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News By Edition
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Dodd Frank Update Monthly Edition
Dodd Frank Update September 2015
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Richard Davis: Regulation might not be as bad as it seems
Posted Date: Friday, August 7, 2015
It’s all in the attitude. At October Research, LLC’s National Settlement Services Summit earlier this summer, U.S. Bancorp Chairman, President and CEO Richard Davis spoke about the pros and cons of our current regulatory landscape and what he thinks the financial and settlement services industries can do to lead the country out of the Great Recession.
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CFPB to Citizens: Double check the math
Posted Date: Friday, August 14, 2015
The Consumer Financial Protection Bureau, Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency each took action against Citizens Bank for failing to credit consumers the full amounts of their deposit funds. The bank’s policy on double checking discrepancies on deposit slips and deposit materials was found to allow $12.3 million in consumer deposits to go uncredited.
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Telling consumers U.S. laws don’t apply won’t save you, CFPB complaint says
Posted Date: Friday, August 7, 2015
In some cases when the Consumer Financial Protection Bureau has cited companies for committing unfair or deceptive acts under Dodd-Frank Act’s prohibition against “unfair, deceptive or abusive acts of practices” (UDAAP), the standard has been difficult to read. In its latest enforcement, however, the bureau cited a company for deceptive acts for telling customers it did not have to comply with U.S. laws, when it did. Read on to find out the consequences.
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New MLA will expand protections for servicemembers
Posted Date: Friday, July 24, 2015
The Department of Defense issued a final rule amending the provisions of the Military Lending Act. The amendments will extend the act’s protections to a broader range of closed-end and open-end credit products and change the definition of “consumer credit.” The final rule also amends the consumer verification process. Read on to learn more.
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Loss mitigation problems lead to enforcement against mortgage servicer
Posted Date: Tuesday, August 4, 2015
A mortgage servicing company will pay $1.5 million in restitution, along with a $100,000 civil penalty, as a result of an enforcement action handed down by the Consumer Financial Protection Bureau. The bureau cited the servicer for misrepresentations in its loss mitigation programs and communications with consumers. Read on to find out what steps the servicer could have taken to avoid the enforcement action.
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CFPB denies lead generator’s petition to set aside CID
Posted Date: Friday, August 14, 2015
Selling Source, LLC, a lead generating company, had petitioned the Consumer Financial Protection Bureau (CFPB) to set aside or modify a civil investigative demand (CID) that the CFPB issued in May and June 2015. The CFPB has denied that petition. Read on to find out the reasons why the bureau would not set aside the CID despite the company arguing it is not a “covered person” or a “service provider” over which the bureau has jurisdiction.
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Lenders have work to do on eClosings
Posted Date: Friday, August 7, 2015
The results from the Consumer Financial Protection Bureau’s eClosing pilot program are in. With October Research, LLC in attendance for a forum at the bureau’s headquarters, findings from the report included a surprising gap that lenders need to close to make eClosings a reality. Read on to see the details, and where the bureau wants the industry to go.
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Wells, Prospect to exit MSAs, are more lenders to follow?
Posted Date: Thursday, July 30, 2015
Marketing Services Agreements, better known as MSAs, have come under a lot of scrutiny in recent years given the amount of attention paid by the Consumer Financial Protection Bureau and other regulators. Wells Fargo and Prospect Mortgage each announced that they will be phasing out their MSAs. Are their decisions a sign of things to come? Or does their exit plans provide an opportunity for other lenders? Read on for more details.
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Revisiting the CFPB’s constitutionality: Why State National Bank is different from Morgan Drexen
Posted Date: Friday, July 31, 2015
The U.S. Court of Appeals for the District of Columbia Circuit held that State National Bank, a bank in Texas, has standing to challenge the constitutionality of the Consumer Financial Protection Bureau. Read on to find out about the details of the decision, how it differs from the decision regarding Morgan Drexen and what attorney Joseph Lynyak, III had to say about its possible ramifications.
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PHH Corp. joins constitutionality debate
Posted Date: Friday, August 7, 2015
Hopping on the Constitutionality bandwagon, PHH Corp. received a stay of the Consumer Financial Protection Bureau’s administrative decision requiring the mortgage company to pay a $109 million penalty for its reinsurance kickback scheme. The stay will postpone the company’s payment requirement while they challenge the bureau’s constitutionality.
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MBA says lenders still waiting for TRID software
Posted Date: Friday, July 31, 2015
A recent informal survey by the Mortgage Bankers Association showed that as summer began, two-thirds of lenders still were waiting for code or software from vendors. What should lenders who are behind do? What stories can vendors share to make their voices heard at the Consumer Financial Protection Bureau?
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Cruz, Ratcliffe introduce bill to eliminate CFPB
Posted Date: Friday, July 24, 2015
There’s nothing like a piece of legislation that has little chance of being passed within this Congress, but one must give Sen. Ted Cruz (R-Texas) and Rep. John Ratcliffe (R-Texas) a “recognition trophy” for the effort. The two lawmakers have introduced legislation that aims to eliminate the Consumer Financial Protection Bureau. Read on for more details.
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OFR, Cleveland Fed seek papers for financial stability conference
Posted Date: Friday, August 21, 2015
The Office of Financial Research and the Federal Reserve Bank of Cleveland are seeking research and policy-oriented papers for the 2015 Financial Stability Conference that will be held Dec. 3-4 in Washington, D.C. For more information about the conference topics and how to submit research papers, read on.
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CFPB, FTC file amicus brief in FDCPA case
Posted Date: Friday, August 21, 2015
The Consumer Financial Protection Bureau and the Federal Trade Commission have filed an amicus brief with the U.S. Court of Appeals for the Third Circuit in Bock v. Pressler & Pressler, LLP, which is a case involving a claim under the Fair Debt Collection Practices Act against a debt-collection law firm that filed a complaint against the consumer. The agencies argued that an attorney’s four-second review of a complaint does not constitute meaningful attorney involvement under the law. Read on for more details.
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FTC commissioner stepping down
Posted Date: Friday, August 21, 2015
Federal Trade Commission Commissioner Joshua Wright has announced that he will leave his post. A Republican appointee to the five-person commission, Wright announced his future plans and had words for the agency he leaves behind. Read on for all the details.
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FTC to host workshop on lead generation
Posted Date: Friday, August 21, 2015
The Federal Trade Commission is seeking research, recommendations for discussion topics and requests for panelists for a workshop focusing on lead generation. The workshop, titled “Follow the Lead: An FTC Workshop About Online Lead Generation,” will focus on the growing use of online lead generation in various industries, including consumer lending and education. Read on for more details about the workshop and how to submit recommendations.
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CFPB rolls out second phase of ‘Managing Someone Else’s Money’ initiative
Posted Date: Friday, August 21, 2015
Building on a set of guides released in 2013 for people who take on the financial duties of friends or family members, the bureau is in the process of creating state-specific guides to give lay fiduciaries even more tools and resources to comply with laws and procedures in their states. Read on to find out which states will receive the tailored guides first.
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Dallas Fed gets new president
Posted Date: Friday, August 21, 2015
The Federal Reserve Bank of Dallas announced a new president, who will take over from Richard Fisher beginning Sept. 8. The new president will represent the district on the Federal Open Market Committee. Read on to find out who received the nod.
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FTC takes aim at data brokers who sold payday applicant information
Posted Date: Tuesday, August 18, 2015
The Federal Trade Commission (FTC) charged two companies and their managers for illegally selling payday loan applicants’ financial information to scammers who took money from consumers by debiting their bank accounts and charging their credit cards without their consent. The FTC’s complaint did not name the company performing the unauthorized billing, but instead the providers of consumer information.
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World Acceptance discusses potential CFPB enforcement
Posted Date: Tuesday, August 18, 2015
In a filing with the Securities and Exchange Commission, World Acceptance Corp. announced that it received a letter from the Consumer Financial Protection Bureau on Aug. 7, in which the bureau notified the company that its Enforcement Office was considering recommending that the bureau take legal action against the company for alleged violations of the Dodd-Frank Act’s prohibition of “unfair, deceptive or abusive acts or practices.”
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Calyx announces TRID-ready PointCentral 9.2
Posted Date: Tuesday, August 18, 2015
Calyx Software, a mortgage software solutions provider for banks, credit unions, mortgage bankers, and wholesale and correspondent lenders and brokers, announced the release of PointCentral Version 9.2. Under this new version, mortgage lenders using PointCentral can originate loans and deliver TRID-compliant Loan Estimates and Closing Disclosures immediately. The solution also provides compliance management and allows customers to lock and confirm data through a pricing and underwriting engine, connect with top mortgage service providers and have questions answered quickly through free, unlimited live support.
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GSE examiner training program fails to make grade
Posted Date: Tuesday, August 18, 2015
About halfway into the Federal Housing Finance Agency’s implementation of a plan to train employees to more effectively examine Fannie Mae and Freddie Mac, only one trainee is on track to meet the program’s requirements, and 65 other enrollees are seriously behind, the agency’s Office of the Inspector General said in a recent report examining the program’s progress. Read on to find out what other shortcomings the report identified, and what the OIG is recommending for the FHFA to keep the program on track.
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CFPB releases index of questions from TRID webinars
Posted Date: Tuesday, August 18, 2015
As lenders and settlement services agents prepare for the Oct. 3, 2015, effective date of the TILA-REPSA Integrated Disclosure (TRID) Rule, the Consumer Financial Protection Bureau has released an index of the questions received during its webinar series that addressed various TRID implementation issues. Questions discussed the Loan Estimate and Closing Disclosure, among other things.
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OIG finds control deficiencies in CFPB’s complaint database
Posted Date: Tuesday, August 18, 2015
The Office of Inspector General for the Federal Reserve and the Consumer Financial Protection Bureau has completed its review of the information system security controls of the bureau complaint database, as required by the Federal Information Security Modernization Act of 2014. The office issued seven recommendations to the bureau, finding several control deficiencies related to configuration management, access control and audit logging and review.
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Media report: CFPB wants settlement with Fifth Third Bank over auto dealer markups
Posted Date: Friday, August 14, 2015
Although both the bureau and bank have not publicly confirmed this, a recent Wall Street Journal story alleges a settlement may be looming to resolve concerns about the interest-rate markups Fifth Third Bank allows its dealer partners to make. If a settlement does occur, it will be the latest event in the CFPB’s ongoing crackdown of unfair lending practices, as it has settled similar accusations against other lenders in recent months.
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OCC releases guidance on tax-refund products
Posted Date: Friday, August 14, 2015
The Office of the Comptroller of the Currency has issued a guidance document, outlining safety and soundness measures that national banks and federal savings associations should follow if they offer tax refund-related products. The new guidance replaces a five-year-old bulletin and offers tips for compliance with three categories of risk management: risk management for all tax refund-related products; supplementary risk management for tax refund-related products involving an extension of credit (tax refund-related credit products); and supplementary risk management for tax refund-related products or services for transmitting a refund (tax refund-related deposit products). Read on to find out what you need to do to stay compliant while offering these services.
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ABA pushes agencies to adopt disparate impact framework
Posted Date: Friday, August 14, 2015
The American Bankers Association seeks a uniform application of the standard set forth by the Supreme Court’s recent decision in Texas Department of Housing and Community Affairs v. Inclusive Communities Project Inc., when determining what constitutes a pattern or practice of discrimination based on the theory of disparate impact liability. Find out why the association feels the federal agencies’ failure to apply the court’s framework may result in the “undermining the statutory goal of expanding credit opportunity and availability.”
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Senate bill aims for better small business representation in CFPB rulemakings
Posted Date: Friday, August 14, 2015
Piggybacking on its companion bill in the House of Representatives, which passed in April, a measure introduced in the Senate seeks to give small businesses, community banks and credit unions — particularly in rural areas — more of a say in Consumer Financial Protection Bureau matters. Read on to find out the particulars of the bill, and which industry trade groups are supporting it.
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Santander facing fair lending scrutiny from the CFPB
Posted Date: Tuesday, August 11, 2015
In a quarterly filing with the Securities and Exchange Commission, Santander Consumer USA Holdings Inc. announced that it was notified by the Consumer Financial Protection Bureau that it was being referred to the Department of Justice for alleged fair lending violations. Read on for more details.
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Bureau bulletin details areas of concern in PMI cancellation process
Posted Date: Tuesday, August 11, 2015
The Consumer Financial Protection Bureau issued a compliance bulletin to assist residential mortgage servicers and sub-servicers in following the private mortgage insurance cancellation and termination provisions of the Homeowners Protection Act of 1998. The bureau detailed areas where servicers failed to follow procedures in determining the timing of cancellation, and reminded servicers that HPA guidelines and protections take precedence over investor guidelines, even those issued by Fannie Mae and Freddie Mac.
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OIG: CFPB’s renovation costs reasonable
Posted Date: Tuesday, August 11, 2015
The costs for renovating the Consumer Financial Protection Bureau building has been a highly contested topic within both houses of Congress. The Office of Inspector General issued a report evaluating the reasonableness of the estimated costs and assessing the effectiveness of the bureau’s processes and controls for approving, managing and documenting renovation costs and project decisions.
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Antonakes joins Eastern Bank, OCC names first chief risk officer
Posted Date: Tuesday, August 11, 2015
The new position of Steven Antonakes, the Consumer Financial Protection Bureau’s former deputy director, has been announced. The former regulator will be joining Eastern Bank, a $9.6 billion bank, where he will serve as a senior vice president and chief compliance officer. Meanwhile, the Office of the Comptroller of the Currency has announced an addition of its own, creating the position of chief risk officer. Read on for more details.
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CFTC orders Morgan Stanley to pay $300,000 penalty
Posted Date: Tuesday, August 11, 2015
The Commodity Futures Trading Commission issued an order requiring Morgan Stanley & Co, LLC to pay a $300,000 civil monetary penalty for failing to hold sufficient U.S. dollars in segregated accounts in the United States to meet all of its U.S. dollar obligations to cleared swaps customers. The commission also found that the bank also failed to diligently supervise its personnel to ensure compliance. Read on for more details.
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Attorneys discuss regulatory touchpoints, compliance risk with lead generation
Posted Date: Friday, August 7, 2015
With Wells Fargo and Prospect Mortgage announcing their exits from marketing services agreements due to regulatory uncertainty, it’s no wonder lead generation and agreements have become such a talked-about issue. At October Research, LLC’s National Settlement Services Summit, attorneys Loretta Salzano and Francis Riley, III discussed how to legally generate leads as well as other compliance risks that lenders and settlement service agents should keep in mind.
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SEC finalizes rules requiring CEOs to disclose pay ratio
Posted Date: Friday, August 7, 2015
The Securities and Exchange Commission has issued its final rule that will require the CEOs of public companies to disclose the ratio of the compensation between them and the median compensation of their employees. The rule, mandated by Section 953(b) of the Dodd-Frank Act, does provide flexibility for calculating the pay ratio. Read on to learn more.
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CFPB to address financial concerns of seniors, caregivers
Posted Date: Tuesday, August 4, 2015
The Consumer Financial Protection Bureau will be hosting a field hearing Aug. 17 in Springfield, Va. The hearing, which will feature Director Richard Cordray and Virginia Attorney General Mark Herring, will focus on financial management for seniors and their caregivers. In recent months the bureau has been paying particular attention to reverse mortgages and advertisements for reverse mortgages.
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Texas bankers file FOIA over CFPB overdraft request
Posted Date: Tuesday, August 4, 2015
Saying it was “concerned about the breadth of this data sweep” the Texas Bankers Association filed a Freedom of Information Act request to the Consumer Financial Protection Bureau (CFPB), asking for the documents requested by the CFPB from bank software processors. The information concerned overdraft activity of bank customers. Read on to find out what the association hopes to gain from the request.
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Inability to substantiate savings leads to UDAAP violation
Posted Date: Tuesday, August 4, 2015
The Consumer Financial Protection Bureau issued two consent orders against a payment processor and a mortgage servicer for issuing advertisements, whose benefits were found to be unsubstantiated, regarding the interest savings consumers could make by enrolling in an accelerated payment program. Claims that consumers could save up to $33,000 in interest payments led to a finding of deception by the bureau under the prohibition of “unfair, deceptive or abusive acts or practices.”
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House committee passes TRID hold harmless, other CFPB changes
Posted Date: Tuesday, August 4, 2015
The House Financial Services Committee passed four bills that would amend the Consumer Financial Protection Bureau’s authorities under the TILA-RESPA Integrated Disclosure Rule, indirect auto finance, the qualified mortgage rule as well, as impose different examination requirements. Most notable among the passed provisions is a hold-harmless period for good-faith actors under TRID.
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Student lenders face UDAAP enforcements
Posted Date: Friday, July 31, 2015
Two student lenders have received enforcement actions for violations under the Dodd-Frank Act’s prohibition against unfair, deceptive or abusive acts or practices. The Consumer Financial Protection Bureau has issued monetary penalties ranging from $16 million to $1. Yes, $1. Read on to find out what the bureau regarded to be unfair and deceptive.
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Fed releases statement on federal fund rates
Posted Date: Friday, July 31, 2015
The Federal Open Market Committee reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate, according to a statement released by the Federal Reserve Board. The committee also indicated that economic activity has been expanding moderately in recent months, growth in household spending has been moderate and the housing sector has shown additional improvement; however, business fixed investment and net exports stayed soft.
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GAO releases report highlighting need for mortgage rule reviews
Posted Date: Friday, July 31, 2015
The Government Accountability Office recommended that the Consumer Financial Protection Bureau, the U.S. Department of Housing and Urban Development and the other agencies responsible for the mortgage reform provisions within the Dodd-Frank Act complete plans to review the effects of those regulations. The agencies have begun their plans but have not yet completed them. Read on to find out what research and studies have shown about the potential effects of the qualified mortgage rules.
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