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Bureau Blog articles

The CFPB has posted two articles on its Blog: one announcing easy-to-remember guidelines to help people reduce credit card debt and the other on understanding the overdraft “opt-in” choice.


SBA programs to be discussed at NCUA webinar

The NCUA has announced a 90-minute webinar, "SBA Opportunities for Credit Unions," scheduled for 2 p.m. ET on February 15. The webinar will provide an update on the new SBA One automated lending platform and will discuss SBA’s Microenterprise Loan Program for credit unions making loans smaller than $50,000. The webinar will also provide an update on NCUA’s member-business lending rule.


Yellen on economic outlook and monetary policy

In a presentation at he Stanford Institute for Economic Policy Research, Federal Reserve Board Chair Yellen reviewed the economic outlook and the conduct of monetary policy. She discussed the progress to date, maintaining sustainable growth in a context of price stability, and evaluating the appropriate stance of monetary policy. In her concluding remarks, Yellen said, "it is important to emphasize the considerable uncertainty that attaches to such assessments and the need to constantly update them. In particular, the path of the neutral federal funds rate, which plays an important role in determining the appropriate policy path, is highly uncertain. For example, productivity growth is a key determinant of the neutral rate, and while most forecasters expect productivity growth to pick up from its recent unusually slow pace, the timing of such a pickup is highly uncertain. Indeed, there is little consensus among researchers about the causes of the recent slowdown in productivity growth that has occurred both at home and abroad. The strength of global growth will also have an important bearing on the neutral rate through both trade and financial channels, and here, too, the scope for surprises is considerable. Finally, I would mention the potential for changes in fiscal policy to affect the economic outlook and the appropriate policy path. At this point, however, the size, timing, and composition of such changes remain uncertain. However, as this discussion highlights, the course of monetary policy over the next few years will depend on many different factors, of which fiscal policy is just one."


December residential construction activity mixed

HUD and the Census Bureau have announced the residential construction statistics for December 2016.

  • BUILDING PERMITS—Privately owned housing units authorized by building permits in December were at a seasonally adjusted annual rate of 1,210,000, 0.2 percent below the revised November rate, but 0.7 percent above the December 2015 estimate of 1,201,000. Single-family authorizations in December were at a rate of 817,000, 4.7 percent above the revised November figure. Authorizations of units in buildings with five units or more were at a rate of 355,000 in December. An estimated 1,186,900 housing units were authorized by building permits in 2016. This is 0.4 percent above the 2015 figure of 1,182,600.
  • HOUSING STARTS—Privately owned housing starts in December were at a seasonally adjusted annual rate of 1,226,000, 11.3 percent above the revised November rate and 5.7 percent above the December 2015 rate. Single-family housing starts in December were at a rate of 795,000, 4.0 percent below the revised November figure. The December rate for units in buildings with five units or more was 417,000. An estimated 1,166,400 housing units were started in 2016. This is 4.9 percent above the 2015 figure.
  • HOUSING COMPLETIONS—Privately owned housing completions in December were at a seasonally adjusted annual rate of 1,123,000, 7.9 percent below the revised November rate of 1,219,000, but 8.7 percent above the December 2015 rate. Single-family housing completions in December were at a rate of 761,000, 0.9 percent below the revised November rate. The December rate for units in buildings with five units or more was 355,000. An estimated 1,062,300 housing units were completed in 2016. This is 9.7 percent above the 2015 figure.


Board amends Regulations A and D

The Federal Reserve Board has published two final rules in the January 23, 2017, Federal Register.

  • Amendments to Regulation A (12 CFR Part 201), at 82 FR 7635, to reflect the Board's approval of an increase in the rate for primary credit at each Federal Reserve Bank. The secondary credit rate at each Reserve Bank automatically increased by formula as a result of the Board's primary credit rate action.
  • Amendments to Regulation D (12 CFR Part 204), at 82 FR 7636, to revise the rate of interest paid on balances maintained to satisfy reserve balance requirements (“IORR”) and the rate of interest paid on excess balances (“IOER”) maintained at Federal Reserve Banks by or on behalf of eligible institutions. The final amendments specify that IORR is 0.75 percent and IOER is 0.75 percent, a 0.25 percentage point increase from their prior levels.

These amendments take effect on January 23, 2017.


FEMA announces suspensions of Missouri communities

The Federal Emergency Management Agency has published, at 82 FR 7697 in the Monday, January 23, 2017, Federal Register, a final rule identifying communities in Jackson County, Missouri, that are scheduled for suspension from the National Flood Insurance Program as of today, January 20, 2017, for noncompliance with the floodplain management requirements of the program.


FHA amends reverse mortgage program rules

The Federal Housing Administration has published in today's Federal Register a final rule making several changes to FHA's Home Equity Conversion Mortgage (HECM) program. The HECM program is FHA’s reverse mortgage program that enables seniors who have equity in their homes to withdraw a portion of the accumulated equity. The intent of the Home Equity Conversion Mortgage program is to ease the financial burden on elderly homeowners facing increased health, housing, and subsistence costs at a time of reduced income. The changes are effective September 19, 2017. They affect rules at 24 CFR Parts 30 and 206.


CFPB sues largest student loan servicer

The Consumer Financial Protection Bureau announced yesterday that it has sued Navient Corporation and its subsidiaries, alleging that Navient has failed to provide the most basic functions of adequate student loan servicing at every stage of repayment for both private and federal loans. The Bureau stated that Navient provided bad information in writing and over the phone, processed payments incorrectly, and failed to act when borrowers complained about problems, and that Navient's actions systematically made it harder for borrowers to obtain the important right to pay according to what they can afford. These illegal practices made paying back student loans more difficult and costly for certain borrowers, according to the Bureau's press release.

Formerly part of Sallie Mae, Inc., Navient is the largest student loan servicer in the United States. It services the loans of more than 12 million borrowers, including more than 6 million accounts under its contract with the Department of Education. Altogether, it services more than $300 billion in federal and private student loans. Named in today’s lawsuit are Navient Corporation and two of its subsidiaries: Navient Solutions is a division responsible for loan servicing operations; Pioneer Credit Recovery specializes in the collection of defaulted student loans.

The suit alleges that Naviant:

  • fails to correctly apply or allocate borrower payments to their accounts
  • steers struggling borrowers toward paying more than they have to on loans
  • obscured information consumers needed to maintain their lower payments
  • deceived dprivate student loan borrowers about requirements to release their cosigners from a loan
  • harmed the credit of disabled borrowers, including severely injured veterans
  • made illegal misrepresentations concerning the federal loan rehabilitation program available to defaulted borrowers

The suit alleges violations of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Fair Credit Reporting Act, and the Fair Debt Collections Practices Act. The suit seeks redress for consumers harmed by Navient’s illegal practices. The CFPB is also seeking to keep Navient from continuing the illegal conduct described in the complaint, and to prevent new borrowers from being harmed.


January Beige Book

The Federal Reserve has posted the January 2017 issue of the Beige Book. The full report and a national summary are available.


Fed Board adjusts maximum CMPs

The Federal Reserve Board has announced that it has finalized a rule adjusting the Board's maximum civil money penalties, as required by law. In November 2015, a law was passed that requires all federal agencies to adjust their maximum civil money penalty limits annually for inflation, rather than every four years as previously required. The maximum civil money penalty limits depend on several factors, including the severity and type of violation. Additionally, the law dictates the annual adjustment formula for federal agencies. The new penalty amounts apply as of January 15, 2017.


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UDAAP Reality Check

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Stop That Payment!

Bankers must understand the differences between the use of their systems' stop payment functionality and the actual right to stop payment

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