comments.
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OCC’s Curry stresses community bank vendor management expectations
Posted Date: Monday, March 10, 2014
Comptroller of the Currency Thomas Curry said a recent bulletin from his agency regarding vendor management is not intended to dissuade community banks from engaging in third-party relationships. However, he told attendees at the Independent Community Bankers of America Annual Convention in Honolulu that institutions will be expected to understand and address the “very significant risks” associated with third-party relationships, especially when it comes to protecting customer data. Read on for the details.
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Lenders to CFPB: FDCPA should not apply to creditors collecting their own debts
Posted Date: Wednesday, March 5, 2014
Groups representing banks and credit unions urged the Consumer Financial Protection Bureau not to extend provisions of the Fair Debt Collection Practices Act to creditors collecting their own debts. The FDCPA generally applies to third-party debt collectors. However, the CFPB indicated in a recent rulemaking proposal that it might consider extending certain consumer protections to ensure that borrowers are treated fairly by all debt collectors, regardless of whether the collector is the creditor, a collector working on behalf of the creditor or a debt buyer. Read on for the details.
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ICBA unveils 2014 policy priorities
Posted Date: Wednesday, March 5, 2014
Relieving the regulatory burden on community institutions tops the Independent Community Bankers of America’s list of legislative and regulatory priorities for 2014. The group unveiled its 2014 policy priorities during the ICBA National Convention in Honolulu on March 4. Read on for the details
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Appeals court rules in cases involving efforts to collect on time-barred debt
Posted Date: Tuesday, March 18, 2014
The 7th U.S. Circuit Court of Appeals ruled in two cases involving attempts to collect on time-barred debt. The Consumer Financial Protection Bureau and Federal Trade Commission had filed a joint amicus brief in one of the cases, arguing that time-limited settlement offers could plausibly mislead an unsophisticated consumer to believe a debt is enforceable in court even if the offer is unaccompanied by any clearly implied threat of litigation. Read on to learn what the court decided.
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SEC defends scope of whistleblower rule’s anti-retaliation provisions
Posted Date: Wednesday, March 12, 2014
The Securities and Exchange Commission defended its view that Dodd-Frank’s whistleblower protections apply even in certain circumstances where a purported whistleblower does not report information regarding potential securities law violations directly to the commission. The 5th U.S. Circuit Court of Appeals rejected the SEC’s view in July 2013. A case before the 2nd Circuit touches on the same issue, and the SEC said the court should not adopt the 5th Circuit’s reasoning. Read on for the details.
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Hensarling presses Cordray on indirect auto lending analysis
Posted Date: Friday, March 14, 2014
The chairman of the House Financial Services Committee recently gave the Consumer Financial Protection Bureau an ultimatum: furnish details on the methodology the agency uses to assess whether fair lending violations exist in indirect auto lending or risk a possible subpoena. Read on for the details.
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OCIE director to leave SEC
Posted Date: Friday, April 10, 2015
Andrew Bowden, director of the Securities and Exchange Commission’s Office of Compliance Inspections and Examinations, which is responsible for protecting investors by administering the commission’s examination and inspection program, will be leaving the commission at the end of April. Bowden helped complete the “Presence Exam” initiative following the enactment of the Dodd-Frank Act.
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Industry group fires back at CFPB debt collection report
Posted Date: Friday, March 28, 2014
A trade group representing the third-party debt collection industry is taking issue with a recent Consumer Financial Protection Bureau report on debt collection complaints. The bureau said the complaints federal regulators receive reveal consumer harms and will help direct the agency’s consumer protection functions. However, ACA International, which represents thousands of third-party debt collectors, said the report should not be used for setting public policy.
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State AG alleges lender violated Dodd-Frank abusive practices ban
Posted Date: Friday, March 28, 2014
The Illinois attorney general has sued a short-term lender for alleged violations of Dodd-Frank’s ban on abusive practices. State AG Lisa Madigan said the Chicago-area firm offers a loan product designed to sidestep state predatory lending laws and trap unwitting borrowers in an inescapable cycle of debt. Read on to learn about the AG’s Dodd-Frank claims.
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Fed rejects handful of big bank capital plans
Posted Date: Friday, March 28, 2014
The Federal Reserve approved the capital plans of 25 of the 30 big banks subject to Dodd-Frank’s stress-test requirements and the Fed’s annual Comprehensive Capital Analysis and Review. The agency objected to plans submitted by five firms, one of which failed its stress test. Read on for the details.
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OCC releases summary of Volcker Rule TruPS CDO fix
Posted Date: Friday, March 28, 2014
The Office of the Comptroller of the Currency released a bulletin summarizing a January joint interim final rule that permits banks to retain interests in certain collateralized debt obligations backed primarily by trust preferred securities, notwithstanding the investment prohibitions of Dodd-Frank’s Volcker Rule. Read on for the details.
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OCC supplements examination procedures for derivatives risk management
Posted Date: Friday, March 28, 2014
The Office of the Comptroller of the Currency supplemented the examination procedures in its “Risk Management of Financial Derivatives” booklet. The agency said large national banks have significantly expanded their end-user derivatives and trading activities since the booklet was published in the late 1990s, requiring focused examination procedures to detect, monitor and evaluate these activities’ risks. Read on for the details.
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CFTC seeks comment on recordkeeping and reporting rules
Posted Date: Tuesday, March 25, 2014
The Commodity Futures Trading Commission is seeking public input on swap data recordkeeping and reporting requirements the agency adopted in December 2011. Republican CFTC Commissioner Scott O’Malia said the agency is not able to make good use of the data it is receiving under Dodd-Frank, and the request for comments is one of the ways the commission is attempting to fix its data problems. Read on for the details.
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CFPB builds case for payday loan reform
Posted Date: Tuesday, March 25, 2014
The Consumer Financial Protection Bureau is in the late stages of considering how it will craft rules to reform the payday lending market, according to Richard Cordray, the agency’s director. Cordray laid out the bureau’s case for regulatory action during a March 25 payday lending field hearing in Nashville, Tenn. According to Cordray, new bureau research appears to show that the payday lending business model “depends on people becoming stuck in these loans for the long term.” Read on for the details.
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Agencies release AMC state registration proposal
Posted Date: Tuesday, March 25, 2014
Six federal agencies unveiled a long-awaited proposal that would implement Dodd-Frank’s minimum requirements for state registration and supervision of appraisal management companies. Under the proposed rule, participating states would require that AMCs use only state-certified or licensed appraisers for federally related transactions. AMCs would also be required to establish processes designed to ensure that appraisals comply with the Truth in Lending Act’s appraisal independence standards. Read on for an in-depth look at the proposal.
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Sen. Collins offers bill on capital standards for insurance companies
Posted Date: Tuesday, March 25, 2014
The author of Dodd-Frank’s Collins Amendment proposed legislation that would clarify that the Federal Reserve is not required to subject state-regulated insurance companies to bank-centric capital standards. Sen. Susan Collins, R-Maine, recently told a Senate subcommittee that she is frustrated by the Fed’s insistence that it does not have authority to take into account important distinctions between insurance and banking as it implements consolidated capital standards required by Dodd-Frank. Read on for the details.
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Financial services groups applaud debit card ruling
Posted Date: Tuesday, March 25, 2014
Groups representing banks and credit unions were pleased by an appeals court’s decision last week to uphold the Federal Reserve’s current Dodd-Frank debit card swipe fee caps and network exclusivity requirements. However, a merchant group said the court “misread the law” when it overturned a July 2013 district court ruling that struck down the Fed’s debit card rules. Read on to learn about what could happen next in the case.
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Attorney highlights ATR/QM rule pressure points
Posted Date: Friday, March 21, 2014
The Consumer Financial Protection Bureau’s ability-to-repay/qualified mortgage rule went into effect more than two months ago, and while most industry participants were ready to implement the rule, certain details continue to cause confusion. On March 26, Dodd Frank Update will host a webinar focusing on these ATR/QM rule pressure points. We caught up with Paul Schieber, a shareholder at Stevens & Lee, to get a preview of some of the issues that will be discussed during the presentation. Read on for the details.
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Fitch finalizes RMBS QM and non-QM criteria
Posted Date: Friday, March 21, 2014
Fitch Ratings finalized its criteria for analyzing loans securing residential mortgage-backed securities under the Consumer Financial Protection Bureau’s qualified mortgage standards and ability-to-repay rule. Fitch has developed assumptions regarding the probability of challenges to the rule — and/or QM status — as well as the potential costs or damages. Read on for the details.
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CFPB seeks feedback on draft disclosures for prepaid cards
Posted Date: Friday, March 21, 2014
The Consumer Financial Protection Bureau has developed some draft disclosures for prepaid cards and is currently seeking public feedback on its efforts. The agency noted that current disclosures differ, making prepaid cards difficult to compare. The bureau is working to develop a model disclosure as part of a forthcoming rule proposal related to prepaid cards. Read on to learn about the bureau’s project.
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CFPB highlights debt collection market activities
Posted Date: Friday, March 21, 2014
The Consumer Financial Protection Bureau has been extremely active in the debt collection arena in recent months, fielding consumer complaints, announcing enforcement actions, filing court briefs and drafting rules. The bureau described these efforts in a Dodd-Frank-mandated report to Congress. Read on to learn about the debt collection issues the bureau said it is working to address.
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Appeals court upholds Fed debit card rules
Posted Date: Friday, March 21, 2014
A federal appeals court has reversed a July 2013 district court ruling that struck down Federal Reserve debit card swipe fee caps enacted under the Dodd-Frank Act’s Durbin Amendment. The U.S. Court of Appeals for the District of Columbia Circuit determined that Fed rules pertaining to the caps, as well as rules that implemented Dodd-Frank’s debit card network non-exclusivity provisions, “generally rest on reasonable constructions of the statute.” Read on for the details.
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Webinar to offer solutions to ATR/QM implementation issues
Posted Date: Tuesday, March 18, 2014
New mortgage rules that took effect in January are significantly impacting the mortgage, real estate and settlement services industries. In particular, the ability-to-repay/qualified mortgage final rule is causing a stir. To help ease the compliance burden, Dodd Frank Update is offering an exclusive webinar on March 26. Read on for the details.
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Volcker Rule CLO legislation introduced
Posted Date: Friday, March 14, 2014
A U.S. House Republican introduced legislation intended to address concerns related to the regulatory treatment of certain collateralized loan obligations under Dodd-Frank’s Volcker Rule. The measure, introduced by Rep. Andy Barr, would exempt CLOs issued before Jan. 31 from the Volcker Rule’s bank divestiture requirements. Democrats previously argued that such an approach could undermine the Volcker Rule. Read on for the details.
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Know your regulator: CFPB announces key hires
Posted Date: Friday, March 14, 2014
The Consumer Financial Protection Bureau announced it has filled three senior agency positions, including the assistant director for the Office of Research, the assistant director for the Office of Financial Empowerment and the assistant director for the Office of Installment and Liquidity Lending Markets. Read on to learn about the new CFPB hires.
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CFPB releases housing counselor list source code
Posted Date: Friday, March 14, 2014
The Consumer Financial Protection Bureau released source code lenders can use to build their own tools that will allow users to find housing counselors. The CFPB’s Home Ownership and Equity Protection Act rule requires lenders to provide applicants for federally related mortgages with a list of housing counseling agencies that are approved by the Department of Housing and Urban Development. Read on for the details.
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CFPB plans debt collection survey
Posted Date: Friday, March 14, 2014
The Consumer Financial Protection Bureau plans to conduct a first-of-its-kind survey to learn about consumers’ experiences with the debt collection industry. The proposed survey is intended to inform the bureau’s debt collection rulemaking. The survey comes as lawmakers question the bureau’s data-gathering efforts. Read on for the details.
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Webinar to discuss mortgage form implementation
Posted Date: Wednesday, March 12, 2014
The mortgage and title insurance industries will soon begin to feel the sting of implementing the Consumer Financial Protection Bureau’s integrated mortgage disclosures. Dealing with new regulations will be a challenge, but planning ahead and following the advice of industry experts can lead companies to a smooth transition and successful implementation. The Title Report, Dodd Frank Update’s sister publication, and sponsor WFG National Title Insurance Co. are offering an exclusive webinar on March 19 to provide title companies instruction on implementing the forms. Read on for the details.
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Senate committee leaders announce housing finance reform agreement
Posted Date: Wednesday, March 12, 2014
The Democrat and Republican leaders of the Senate Banking Committee released long-awaited details of a plan to overhaul the nation’s housing finance system and wind down government sponsored enterprises Fannie Mae and Freddie Mac. The text of the draft legislation is expected to be finalized soon, and committee leaders plan to hold a markup hearing on the bill in the coming weeks. Read on to learn about the legislation.
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Debt collection letter could have misled ‘least sophisticated consumer,’ agencies say
Posted Date: Wednesday, March 12, 2014
Two federal agencies with authority to enforce the Fair Debt Collection Practices Act have weighed in on an appeals court case involving a company’s effort to collect on time-barred debt. The Federal Trade Commission and Consumer Financial Protection Bureau argued in a recent amicus brief that a district court erred when it determined that a letter sent to a debtor could not have misled “the least sophisticated consumer” regarding the prospect of future legal action. Read on for the details.
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ABA concerned about MSRB muni adviser conduct proposal
Posted Date: Wednesday, March 12, 2014
The American Bankers Association has significant concerns with a rule proposal that would establish standards of conduct and duties for municipal advisers. The proposal, released for comment by the Municipal Securities Rulemaking Board, would prohibit a municipal adviser and any of its affiliates from acting as principal in any transactions with municipal entities or obligated persons. The ABA called on the MSRB to narrow that prohibition. Read on for the details.
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Wells Fargo backs ALTA Best Practices
Posted Date: Monday, March 10, 2014
Wells Fargo announced it supports the American Land Title Association’s Best Practices. The lender said they are guidelines for sound business practices that should ideally already be in place for businesses that provide title and closing services. Read on for the details.
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Credit unions voice concern over proposed risk weights
Posted Date: Monday, March 10, 2014
Two trade groups asked the National Credit Union Administration to extend the comment period for a proposal that would alter the agency’s prompt corrective action framework by replacing its current risk-based net worth requirements with new risk-based capital requirements. The comment period is currently scheduled to close at the end of May. Read on to learn what industry participants have been saying about the proposal so far.
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FDIC chair says community bank business model remains viable despite consolidation
Posted Date: Monday, March 10, 2014
The banking industry experienced substantial consolidation in recent years, leading to concerns about the reduction in the number of community banks and the viability of the community bank business model. During the Independent Community Bankers of America National Convention in Honolulu, Federal Deposit Insurance Corp. Chairman Martin Gruenberg shared findings from a yet-to-be-released agency report indicating that, despite consolidation, the community bank sector has remained stable over the past three decades. Read on for the details.
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ICBA asks regulators to expand Volcker Rule TruPS fix
Posted Date: Wednesday, March 5, 2014
The Independent Community Bankers of America commended regulators for issuing an interim final rule that prevented many smaller institutions from having to immediately write down certain investments under Dodd-Frank’s Volcker Rule. However, the group said in a comment letter that regulators should broaden the interim final rule’s exemption regarding investments in collateralized debt obligations backed primarily by trust-preferred securities and issue guidance on what constitutes an “ownership interest” in a “covered fund” for the purposes of the Volcker Rule. Read on for the details.
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Fidelity National Title Group returns as Summit presenting sponsor
Posted Date: Monday, March 3, 2014
Erica Meyer, chief executive officer and publisher of October Research LLC, announced that Fidelity National Title Group has signed on as the presenting sponsor for the 10th Annual National Settlement Services Summit, making this the third consecutive year the company has taken on this central role. Read on for the details.
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Know your regulator: CSBS names new NMLS ombudsman
Posted Date: Monday, March 3, 2014
The Conference of State Bank Supervisors named a new ombudsman for the Nationwide Mortgage Licensing System and Registry. The NMLS ombudsman provides industry participants and other interested parties with a neutral venue to discuss issues or concerns regarding NMLS use and policies governing the system. Read on to learn about the new NMLS ombudsman.
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FDIC releases interagency mortgage rule exam manual
Posted Date: Monday, March 3, 2014
The Federal Deposit Insurance Corp. released revised interagency consumer compliance examination procedures for new Dodd-Frank mortgage rules that recently took effect. The FDIC said the procedures should be helpful to financial institutions seeking to better understand the areas the FDIC will focus on as part of the examination process. Read on for the details.
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CFPB overhaul bill approved in U.S. House
Posted Date: Monday, March 3, 2014
The U.S. House approved a legislative package that would significantly alter the Consumer Financial Protection Bureau’s leadership structure and funding process. The bill, HR 3193, passed 232-182 on Feb. 27. Read on for the details.
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Lawmakers weigh impact of risk retention, Volcker Rule on CLOs
Posted Date: Monday, March 3, 2014
Dodd-Frank’s Volcker Rule and credit risk retention provisions could impair the ability of many companies to obtain the financing they need to operate and grow their businesses, according to industry representatives who testified during a recent U.S. House subcommittee hearing. Republicans and Democrats acknowledged the need to address the regulatory treatment of collateralized loan obligations, which serve as a major source of funding for hundreds of companies that employ millions of workers. However, they disagreed over the actions needed to ensure that market participants can continue to use CLOs in a manner that will promote U.S. financial stability. Read on for the details.
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