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Top Story Lending Related

10/28/2020

Washington Federal Bank hit with HMDA penalty

The CFPB has announced it has settled with Washington Federal Bank, N.A., a federally insured national bank, and issued a consent order to address the Bureau’s finding that the bank reported inaccurate Home Mortgage Disclosure Act (HMDA) data about its mortgage transactions for 2016 and 2017. The settlement requires Washington Federal to pay a $200,000 civil money penalty and develop and implement an effective compliance-management system to prevent future violations.

The bank was previously issued a consent order in 2013 for HMDA filing violations. For additional information and a link to the consent order, see "Washington Federal Bank, NA pays HMDA penalty" in BankersOnline's penalty pages.

10/28/2020

Interest Rate Risk Statistics report

The OCC has issued Bulletin 2020-91 to announce the publication of the first semiannual "Interest Rate Risk Statistics Report." The report presents interest rate risk data gathered during examinations of OCC-supervised midsize and community financial institutions. The statistics are for informational purposes only and do not represent OCC-suggested limits or exposures. The report provides statistics on interest rate risk exposures and risk limits for different midsize and community bank populations, including:

  • all OCC-supervised midsize and community banks with reported data
  • banks by asset size
  • banks by charter type
  • minority depository institutions

10/28/2020

OCC finalizes True Lender Rule

The OCC has issued a final rule that determines when a national bank or federal savings association (collectively, banks) makes a loan and is the “true lender,” including in the context of a partnership between a bank and a third party. The rule specifies that a bank makes a loan and is the true lender if, as of the date of origination, it (1) is named as the lender in the loan agreement or (2) funds the loan. The rule also specifies that if, as of the date of origination, one bank is named as the lender in the loan agreement for a loan and another bank funds that loan, the bank that is named as the lender in the loan agreement makes the loan. The rule also clarifies that as the true lender of a loan, the bank retains the compliance obligations associated with the origination of that loan, thus negating concern regarding harmful rent-a-charter arrangements.

The OCC specifies in the prefatory text to the final rule in the Federal Register filing that the bank would not be considered the true lender in certain traditional lending or finance arrangements such as mortgage warehouse lending, indirect automobile finance, loan syndication and other structured finance. The OCC also clarified that the rule “does not affect the applicability” of the Home Mortgage Disclosure Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act or their implementing regulations. The final rule will take effect 60 days after publication in the Federal Register.

10/28/2020

FHFA House Price Index up

The FHFA has released its latest FHFA House Price Index. House prices rose nationwide in August, up 1.5 percent from the previous month. Prices rose 8.0 percent from August 2019 to August 2020. FHFA also revised its previously reported 1.0 percent price change for July 2020 to 1.1 percent. For the nine census divisions, seasonally adjusted monthly house price changes from July 2020 to August 2020 ranged from +0.9 percent in the East South Central division to +1.9 percent in the West South Central division. The 12-month changes ranged from +7.2 percent in the West North Central division to +9.7 percent in the Mountain division.

10/28/2020

FHFA finalizes strategic plan for FY 2021-2024

The Federal Housing Finance Agency has announced its adoption of the FHFA Strategic Plan: Fiscal Years 2021-2024. The Strategic Plan establishes new goals needed for FHFA to fulfill its statutory duties, which include responsibly ending the conservatorships of Fannie Mae and Freddie Mac (the Enterprises). The FHFA said it carefully reviewed all comments submitted on the Plan. The agency fulfilled one of the most common comment requests on October 19, when it released a proposed rule on new Enterprise products and activities.

The Strategic Plan formalizes the new direction of the agency and its regulated entities by updating the agency’s mission, vision, and values, and by establishing three new strategic goals:

  1. Ensuring safe and sound regulated entities through world-class supervision;
  2. Fostering competitive, liquid, efficient, and resilient (CLEAR) national housing finance markets; and
  3. Positioning the agency as a model of operational excellence by strengthening its workforce and infrastructure.

10/28/2020

NMLS Policy Guidebook updated

An updated version of the NMLS Policy Guidebook has been posted on the NMLS Resource Center and the Regulator Resource Center.

The updates include a provision that individuals (including mortgage loan originators) working under executive order, state guidance, laws, regulations or any other pronouncement with the effect of law, need not change their work location in their Registry record.

10/28/2020

9th mortgage company settles with CFPB over deceptive ads

The CFPB has issued a consent order against Low VA Rates LLC, a Utah-based mortgage lender and broker incorporated in Colorado and licensed in 48 states and the District of Columbia. The order addresses the Bureau’s finding that Low VA Rates sent consumers mailers for mortgage loans guaranteed by the U.S. Department of Veterans Affairs (VA) that contained false, misleading, and inaccurate statements, which violated the Consumer Financial Protection Act’s (CFPA) prohibition against deceptive acts and practices, the Mortgage Acts and Practices – Advertising Rule (MAP Rule, Regulation N), and Regulation Z. The order requires Low VA Rates to pay a civil money penalty of $1,800,000 to the Bureau and imposes requirements to prevent future violations.

This CFPB action is the ninth and last case stemming from a Bureau sweep of investigations of multiple mortgage companies that used deceptive mailers to advertise VA-guaranteed mortgages. The Bureau began the sweep in response to concerns raised by the VA about potentially unlawful advertising in the mortgage lending market. The Bureau has obtained more than $4.4 million in civil money penalties as a result of this sweep.

To prevent future violations, the consent order requires Low VA Rates to designate an advertising compliance official who must review its mortgage advertisements for compliance with mortgage advertising laws prior to use. Low VA Rates must also refrain from making misrepresentations like those identified by the Bureau through its investigation, and comply with certain enhanced disclosure requirements.

For additional information, see "Low VA Rates LLC settles with Bureau over deceptive VA loan ads," in BankersOnline's Penalty Pages.

10/27/2020

HUD awards $10M in sweat equity grants

HUD has announced the award of $10 million in "sweat equity" grants to four non-profit self-help housing organizations which will create at least 536 affordable homes for hard-working, low-income families and individuals. The organizations receiving the grants are:

  • Habitat for Humanity International, Inc. - $5,341,907
  • Tierra Del Housing Corporation - $2,043,781
  • Community Frameworks - $1,320,232
  • Housing Assistance Council - $1,294,080

10/27/2020

Revised pamphlet for Comptroller's Handbook

The OCC has posted Bulletin 2020-90 to announce the revision of the “Concentrations of Credit” booklet of the Comptroller’s Handbook, which is used by OCC examiners in their examination and supervision of national banks, federal savings associations, and federal branches and agencies of foreign banking organizations. The revised booklet—

  • changes the supervisory calculation for credit concentration ratios for banks that have implemented the current expected credit loss (CECL) transition rule to avoid double counting the allowance for credit losses in the denominator
  • replaces the term “criticized” with “special mention” for consistency with Banking Bulletin (BB) 1993-35, “Interagency Definition of Special Mention Assets”
  • reflects relevant OCC issuances published since this booklet was last issued
  • reflects changes to laws and regulations that occurred since this booklet was last issued
  • clarifies applicability of references to covered savings associations
  • includes clarifying edits regarding supervisory guidance, sound risk management practices, or legal language
  • revises certain content for general clarity
  • removes the NAICS code listing, as this information is readily available at www.census.gov

10/22/2020

October 2020 Beige Book

The Federal Reserve Board has released the October 21, 2020 issue of the Beige Book.

Economic activity continued to increase across all Districts, with the pace of growth characterized as slight to modest in most Districts. Changes in activity varied greatly by sector. Manufacturing activity generally increased at a moderate pace. Residential housing markets continued to experience steady demand for new and existing homes, with activity constrained by low inventories. Banking contacts also cited increased demand for mortgages as the key driver of overall loan demand. Conversely, commercial real estate conditions continued to deteriorate in many Districts, with the exception being warehouse and industrial space where construction and leasing activity remained steady. Consumer spending growth remained positive, but some Districts reported a leveling off of retail sales and a slight uptick in tourism activity. Demand for autos remained steady, but low inventories have constrained sales to varying degrees. Reports on agriculture conditions were mixed, as some Districts are experiencing drought conditions. Districts characterized the outlooks of contacts as generally optimistic or positive, but with a considerable degree of uncertainty. Restaurateurs in many Districts expressed concern that cooler weather would slow sales, as they have relied on outdoor dining. Banking contacts in many Districts expressed concern that delinquency rates may rise in coming months, citing various reasons; however, delinquency rates have remained stable.

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