Top Story Lending Related

The Federal Reserve Board has issued the Federal Open Market Committee statement and the economic projections from the March 14-15, 2017, FOMC meeting. The Committee decided to raise the target range for the federal funds rate to 3/4 to 1 percent

NMLS Federal Registry Sources has announced that the NMLS and Consumer Access will be unavailable, due to system maintenance, from 9:00 p.m. March 17 to 10:00 a.m. March 18. The maintenance is in preparation for making Release 2017.1 available Monday morning.

The Consumer Financial Protection Bureau announced Wednesday that it has ordered Nationstar Mortgage LLC, of Coppell, Texas, to pay a $1.75 million civil penalty for violating the Home Mortgage Disclosure Act (HMDA) by consistently failing to report accurate data about mortgage transactions for 2012 through 2014, and to take the necessary steps to improve its compliance management and prevent future violations. According to 2014 data, Nationstar was the ninth-largest HMDA reporter by total mortgage originations, the sixth largest by applications received, and the 13th largest by money lent. From 2010 to 2014, Nationstar’s number of HMDA mortgage loans increased by nearly 900 percent.

The Bureau reported that, in its supervision process, it found that Nationstar’s HMDA compliance systems were flawed, and generated mortgage lending data with significant, preventable errors. Nationstar also failed to maintain detailed HMDA data collection and validation procedures, and failed to implement adequate compliance procedures. It also produced discrepancies by failing to consistently define data among its various lines of business. The Nationstar reporting samples reviewed by the CFPB showed substantial error rates in three consecutive reporting years, even after a settlement with the Massachusetts Division of Banks over faulty HMDA reporting was reached in 2011. In the samples reviewed, the CFPB found error rates of 13 percent in 2012, 33 percent in 2013, and 21 percent in 2014.

See "Nationstar Mortgage pays $1.75M HMDA penalty" in our Penalties section, for additional information.

The CFPB's previously announced proposal to delay for six months the effective date of its Prepaid Accounts rule was published in this morning's Federal Register. The 21-day comment period ends on April 5, 2017.

The Federal Emergency Management Agency has suspended several communities in the State of Washington from the National Flood Insurance Program, effective March 7, 2017, as announced in a final rule published at 82 FR 13399 in this morning's Federal Register. The communities are portions of Island, King, and Pierce Counties.

The CFPB has published a request for information from the public as part of its biennial review of the credit card market under the CARD Act.

The CFPB has announced a proposal to delay for six months the effective date of its final rule governing prepaid accounts. The Bureau indicated it has learned that some industry participants believe they will have difficulty complying with certain provisions of the rule by the current October 1, 2017, effective date. The CFPB is requesting comments about any implementation challenges that may affect consumers, and how additional time will impact industry, consumers, and other stakeholders. Comments will be due 21 days after the request is published in the Federal Register.

Update: Published at 82 FR 13782 on March 15, 2017. Comments due by April 5, 2017.

The Federal Reserve has released the Z.1 Financial accounts of the United States report, which includes data on the flow of funds and levels of financial assets and liabilities, by sector and financial instrument; full balance sheets, including net worth, for households and nonprofit organizations, nonfinancial corporate businesses, and nonfinancial noncorporate businesses; Integrated Macroeconomic Accounts; and additional supplemental detail.

The Federal Trade Commission has announced that United Debt Counselors LLC, a debt relief company, and its principals, who allegedly misled consumers and charged illegal advance fees, will be banned from those practices under a settlement with the regulator. According to a complaint filed by the Commission, the company exaggerated how much money people would save using its services. The company’s direct mail ads, which reached up to 100,000 consumers per week, looked like official documents from a bank or attorney, and claimed that typical customers would have their credit card debt cut in half and become debt-free within 36 months. Under a stipulated order, the defendants are banned from making misrepresentations about debt relief and other financial products or services, and making unsubstantiated claims about any products or services. They can charge advance fees only if they comply with the Telephone Sales Rule; sales persons making face-to-face sales presentations must have authority to discuss material terms, they must do so in specific detail, and they must be able to answer consumers’ questions. The order imposes a $9 million judgment that represents the amount of alleged harm to consumers. It will be partially suspended upon payment of $510,000. The full judgment will become due immediately if the defendants are found to have misrepresented their financial condition.

The FDIC has issued "Credit Risk Trends and Supervisory Expectation Highlights," which appears in the Winter 2016 issue of Supervisory Insights. The lead article identifies trends in credit risk and emphasizes to bankers and examiners that now is the time to heed long-standing principles of sound risk-management practices. It also examines growth on bank balance sheets and effective risk management practices related to commercial real estate, agriculture, and oil and gas-related lending.