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Top Story Lending Related

12/22/2020

Stimulus bill sent to president

Congress has approved and sent to the president for enactment the long-anticipated $900 billion coronavirus relief package in a record-breaking 5,500 plus-page bill. Key provisions affecting banks include:

  • An additional $284 billion in funding for the Paycheck Protection Program, included an option for prior PPP borrowers to obtain additional funds. Fifteen billion dollars were set aside for PPP loans by community financial institutions.
  • A hold-harmless provision for lenders from penalties related to borrower or applicant certifications for PPP loans
  • A simplified forgiveness process for PPP loans up to $150,000
  • A second round of economic impact payments (stimulus checks) for eligible recipients, that will not be subject to garnishment. Treasury Secretary Mnuchin predicts direct deposits of these payments could start next week.
  • An extension of federally-enhanced unemployment insurance payments
  • Extension until January 1, 2022, of the troubled debt restructuring provisions in the CARES Act
  • A delay of CECL implementation until January 1, 2022.

12/22/2020

FHA foreclosure and eviction moratorium extended

The Federal Housing Administration has announced it is extending the foreclosure and eviction moratorium for single family FHA-insured mortgages for an additional two months, through February 28, 2021. The FHA is also extending through February 28, 2021, the deadline for single family borrowers with FHA-insured mortgages to request an initial COVID-19 forbearance from their mortgage servicer to defer or reduce their mortgage payments for up to six months, which can be extended for an additional six months.

To assist lenders and servicers in continuing to supply FHA-insured affordable mortgage financing despite the considerations for social distancing, today FHA also extended:

  • The timeframe for providing an insurance endorsement on single family mortgages in forbearance through March 31, 2021
  • Temporary re-verification of employment guidance and exterior-only appraisal inspection option through February 28, 2021
  • Temporary provisions for verification of self-employment, rental income, and 203(k) Rehabilitation Mortgage escrow accounts through February 28, 2021

12/22/2020

Bureau Advisory Opinion on special-purpose credit programs

The CFPB has announced it has issued an advisory opinion to address regulatory uncertainty regarding Regulation B, which implements the Equal Credit Opportunity Act, as it applies to certain aspects of special purpose credit programs (SPCPs).

Under Regulation B, discrimination is prohibited on certain prohibited bases in any aspect of a credit transaction, but it is not discrimination for a for-profit organization to provide SPCPs designed to meet special social needs. The creditor offering the SPCP must determine the status of its own program in that regard. The regulation provides general guidance on compliance.

The CFPB has issued its advisory opinion with the hope that more creditors will offer SPCPs and increase access to credit to underserved groups. Specifically, the Bureau seeks to clarify the content that a for-profit organization must include in a written plan that establishes and administers a SPCP under Regulation B. The advisory opinion also clarifies the type of research and data that may be appropriate to inform a for-profit organization’s determination that a SPCP would benefit a certain class of people.

12/22/2020

Small-creditor asset threshold for escrow exemption adjusted

The CFPB has published in today's Federal Register a final rule making an inflation adjustment to the asset-size threshold for certain creditors to qualify for an exemption from the requirement to establish an escrow account for a higher-priced mortgage loan under section 1026.35 of Regulation Z. The threshold is adjusted, effective January 1, 2021, to $2.230 billion from $2.202 billion. Therefore, creditors with assets of less than $2.230 billion (including assets of certain affiliates) as of December 31, 2020, will be exempt, if other requirements of section 1026.35(b)(2)(iii) of Regulation Z are also met, from establishing escrow accounts for higher-priced mortgage loans in 2021. The change is effective January 1, 2021.

The BankersOnline Regulations page for Regulation Z § 1026.35 and its Official Interpretations has been updated, noting and correcting an error in the published rule.

12/22/2020

HMDA asset-size exemption threshold adjustment

The CFPB has published in the December 22, 2020, Federal Register a final rule adjusting the Regulation C (HMDA) asset-size exemption threshold for banks, savings associations, and credit unions for inflation. For calendar year 2021, that threshold is increased from $47 million to $48 million. Therefore, banks, savings associations, and credit unions with assets of $48 million or less as of December 31, 2020, will be exempt from collecting HMDA data in 2021.

The BankersOnline Regulations pages for Regulation C have been updated.

12/21/2020

Bureau issues second piece of FDCPA final rule

On Friday, the CFPB announced a final rule to implement Fair Debt Collection Practices Act (FDCPA) requirements regarding certain disclosures for consumers. The rule requires debt collectors to provide, at the outset of collection communications, detailed disclosures about the consumer’s debt and rights in debt collection, along with information to help consumers respond. The rule requires debt collectors to take specific steps to disclose the existence of a debt to consumers, orally, in writing, or electronically, before reporting information about the debt to a consumer reporting agency (CRA). The rule prohibits debt collectors from making threats to sue, or from suing, consumers on time-barred debt.

The rule will become effective on November 30, 2021, with the rule reissuing Regulation F published on November 30, 2020.

12/21/2020

Mortgage servicer settles with CFPB

The Bureau has issued a consent order against Seterus, Inc. (Seterus) and Kyanite Services, Inc. (Kyanite), as Seterus’s successor in interest, based on the Bureau’s finding that Seterus violated the Consumer Financial Protection Act of 2010 (CFPA) and Regulation X. The Bureau found that Seterus’s actions resulted in delaying or depriving some borrowers of a reasonable opportunity to get their loss mitigation applications completed and evaluated and in some borrowers' failing to timely receive protections against prohibited foreclosure activities to which they were legally entitled.

The order requires Kyanite to pay $4,932,525 in total redress to approximately 11,866 of the consumers to whom Seterus sent a defective acknowledgment notice. The order also imposes a $500,000 civil money penalty and includes injunctive relief that would apply in the event Kyanite engages in mortgage servicing. At its height, Seterus, a former mortgage servicer based in North Carolina, serviced approximately 500,000 residential mortgage loans. Seterus is no longer operating. On February 28, 2019, after the relevant period covered by the Bureau’s investigation, Seterus was sold and its entire mortgage servicing portfolio was transferred to Nationstar Mortgage LLC, doing business as Mr. Cooper (with which the Bureau reached a separate settlement earlier this month.

12/18/2020

NCUA Board approves rules and proposals

The National Credit Union Administration Board held the first of two consecutive open meetings in December. At the meeting, the Board approved these five items:

  • A final rule on subordinated debt.
  • A temporary final rule that extends regulatory relief measures in response to COVID-19.
  • A proposed rule that permits federal credit unions to purchase mortgage-servicing rights from other federal credit unions under certain conditions;
  • A proposed rule revising the definition of a service facility for multiple common bond federal credit unions; and
  • A proposed rule on overdraft policy

12/18/2020

OCC November enforcement actions

The OCC has released a list of enforcement actions taken in November, which included:

12/18/2020

Fed and FDIC adjust CRA thresholds

The Federal Reserve Board and FDIC have jointly announced the annual adjustment to the asset-size thresholds used to define small bank and intermediate small bank under their Community Reinvestment Act (CRA) regulations. Financial institutions are evaluated under different CRA examination procedures based upon their asset-size classification. Those meeting the small and intermediate small institution asset-size thresholds are not subject to the reporting requirements applicable to large banks unless they choose to be evaluated as a large institution. The definitions of small and intermediate small institutions for CRA examinations will change on January 1, 2021, as follows:

  • "Small bank" means an institution that, as of December 31 of either of the prior two calendar years, had assets of less than $1.322 billion.
  • "Intermediate small bank" means a small institution with assets of at least $330 million as of December 31 of both of the prior two calendar years and less than $1.322 billion as of December 31 of either of the prior two calendar years.

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