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Top Story Lending Related

07/20/2020

Fed modifies Main Street Lending Program

The Federal Reserve Board has announced modifications to the Main Street Lending Program to provide greater access to credit for nonprofit organizations such as educational institutions, hospitals, and social service organizations.

As detailed in term sheets released Friday, the Board approved two new loan options to provide support to a broad set of nonprofit organizations that were in sound financial condition prior to the pandemic. Based on public feedback to proposals released for comment on June 15, the minimum employment threshold for nonprofits was lowered from 50 employees to 10, the limit on donation-based funding was eased, and several financial eligibility criteria were adjusted to accommodate a wider range of nonprofit operating models. Additionally, like the proposed terms, each organization must be a tax-exempt organization as described in section 501(c)(3) or 501(c)(19) of the Internal Revenue Code.

Term sheets:

07/20/2020

FEMA revises Flood Program regulations

FEMA has published a final rule [85 FR 43946] amending its regulations at 44 CFR parts 59 (General Provisions), 61 (Insurance Coverage and Rates) and 62 (Sale of Insurance and Adjustment of Claims), to codify certain provisions of the Biggert-Waters Flood Insurance Reform Act of 2012 and the Homeowner Flood Insurance Affordability Act of 2014, and to clarify certain existing NFIP rules relating to NFIP operations and the Standard Flood Insurance Policy.

This final rule was preceded by a notice of proposed rulemaking on July 16, 2018 (83 FR 32956). The final rule will become effective October 1, 2021.

07/20/2020

FEMA suspending communities in IA and PA from flood program

FEMA has published a final rule [85 FR 43708] in the July 20 Federal Register listing communities in Iowa and Pennsylvania that are scheduled for suspension from the National Flood Insurance Program on July 22, 2020, for noncompliance with the flood plain management requirements of the program.

  • Iowa: Andover, Calamus, Camanche, Clayton, Clinton, DeWitt, Elkader, Elkport, Form Madison, Garber, Garnavillo, Goose Lake, Grand Mound, Guttenberg, Keokuk, Lost Nation, Low Moor, Luana, Marquette, McGregor, Montrose, North Buena Vista, Saint Olaf, Strawberry Point, Toronto, Welton, and unincorporated areas of Clayton, Cllnton, and Lee counties
  • Pennsylvania: Butler, Carroll Valley, Cumberland, Hamiltonban, Littlestown, Menallen, Mount Joy, Mount Pleasant, Straban, and Union

07/17/2020

Florida-based credit card interest reduction scam halted

The Federal Trade Commission has reported a federal court in Florida has temporarily halted an alleged sham credit card interest rate reduction operation that often targeted financially distressed consumers and older adults.

The court’s order temporarily halts the Orlando-based operation, freezes its assets, and appoints a receiver over the businesses. In a joint complaint, the FTC and Florida Attorney General’s Office are seeking to permanently stop the conduct and secure money for consumer refunds. According to the complaint, the defendants blasted consumers with telemarketing cold calls promising to permanently and substantially reduce their credit card interest rates. After duping consumers into believing they were affiliated with the consumer’s existing credit card companies or well-known credit card networks such as Mastercard or Visa, the defendants allegedly promised to save them thousands of dollars in credit card interest and enable them to pay off their credit card debt three to five times faster. The agencies allege the defendants charged upfront fees of as much as $3,995 for their bogus services.

07/17/2020

Regulatory relief for Michigan after severe storms

The FDIC has announced steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Michigan affected by severe storms and flooding.

  • The FDIC is encouraging banks to work constructively with borrowers experiencing difficulties beyond their control because of damage caused by the severe weather.
  • Extending repayment terms, restructuring existing loans, or easing terms for new loans, if done in a manner consistent with sound banking practices, can contribute to the health of the local community and serve the long-term interests of the lending institution.
  • Banks may receive favorable Community Reinvestment Act consideration for community development loans, investments, and services in support of disaster recovery.
  • The FDIC also will consider regulatory relief from certain filing and publishing requirements.

07/17/2020

OCC releases enforcement actions

The OCC has released a list of enforcement actions against national banks, federal savings associations, and individuals now or formerly affiliated with such institutions.

  • Neighborhood National Bank, San Diego, California, was assessed a civil money penalty for BSA/AML deficiencies
  • First Niagara Bank, N.A., Buffalo, New York, was assessed a $43,000 civil money penalty for Flood Act violations (the order, released yesterday, was dated July 25, 2016)
  • Two lenders, formerly affiliated with Barrington Bank & Trust Company, N.A., were each fined $5,000 and ordered to cease and desist, for sharing confidential customer information with a prospective new employer
  • A former teller and ATM custodian for JPMorgan Chase Bank, N.A., Columbus, Ohio, was issued a consent order of prohibition after a finding that he stole $20,000 from the bank's ATMs.
  • A former lead teller at Capital One, N.A., McLean, Virginia, was issued a consent order of prohibition after a finding that she stole $22,500 from a bank customer's account

07/16/2020

CFPB tool: How to pay for college

The CFPB has released a web tool, "Your Financial Path to Graduation," designed to help students clearly understand the total cost of attending college and make informed decisions about paying for their education.

The tool helps students turn financial aid offers into plans to pay for school step-by-step. Along the way, it explains terms, offers money saving tips, and tracks uncovered costs. Once students finish making a plan, the tool estimates the total debt at graduation and offers information to help the student evaluate whether that debt is affordable in the long run. Students can save their plans and revise them if their circumstances change.

07/16/2020

CFPB sues non-bank mortgage creditor for redlining

A CFPB press release reports that the Bureau has filed a lawsuit against Townstone Financial, Inc., a nonbank retail-mortgage creditor based in Chicago, for violations of the Equal Credit Opportunity Act, Regulation B; and the Consumer Financial Protection Act. ECOA and Regulation B prohibit mortgage lenders from discriminating against applicants in credit transactions on the basis of race, color, national origin, or other prohibited bases. ECOA and Regulation B also prohibit mortgage lenders from making statements, or engaging in acts or practices, that would discourage, on a prohibited basis, applicants or prospective applicants from applying for credit. The Bureau’s complaint alleges that Townstone violated ECOA and Regulation B by engaging in discriminatory mortgage-lending practices and that these violations also constituted violations of the CFPA. The complaint says that Townstone:

  • engaged in acts or practices, including making statements during its weekly radio shows and podcasts through which it marketed its services, that illegally discouraged prospective African-American applicants from applying to Townstone for mortgage loans;
  • engaged in illegal redlining by engaging in acts or practices that discouraged prospective applicants living in African-American neighborhoods in the Chicago MSA from applying to Townstone for mortgage loans, including by making discouraging statements during its weekly radio shows and podcasts through which it marketed its services; and
  • engaged in illegal redlining by engaging in acts or practices that discouraged prospective applicants living in other areas from applying to Townstone for mortgage loans for properties located in African-American neighborhoods in the Chicago MSA, including by making discouraging statements during its weekly radio shows and podcasts through which it marketed its services.

07/16/2020

Bureau article on military consumer protection

To mark Military Consumer Protection Month and National Consumer Protection Week, the CFPB has posted a blog article, "Alphabet soup: The ABCs of military consumer protection." The article summarizes and provides links to information on:

  • The Servicemembers Civil Relief Act (SCRA)
  • The Military Lending Act (MLA)
  • The Fair Debt Collection Practices Act (FDCPA)
  • The Fair Credit Reporting Act (FCRA)
  • Local and state laws

07/16/2020

NMLS Policy Guidebook updated

An updated version of the NMLS Policy Guidebook and a summary of changes have been posted to the NMLS Resource Center.

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