Top Story Lending Related

The Consumer Financial Protection Bureau announced yesterday that it has taken two separate actions against Citibank for illegal debt sales and debt collection practices. In the first action, the CFPB ordered Citibank to provide nearly $5 million in consumer relief and pay a $3 million penalty for selling credit card debt with inflated interest rates and for failing to forward consumer payments promptly to debt buyers. The second action is against both Citibank and two New Jersey debt collection law firms it used that falsified court documents filed in debt collection cases in that state's courts. The CFPB ordered Citibank and the law firms to comply with a court order that Citibank refund $11 million to consumers and forgo collecting about $34 million from about 7,000 consumers. For details, see our February 23, 2016 Penalty Page entry.

The OCC will host two workshops in Santa Ana at the DoubleTree Santa Ana-Orange County Airport on March 22-23, for directors of national community banks and federal savings associations supervised by the OCC. The Credit Risk workshop on March 22 focuses on credit risk within the loan portfolio, such as identifying trends and recognizing problems. The workshop also covers the roles of the board and management, how to stay informed of changes in credit risk, and how to effect change. The Compliance Risk workshop on March 23 combines lectures, discussion, and exercises on the critical elements of an effective compliance risk management program. The workshop also focuses on major compliance risks and critical regulations. Topics of discussion include the Bank Secrecy Act, Community Reinvestment Act, and the Truth-in-Lending (TILA) and the Real Estate Settlement Procedures Act of 1974 (RESPA) Integrated Disclosures Rule, also known as TRID.

HUD has announced it is making $40 million in grants available to support hundreds of housing counseling organizations across the country that assist families, including those buying their first home, struggling to locate affordable rental housing or seeking to avoid foreclosure. The funding is offered to directly support the housing counseling services provided by national and regional organizations, multi-state organizations, State Housing Finance Agencies (SHFAs) and more than 200 local housing counseling agencies that assist low- and moderate-income families improve their housing conditions. Grant winners use the money to help homebuyers evaluate if they are ready to buy a house, understand their financing and down payment options, and navigate what can be an extremely confusing and difficult process. Grantees also help families find affordable rental housing and offer financial literacy training to help struggling families repair credit problems.

Treasury has announced it will exercise its authority to obligate up to $2 billion in additional Troubled Asset Relief Program (TARP) funds to the Hardest Hit Fund (HHF) program. The additional investment in HHF will enable participating state Housing Finance Agencies (HFAs) to continue assisting struggling homeowners and stabilizing neighborhoods in many of the nation’s hardest hit communities. The fifth round of HHF funding will be allocated among participating HFAs in two phases of $1 billion each. States receiving additional funds will have until December 31, 2020, to utilize their HHF funds, an extension from the current program end date of December 31, 2017.

In prepared remarks at the Bipartisan Policy Center, FHFA Director Watt discussed the agency’s management of Fannie Mae and Freddie Mac in conservatorship. He reviewed the FHFA’s role as regulator and conservator, the challenges and risks of a protracted conservatorship including the role of market discipline and planning for the uncertain future role of Fannie and Freddie in housing finance.

The February 18, 2016 charge-off and delinquency rates on loans and leases at commercial banks report has been released by the Federal Reserve.

The OCC will host two workshops in Atlanta at the DoubleTree by Hilton Atlanta Downtown, March 15-16, for directors of national community banks and federal savings associations supervised by the OCC. The Risk Governance workshop on March 15 combines lectures, discussion, and exercises to provide practical information for directors to effectively measure and manage risks. The workshop also focuses on the OCC’s approach to risk-based supervision and major risks in the financial industry. The Compliance Risk workshop on March 16 combines lectures, discussion, and exercises on the critical elements of an effective compliance risk management program. The workshop also focuses on major compliance risks and critical regulations. Topics of discussion include the Bank Secrecy Act, Community Reinvestment Act, and the Truth-in-Lending (TILA) and the Real Estate Settlement Procedures Act of 1974 (RESPA) Integrated Disclosures Rule, also known as TRID.

The National Credit Union Administration's Board of Directors has approved a final rule giving federally insured credit unions greater flexibility and autonomy to offer member-business loans. The significant changes made by the rule include:

• Giving credit union loan officers the ability, under certain circumstances, to not require a personal guarantee;
• Replacing explicit loan-to-value limits with the principle of appropriate collateral and eliminating the need for a waiver;
• Lifting limits on construction and development loans;
• Exempting credit unions with assets under $250 million and small commercial loan portfolios from certain requirements; and
• Affirming that non-member loan participations do not count against the statutory member-business lending cap.

Most of the changes to be made by the final rule will become effective January 1, 2017. The removal of the personal guarantee requirement will become effective 60 days after publication of the final rule.

Update: Published 3/14/2016 [81 FR 13529], eff. 1/1/2017, except for the transitional provision relating to the requirement for personal guarantees, which is effective 5/13/2016.

HUD and the Census Bureau have released the new residential construction statistics for January 2016. Privately owned housing units authorized by building permits in January were at a seasonally adjusted annual rate of 1,202,000, 0.2 percent below the revised December rate of 1,204,000. Single-family authorizations in January were at a rate of 720,000, 1.6 percent below the revised December figure of 732,000. Privately owned housing starts in January were at a seasonally adjusted annual rate of 1,099,000, 3.8 percent below the revised December estimate of 1,143,000. Single-family housing starts in January were at a rate of 731,000, 3.9 percent below the revised December figure of 761,000. Privately owned housing completions in January were at a seasonally adjusted annual rate of 1,057,000, 2.0 percent above the revised December estimate of 1,036,000. Single-family housing completions in January were at a rate of 693,000, is 1.4 percent below the revised December rate of 703,000.

HUD Secretary Castro has launched the “Prosperity Playbook” community tour in Kansas City, MO. The “Prosperity Playbook” will be a compilation of online resources written for and by state and local decision makers. The online toolkit will inform community planning and help local leaders think regionally about how to expand affordable housing opportunity and forge greater economic mobility in communities across the nation. The tour will continue with stops in Denver, San Francisco, Atlanta, and Minneapolis.