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Top Story Lending Related

12/31/2019

FTC prevails in case against mortgage relief scammers

The Federal Trade Commission has announced that the U.S. District Court for the District of Nevada has ruled in favor of the Commission in a case against the operators of a scheme that deceived financially distressed homeowners by falsely promising to make their mortgages more affordable. The defendants also charged consumers illegal advance fees and unlawfully told consumers not to pay their mortgages to or communicate with their lenders. The case was originally filed by the FTC in January 2018, and the court issued a temporary restraining order against the company at that time. The court found that the defendants’ practices violated the FTC Act and the Mortgage Assistance Relief Services Rule.

Under the terms of the newly issued final order, the defendants will be permanently banned from the debt relief business and will be banned from misleading consumers about the terms of other financial services they may offer, as well as from making misleading claims in advertisements. The ruling also imposes an $18.5 million judgment against the defendants. The order requires that the contents of numerous bank accounts be turned over to the FTC, along with the proceeds from selling assets belonging to the defendants. Among the assets that will be liquidated are a Park City, Utah ski chalet, an office building, a Mercedes Benz S550, and a Porsche Carerra.

The defendants subject to the order are Preferred Law PLLC; Consumer Defense LLC (Nevada); Consumer Defense LLC (Utah); Consumer Link Inc.; American Home Loan Counselors; American Home Loans LLC; Consumer Defense Group LLC, formerly known as Modification Review Board LLC; Brown Legal Inc.; AM Property Management LLC; FMG Partners LLC; Zinly LLC; Jonathan P. Hanley; and Sandra X. Hanley.

12/31/2019

CFPB releases college credit card report

The CFPB has released its 2019 report on college credit cards. The Credit Card Accountability, Responsibility, and Disclosure (CARD) Act requires credit card issuers to submit agreements they make with colleges (and organizations affiliated with colleges) to the CFPB and requires the CFPB to submit a report that lists that information to Congress and make it available to the public.

The report finds that the market for these kinds of college credit cards is getting smaller, continuing a trend that dates back a decade. The Bureau also found that there are fewer issuers this year who are parties to college credit card agreements compared to last year and that agreements with alumni associations continue to make up the largest part of this market.

12/30/2019

FDIC November enforcement actions

The FDIC has released a list of 14 orders of administrative enforcement actions taken against banks and individuals in November. Included was a previously-announced $1.35 million civil money penalty assessed on Homestreet Bank, Seattle, Washington. There were also prohibition orders issued to a former branch banker team leader for Branch Banking and Trust Company, Winston-Salem, NC, found to have stolen funds from a customer's account; and the former president, CEO and vice chairman of the board of The Farmers Bank, Carnegie, OK, found to have intentionally caused the bank to pay for numerous expenses charged to his personal credit card, which were for the benefit of himself or his family. The Farmers Bank was also issued a Prompt Corrective Action order.

12/30/2019

Regulators issue statement regarding extension of credit for Reg O

The OCC, Federal Reserve Board, and the FDIC have issued a “Statement Regarding Status of Certain Investment Funds and Their Portfolio Investments for Purposes of Regulation O and Reporting Requirements Under Part 363 of FDIC Regulations.” This interagency statement explains that the agencies will exercise discretion not to take action against banks, or against certain asset managers that become principal shareholders of banks (principal shareholder fund complexes), with respect to certain extensions of credit by banks to portfolio companies of the principal shareholder fund complex (fund complex-controlled portfolio companies) that otherwise would violate Regulation O, provided certain eligibility criteria are satisfied.

The federal banking agencies are providing this temporary relief while the Fed, in consultation with the other federal banking agencies, considers whether to amend Regulation O to address this issue.

12/30/2019

Public housing to get $5M from HUD

HUD has announced the award of $5 million to public housing authorities to provide tenant protection vouchers to public housing residents. These vouchers will help families with relocation or replacement housing from demolition or mandatory conversion of their public housing units. Additionally, the vouchers will provide assistance to families living in section 8 projects for which the owner is opting out of the housing assistance payment contract.

12/29/2019

Agencies adjust CRA bank size definitions

The FDIC, Federal Reserve Board and OCC have published [84 FR 71738] a final rule adjusting for inflation the definition thresholds for small and intermediate-small financial institutions under their Community Reinvestment Act regulations at 12 CFR Parts 25, 195, 228 and 345.

Effective January 1, 2020, a small bank will be a bank that, as of December 31 of either of the prior two calendar years, had assets of less than $1.305 billion. An intermediate small bank will be a small bank with assets of at least $326 million as of December 31 of both of the prior two calendar years and less than $1.305 billion as of December 31 of either of the prior two calendar years.

12/24/2019

FDIC Supervisory Insights Fall 2018 issue posted

The FDIC has posted the Fall 2019 issue of Supervisory Insights, which contains two articles of interest to bank management:

  • "Commercial Real Estate Loan Concentration Risk Management" examines commercial real estate (CRE) exposure in the banking industry. The article also summarizes findings from recent risk management supervisory activities for FDIC-supervised insured depository institutions (IDIs) with CRE lending concentrations.
  • "Leveraged Lending: Evolution, Growth and Heightened Risk" provides an overview of the leveraged lending market, discusses the risks associated with leveraged lending, and includes observations regarding current underwriting practices from examinations at state nonmember insured depository institutions and information from the Shared National Credit Program.

12/23/2019

Extension for comments on consumer reporting accuracy

The FTC and the CFPB have extended the deadline to submit comments on issues affecting the accuracy of consumer reports until January 31, 2020. Comments are requested on issues affecting the accuracy of both traditional credit reports and employment and tenant background screening reports. Comments were originally due by January 10, 2020.

12/23/2019

Comment period reopened for proposed Swap Margin Rule

The Fed, FDIC, OCC, Farm Credit Administration, and the Federal Housing Finance Agency have announced they will reopen and extend until January 23, 2020, the comment period on a proposal to change the swap margin rules to facilitate the implementation of prudent risk management strategies at certain banks and swap entities. The agencies extended the comment period to allow interested persons more time to analyze the issues and prepare their comments, which were originally due by December 9, 2019.

12/23/2019

OCC announces enforcement actions

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

  • Mutual of Omaha Bank and a subsidiary were assessed a penalty for violations of the Flood Disaster Protection Act and implementing regulations.
  • a Fairfield, Iowa, bank was issued a consent cease and desist order
  • An executive director and a managing director of JPMorgan Chase Bank, N.A., Columbus, Ohio, were suspended from their positions at the bank and prohibited from further participation in the affairs of the bank or any other depository institution, pending final disposition of criminal proceedings alleging commodities fraud.

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