Top Story Lending Related

The Bureau has announced the release of the CFPB's fourth Annual Servicemembers Report, which analyzes over 19,000 complaints received in 2015 from servicemembers, veterans, and their families, and details related enforcement and outreach efforts. The number of complaints increased 13 percent over those in 2014. For the second year in a row, debt collection, mortgages, and credit reporting were the top three complaint categories for the military community. Debt collection was the top complaint category, comprising nearly half of the military complaints.

The Federal Deposit Insurance Corporation, Federal Reserve Board of Governors, Financial Crimes Enforcement Network, National Credit Union Administration, and Office of the Comptroller of the Currency issued guidance on Monday clarifying the applicability of the Customer Identification Program (CIP) rule to prepaid cards issued by banks. The guidance applies to banks, savings associations, credit unions, and U.S. branches and agencies of foreign banks (collectively "banks"). The guidance clarifies that a bank's CIP should apply to the holders of certain prepaid cards issued by the institution as well as holders of such prepaid cards purchased under arrangements with third-party program managers that sell, distribute, promote, or market the prepaid cards on the bank's behalf.

• The applicable CIP requirements are derived by, first, determining whether an Account (as defined) is created and, second, identifying the Customer (as defined).
• An Account is created when a Customer exercises the ability to reload funds onto the prepaid card, or accesses the prepaid card's credit or overdraft features.
• Depending on the nature of the prepaid card program, the Customer could be either the cardholder or the third-party card provider.
• A bank's CIP requirements should be applied to the Customer.
• The guidance also reiterates a bank's responsibility of entering into well-constructed, enforceable contracts with third-party program managers.

• Interagency Guidance to Issuing Banks on Applying Customer Identification Program Requirements to Holders of Prepaid Cards
• FDIC Press Release
• Board of Governors Press Release
• OCC Bulletin 2016-10
• NCUA Press Release
• FinCEN Press Release
  

The NMLS has released its 2016 annual mortgage industry report, which provides an analysis of the mortgage entities who were licensed or registered through NMLS in 2015.

The Bureau has posted a Blog entry in its "Mortgage Moves" series, "How much can you afford?” an article for consumers who are buying their first home. It discusses some of the decisions a prospective homeowner will need to make when exploring mortgage options. The CFPB tool, “Owning a Home,” is recommended along with signing up on the regulator’s “Owning a Home” email list to receive alerts when additional information is posted. This is the second in the "Mortgage Moves" series.

In remarks at the National Community Reinvestment Coalition annual conference, Comptroller Curry, discussed how innovative financial products and services are considered under the Community Reinvestment Act and also highlighted the agency’s initiatives in support of responsible bank innovation.

The OCC has released a list of recent enforcement actions taken against national banks, federal savings associations, and individuals currently and formerly affiliated with national banks and federal savings associations. Three Civil Money Penalty (CMP) orders were issued, four formal agreements were issued or amended, one personal cease and desist order issued, and six removal/prohibition orders were issued. One of the CMP orders, for the payment of $4 million, was issued to Gibraltar Private Bank & Trust Co., Coral Gables, Florida, and previously reported in a February 26 Top Story. Another of the CMP orders, for the payment of $25,000, was directed to Sun National Bank, Vineland, New Jersey, for identified deficiencies in the Bank’s mortgage banking practices that resulted in violations of 12 C.F.R. Part 1024 – Real Estate Settlement Procedures Act; 12 C.F.R. Part 1002 – Equal Credit Opportunity Act; and 12 C.F.R. Part 1026 – Truth in Lending Act. And the third, for the payment of $20,000, was issued to the former president and director of Bank of Indiana, Dana, Indiana, for alleged lending irregularities which the OCC found to be unsafe or unsound practices that breached his fiduciary duty to the Bank; which practices were part of a pattern of misconduct and caused or were likely to cause more than a minimal loss to the Bank.

The CFPB has announced a federal district court entered a final judgment against Morgan Drexen, Inc., a debt relief company, resolving a lawsuit filed by the CFPB in August 2013. The Bureau’s lawsuit alleged that the company charged illegal upfront fees and deceived consumers. The court found that the company violated federal law, prohibited Morgan Drexen from collecting any further fees from its customers, and ordered it to pay $132,882,488 in restitution and a $40 million civil penalty. More information can be found in our Penalty Page entry.

Controller Curry has announced that Grace Dailey will become Senior Deputy Comptroller for Bank Supervision Policy and Chief National Bank Examiner, and Grovetta Gardineer will fill the newly created position of Senior Deputy Comptroller for Compliance and Community Affairs.

The NCUA has announced the availability of the audio recording and written transcript of the February 9, 2016, town hall webinar hosted by NCUA Chairman Matz and CFPB Director Cordray, which are available online. The topics discussed included:

• The status of the overdraft protection rule,
• Consumer access to checking accounts and prepaid cards,
• The NCUA’s member-business lending rule, and
• The impact of the Military Lending Act rule.

The OCC has issued Bulletin 2016-9 announcing the revision of the oil and gas (O&G) exploration and production lending booklet of the Comptroller’s Handbook. The revised booklet replaces one issued in April 2014. It provides updated guidance to examiners on the risks inherent in lending to upstream oil and gas exploration and production companies and provides supervisory guidance on prudent risk management of this lending activity. The booklet also includes expanded examiner guidance for evaluating exploration and production loans and the impact that these lending activities have on the risk profile and financial condition of national banks and federal savings associations.