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Top Story Lending Related

03/22/2023

CFPB updates credit card issuer survey

The CFPB has announced the launch of an improved survey of credit card issuers that can help consumers and families compare interest rates and other features when shopping for a new credit card. Upgrades to the CFPB’s terms of credit card plans (TCCP) survey are designed to increase price competition in the credit card market by allowing people to comparison shop for the best prices and products. The survey will also help smaller credit card issuers, who often offer the lowest rates, reach comparison shoppers.

The improvements to the CFPB’s semiannual terms of credit card plans survey are intended to create a neutral data source to help consumers find the best interest rates and products. Currently, consumers can run into many obstacles when shopping for credit cards, including that many big issuers make it difficult for consumers to estimate the interest rate they will pay. The data from the survey also can power digital tools and websites that people can use to find the best products for them, regardless of company size or marketing budget.

For the terms of credit card plans survey, the CFPB collects and makes public the product data on credit cards from the largest 25 issuers and from a sample of at least 125 additional issuers. The goal of the refreshed survey is to provide people with more realistic and practical information to use when comparison shopping for a credit card. The survey will also expand the number of issuers included. Specifically, financial institutions that are not part of the top 25 nor are part of the 125 sampled issuers will be able to voluntarily submit information about their credit card products.

03/21/2023

Bureau posts HMDA data for 2022

HMDA Modified Loan Application Register (LAR) data for 2022 are now available on the FFIEC HMDA Platform for approximately 4,394 HMDA filers. The published data contain loan-level information filed by financial institutions and modified to protect consumer privacy.

To increase public accessibility, the annual loan-level LAR data for each HMDA filer are now available online. Previously, users could obtain LAR data only by making requests to specific institutions for their annual data. To allow for easier public access to all LAR data, the Consumer Financial Protection Bureau’s (CFPB) 2015 HMDA rule made the data for each HMDA filer available electronically on the FFIEC’s HMDA Platform. This year, in addition to institution-specific modified LAR files, users can download one combined file that contains all institutions’ modified LAR data.

Later this year, the 2022 HMDA data will be available in other forms to provide users insights into the data. These forms will include a nationwide loan-level dataset with all publicly available data for all HMDA reporters; aggregate and disclosure reports with summary information by geography and lender; and access to the 2022 data through the HMDA Data Browser to allow users to create custom datasets, reports, and data maps. The CFPB will later also publish a Data Point article highlighting key trends in the annual data.

03/20/2023

HUD restores 'Discriminatory Effects' Rule

The U.S. Department of Housing and Urban Development (HUD) announced on Friday that it has submitted to the Federal Register for publication a final rule entitled Restoring HUD's Discriminatory Effects Standard. The rule rescinds the Department's 2020 rule governing Fair Housing Act disparate impact claims and restores the 2013 Discriminatory Effects rule. In the final rule, HUD emphasizes that the 2013 rule is more consistent with how the Fair Housing Act has been applied in the courts and in front of the agency for more than 50 years, and that it more effectively implements the Act's broad remedial purpose of eliminating unnecessary discriminatory practices from the housing market.

The Fair Housing Act prohibits discrimination in housing and housing-related services because of race, color, religion, national origin, sex (including sexual orientation and gender identity), familial status, and disability. The discriminatory effects doctrine (which includes disparate impact and perpetuation of segregation) is a tool for addressing policies that unnecessarily cause systemic inequality in housing, regardless of whether they were adopted with discriminatory intent. It has long been used to challenge policies that unnecessarily exclude people from housing opportunities, including zoning requirements, lending and property insurance policies, and criminal records policies. Accordingly, having a workable discriminatory effects standard is vital for the Biden-Harris Administration to accomplish its goal of creating a housing market that is free from both intentional discrimination and policies and practices that have unjustified discriminatory effects.

HUD's 2013 discriminatory effects rule codified long-standing case law for adjudication of Fair Housing Act cases under the discriminatory effects doctrine, for cases filed administratively with HUD and for federal court actions brought by private plaintiffs. Under the 2013 rule, the discriminatory effects framework was straightforward: a policy that had a discriminatory effect on a protected class was unlawful if it was not necessary to achieve a substantial, legitimate, nondiscriminatory interest or if a less discriminatory alternative could also serve that interest.

The 2020 rule complicated that analysis by adding new pleading requirements, new proof requirements, and new defenses, all of which made it more difficult to establish that a policy violates the Fair Housing Act and harder for entities regulated by the Fair Housing Act to assess whether their policies were lawful. HUD now returns to the 2013 rule’s analysis.

This final rule will go into effect 30 days after it is published in the Federal Register.

03/20/2023

CFPB updates contact info in regulations

The CFPB published in today's Federal Register a final rule to make non-substantive corrections and updates to Bureau and other Federal agency contact information found at certain locations in Regulations B, E, F, J, V, X, Z, and DD, including Federal agency contact information that must be provided with Equal Credit Opportunity Act adverse action notices and the Fair Credit Reporting Act Summary of Consumer Rights.

This final rule also revises the chapter heading, makes various non-substantive changes to Regulations B and V, and provides a Bureau website address where the public may access certain APR tables referenced in Regulation Z.

The rule is effective April 19, 2023. However, the mandatory compliance date for the amendments to appendix A to Regulation B, appendix A to Regulation J, and appendix K to Regulation V is March 20, 2024.

03/17/2023

CFPB warning regarding unfair collection of student loans

The CFPB has released a bulletin warning servicers of their obligation to halt unlawful conduct with respect to private student loans that have been discharged by bankruptcy courts. The bulletin details recent findings by CFPB examiners that certain loan servicers were illegally returning loans to collections after bankruptcy courts had discharged the loans. The CFPB is directing these servicers to return illegally collected payments to affected consumers and immediately cease these unlawful collection tactics. The bulletin also makes clear that the CFPB will continue to examine student loan servicers’ handling of these loans to detect whether these illegal practices persist at other companies.

  • Bulletin 2023-01, "Unfair Billing and Collection Practices After Bankruptcy Discharges of Certain Student Loan Debts"

03/17/2023

NCUA Board approves subordinated debt rule

The National Credit Union Administrative Board yesterday announced it has approved a final rule on subordinated debt. The final rule makes two changes to the current subordinated debt rule that was finalized in 2020. Specifically, this final rule replaces the maximum permissible maturity of subordinated debt notes with a requirement that any credit union seeking to issue subordinated debt notes with maturities longer than 20 years demonstrate how such instruments would continue to be considered “debt.”

The rule also extends the regulatory capital treatment of grandfathered secondary capital to the later of 30 years from the date of issuance or January 1, 2052. This extension will align the treatment of grandfathered secondary capital with the maximum permissible maturity for any secondary capital issued by low-income credit unions under the U.S. Department of the Treasury’s Emergency Capital Investment Program or other programs administrated by the U.S. government.

The rule will be effective 30 days after publication in the Federal Register.

03/16/2023

HUD overhauls disaster recovery program

On Wednesday, HUD announced an overhaul of the agency’s disaster recovery efforts to better serve communities who face the direct impacts of weather-related disasters. Based on the increasing number of disasters and the increasingly important role that HUD is playing in federal government’s preparedness, response, and recovery efforts, the Department is announcing the establishment of the Office of Disaster Management (ODM) in the Office of the Deputy Secretary, and the Office of Disaster Recovery (ODR) within the Office of Community Planning and Development, the addition of dozens of new HUD staff members to help expedite recovery processes, and the allocation of more than $3.3 billion in Community Development Block Grant-Disaster Recovery (CDBG-DR) funds.

The changes are designed to streamline the agency’s disaster recovery and resilience work by increasing coordination, reducing bureaucracy, and increasing capacity to get recovery funding to communities more quickly by facilitating collaborative, transparent disaster recovery planning with communities earlier in the process.

03/16/2023

FHFA delays start of upfront DTI ratio fee

The Federal Housing Finance Agency on Wednesday announced it has delayed until August 1, 2023, the effective date of the debt-to-income (DTI) ratio fee announced in January, to ensure a level playing field for all lenders to have sufficient time to deploy the fee. In addition, lenders will not be subject to post-purchase price adjustments related to this DTI ratio-based fee for loans acquired by the Enterprises (Fannie Mae and Freddie Mac) between August 1, 2023, and December 31, 2023.

Since the January announcement, FHFA has received feedback from mortgage industry stakeholders about the operational challenges of implementing the DTI ratio-based fee, which will apply to certain borrowers with a DTI ratio above 40 percent.

03/16/2023

Tolstedt fined $17M and barred from industry

The Office of the Comptroller of the Currency on Wednesday announced it has issued a prohibition order and a $17 million civil money penalty by consent against Carrie Tolstedt, former head of Wells Fargo Bank, N.A.'s Community Bank, for her role in systemic sales practices misconduct at the bank.

The settlement resolves the administrative enforcement action against Ms. Tolstedt that began when the OCC filed a notice of charges against her on January 23, 2020. The notice alleged that Ms. Tolstedt was significantly responsible for the systemic sales practices misconduct at the bank. The Notice further alleged that the bank’s business model imposed unreasonable sales goals on its employees, along with unreasonable pressure to meet such goals.

The settlement the OCC announced today is in addition to the settlements with seven other former Wells Fargo senior bank executives announced on January 23 and September 21, 2020, and January 15, 2021.

It appears that settlements have not yet been reached with former Community Bank Group risk officer Claudia Russ Anderson, former executive audit director Paul McLinko, and former chief auditor David Julian.

03/16/2023

CFPB inquiry into business practices of data brokers

On Wednesday, the CFPB announced an inquiry into companies that track and collect information on people’s personal lives. In issuing this new Request for Information, the CFPB wants to understand the full scope and breadth of data brokers and their business practices, their impact on the daily lives of consumers, and whether they are all playing by the same rules. This feedback will shed light on the current state of an industry that largely operates out of public view, and inform the CFPB’s future work to ensure that these companies comply with federal law.

The Fair Credit Reporting Act ("FCRA") provides a range of protections, including accuracy standards, dispute rights, and restrictions on how data can be used. The law covers data brokers like credit reporting companies and background screening firms, as well as those who report information to these firms.

The inquiry seeks information about business practices employed in the market today to inform the CFPB’s efforts to administer the law, including planned rulemaking under the FCRA. The CFPB is interested in hearing about the business models and practices of the data broker market, including details about the types of data the brokers collect and sell and the sources they rely upon. The feedback received will help the CFPB gain a better understanding about the current state of business practices in this area. The CFPB is also interested in hearing about people’s direct experiences with these companies, including when individuals attempt to remove, correct, or regain control of their data.

The public will have until June 13, 2023, to submit their comments. Publication update: Published on 3/21/2023 at 88 FR 16951.

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