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How to add predictive analytics into your risk program. Risk reports are often limited to historical insights and issues and do not provide guidance and insights into the future of the organization. Adding predictive analytics can allow your organization to detect emerging risks and create mitigation plans. This can be achieved by combining internal and external key risk indicators (KRIs) and key performance indicators (KPIs) with regulatory intelligence. This ensures that risk reports can detect more issues and highlight areas of concern. Click here to learn more.

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House passes SAFE Banking Act bill

The House of Representatives approved its SAFE Banking Act bill in a bipartisan vote yesterday. The bill now goes to the Senate, where its fate is uncertain. As passed by the House, the bill would allow banks to serve cannabis-related businesses in the 33 states where marijuana is legal at some level, and prohibit federal regulators from acting against a bank solely because marijuana is involved.


CFPB sues debt collection firm and subs

The CFPB announced yesterday it had filed suit against Fair Collections & Outsourcing and Michael E. Sobota, the owner and CEO of its holding company. The suit against Soboda, FCO Holding, Inc. and its subsidiaries, Fair Collections & Outsourcing, Inc., Fair Collections & Outsourcing of New England, Inc., and FCO Worldwide, Inc. alleges that FCO violated the Fair Credit Reporting Act, Regulation V and the Consumer Financial Protection Act by:

  • failing to establish or implement reasonable written policies and procedures regarding the accuracy and integrity of the information it furnished to consumer reporting companies, specifically with respect to its handling of indirect disputes;
  • failing to consider or incorporate the appropriate guidelines in developing its policies and procedures regarding the handling of indirect disputes;
  • failing to review its indirect dispute handling policies and procedures and update them as necessary to ensure their continued effectiveness;
  • failing to conduct a reasonable investigation, or any investigation, and review all relevant information in its handling of indirect disputes; and
  • furnishing information about accounts before or without conducting an investigation into the accuracy of the information it was furnishing after receiving identity theft reports from consumers disputing such accounts.

The complaint also alleges that FCO and Sobota violated the Fair Debt Collection Practices Act when FCO represented that consumers owed certain debts when, in fact, FCO did not have a reasonable basis to assert that the consumers owed those debts. The Bureau's action seeks an injunction, as well as damages, redress, disgorgement of ill-gotten gains, and the imposition of a civil money penalty.


Bureau releases new HMDA guides

The CFPB has published its Filing Instructions Guide (FIG) for data collected in 2020 and a new resource, the Supplemental Guide for Quarterly Filers. Both are available on the Bureau's HMDA Help for Filers webpage.


CFPB adds FAQs on EGRRCPA impact on SAFE Act

The CFPB has issued four FAQs pertaining to compliance with the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) as of November 24, 2019, the effective date of the 2018 amendments to the statute made by the EGRRCPA. The FAQs explain

  • the categories of loan originators (Registered and State-Licensed and Loan Originator with Temporary Authority) under the SAFE Act
  • where loan originators can exercise temporary authority
  • Bureau guidance on state transitional licenses
  • that the EGRRCPA amendments to the SAFE Act won't affect the permissibility of transitional licensing


House price index increases

U.S. house prices rose in July, up 0.4 percent from the previous month, according to the Federal Housing Finance Agency House Price Index. House prices rose 5.0 percent from July 2018 to July 2019. The previously reported 0.2 percent increase for June 2019 remains unchanged.


CFPB Summer Supervisory Highlights

The CFPB has published [84 FR 49250] Issue 19 (Summer 2019) of its Supervisory Highlights, featuring findings in the areas of automobile loan origination, credit card account management, debt collection, furnishing of information to credit reporting companies, and mortgage origination identified in examinations that were generally completed between December 2018 and March 2019. More specifically, the report cites:

  • Automobile loan origination: Abusive acts or practices when selling add-on GAP products, such as selling such a product to consumers whose low loan-to-value meant they would not benefit from the product.
  • Credit card account management:
    • Failures to clearly and conspicuously provide disclosures required by triggering terms in online ads
    • offsets against consumers' deposit funds without sufficient documentation of the consumers' sufficient awareness of and intent to grant a security interest in those funds
    • deceptive threats of repossession or foreclosure in credit card collections
    • deceptive marketing of secured credit card accounts
  • Debt collection: False representation of the amount and legal status of debt
  • Furnishing credit information:
    • Failure to conduct an investigation or respond to a credit reporting company (CRC) after receipt of a dispute from the company
    • Failure to report to all applicable CRCs updates or corrections to information found to be incomplete following a dispute investigation
    • Failures to promptly send corrections or updates to all applicable CRCs after determining that previously furnished information about certain accounts was no longer accurate.
    • Failures of one or more furnishers of deposit account information to furnish updated information regard accounts that were paid in full or settled in full.
    • Failures by one or more furnishers of deposit account information to notify a nationwide specialty CRC that the information was disputed by consumers.
    • Failures to implement reasonable written policies and procedures regarding the accuracy and integrity of deposit account information it furnished to nationwide specialty CRCs
  • Mortgage origination: Inaccurate APR and Total Annual Loan Cost (TALC) disclosures in reverse mortgages


Phiily Fed lowers discount rate

The Federal Reserve Board has announced its approval of the Board of Directors of the Federal Reserve Bank of Philadelphia decreasing the discount rate (the primary credit rate) at the Bank from 2‑3/4 percent to 2-1/2 percent, effective September 20. The Fed Board previously approved similar actions by the Reserve Banks of Boston, New York, Cleveland, Richmond, Atlanta, St. Louis, and Kansas City, effective September 19.


CFPB and FTC to host credit reporting accuracy workshop

The CFPB and the FTC will host a public workshop on December 10, 2019, to discuss issues affecting the accuracy of both traditional credit reports and employment and tenant background screening reports. The agencies seek to bring together stakeholders – including industry representatives, consumer advocates, and regulators – for a wide-ranging public discussion on the many issues impacting the accuracy of consumer reports. The agencies invite interested individuals to submit comments recommending topics that should be addressed or specific information on the following potential topics for discussion:

  • What are the lessons from the CFPB’s supervisory reviews of CRAs and furnishers on accuracy and dispute obligations?
  • What are the lessons from CFPB and FTC enforcement cases on furnisher and CRA accuracy obligations?
  • How do furnishing practices differ based on the types of furnishers and information they furnish to CRAs and how does that impact accuracy?
  • What has been the effect of the removal of most civil judgments and tax liens from credit reports and recent changes in the reporting of medical debt?
  • How do background screening CRAs address accuracy in light of the limited personal identifying information included in public records?
  • What opportunities or challenges does inclusion of non-traditional data in credit reports, credit scoring models, or background screening reports present for accuracy?
  • Can new technologies and data management practices be used to improve accuracy?
  • How do consumers learn about inaccuracies on their consumer reports and navigate the current dispute process? What are the experiences of victims of identity theft in the dispute process?
  • How have the changes to the dispute process contained in the National Consumer Assistance Plan, which evolved out of the 2015 multi-state settlement, impacted the consumer experience?
  • Once consumers get erroneous information removed from their credit files through the dispute process do they still have difficulties getting loans or other credit?
  • What government measures (including changes in the law) and private sector measures could improve accuracy? What are the costs and benefits of these possible measures?

Comments may be submitted until January 20, 2020.


FEMA suspending communities in two states on Friday

The Federal Emergency Management Agency has published [84 FR 49676] a notice in this morning's Federal Register identifying communities in Alaska and Mississippi that are scheduled for suspension from the National Flood Insurance Program on Friday, September 27, 2019, for noncompliance with the floodplain management requirements of the program. The affected communities are:

  • AK: Matanuska-Susitna Borough
  • MS: Picayune, Poplarville, and unincorporated areas of Hancock and Pearl River Counties

Lenders should verify the status of the identified communities, because they may adopt and submit the required documentation of legally enforceable floodplain management measures prior to the scheduled suspension date.


OCC announces enforcement actions

The OCC has released a list of recent enforcement actions taken against individuals now or formerly affiliated with OCC-supervised institutions:

  • A Notice of Charges for an order of prohibition was issued against a former teller of PNC Bank, Wilmington, Delaware, who misappropriated cash from his teller drawer and a ATM, over both of which he had sole control. The Notice announces the OCC’s intention to issue the order of prohibition, subject to the respondent’s right to an administrative hearing of the OCC’s charges.
  • Removal and prohibition orders were issued to:
    • a former teller of The Huntington National Bank, Columbus, Ohio, whom the OCC found to have misappropriated a total of $11,000 in cash while clearing customer cash deposits from ATMs and falsified general ledger tickets to conceal the misconduct
    • a former loan officer of The City National Bank and Trust Company, Lawton, Oklahoma, whom the OCC found to have submitted false or misleading information related to eight loans totaling $7,081,446 from four financial institutions, causing those institutions to lose the total value of the loans. The former loan officer pled guilty to one count of fraud and one count of wire fraud and agreed to pay restitution of $7,081,446 to the four financial institutions.
    • a former phone banker of Wells Fargo Bank, National Association, Sioux Falls, South Dakota, on the basis of activities while serving as a phone banker . The OCC found that the former banker provided bank customers’ credit card numbers to unauthorized individuals who fraudulently used the information, causing a loss to the bank of approximately $7,975.
    • a former branch associate of Capital One, National Association, McLean, Virginia. The OCC found that the former banker assigned temporary debit cards to two customers' accounts without their permission and withdrew a total of $22,606.50 at automated teller machines using the cards.


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