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Top Story Lending Related

11/06/2020

Bureau files complaint against student loan debt relief companies

The CFPB yesterday filed a complaint against Performance SLC, LLC (PSLC), a California debt-relief business focused on federal student loan debt; Performance Settlement, LLC (PSettlement), a California debt-settlement company; and Daniel Crenshaw, the owner and CEO of the two companies.

The Bureau alleges that PSLC and Crenshaw charged illegal advance fees in violation of the Telemarketing Sales Rule (TSR) to student loan borrowers seeking to obtain loan consolidation, loan forgiveness, or income-driven repayment plans for their federal student loans, and that PSLC failed to make required disclosures to certain consumers in violation of the TSR. The Bureau also alleges that PSettlement and Crenshaw used deceptive tactics in violation of the Consumer Financial Protection Act (CFPA) in order to induce consumers to sign up for PSettlement’s services. The complaint seeks redress to consumers, injunctive relief, and the imposition of civil money penalties against the defendants.

11/06/2020

CFPB issues no-action letter to BofA

The CFPB announced yesterday it has granted a no-action letter (NAL) to Bank of America, N.A. regarding certain small-dollar credit products. The NAL provides increased regulatory certainty that the Bureau will not bring a supervisory or enforcement action against a company for providing a product or service under certain facts and circumstances. Bank of America’s NAL application is based on the NAL Template issued by the Bureau on May 22, 2020 in response to an application from the Bank Policy Institute. The Bureau approved the NAL Template to further competition in the small-dollar lending space, which fosters access to credit while including important protections for consumers who seek small-dollar loan products.

11/06/2020

OCC Director’s Toolkit updated

The OCC has announced the update of its Director’s Toolkit to help bank directors for national banks and federal savings associations fulfill their corporate governance responsibilities. The Toolkit is a helpful guide for bank directors on strategic issues, risk management, and compliance responsibilities. The updated toolkit includes a revised Director's Book: Role of Directors for National Banks and Federal Savings Associations and adds a new publication, the Director’s Reference Guide to Board Reports and Information.

11/06/2020

FOMC statement issued

The Federal Reserve Board has voted unanimously to maintain the interest rate paid on required and excess reserve balances at 0.10 percent, effective November 6, 2020. As part of its policy decision, the Federal Open Market Committee (FOMC) voted to authorize and direct the Open Market Desk at the Federal Reserve Bank of New York, until instructed otherwise, to execute transactions in the System Open Market Account in accordance with the following domestic policy directive:

  • Undertake open market operations as necessary to maintain the federal funds rate in a target range of 0 to 1/4 percent.
  • Increase the System Open Market Account holdings of Treasury securities and agency mortgage-backed securities (MBS) at the current pace. Increase holdings of Treasury securities and agency MBS by additional amounts and purchase agency commercial mortgage-backed securities (CMBS) as needed to sustain smooth functioning of markets for these securities
  • Conduct term and overnight repurchase agreement operations to support effective policy implementation and the smooth functioning of short-term U.S. dollar funding markets.
  • Conduct overnight reverse repurchase agreement operations at an offering rate of 0.00 percent and with a per-counterparty limit of $30 billion per day; the per-counterparty limit can be temporarily increased at the discretion of the Chair.
  • Roll over at auction all principal payments from the Federal Reserve's holdings of Treasury securities and reinvest all principal payments from the Federal Reserve's holdings of agency debt and agency MBS in agency MBS.
  • Allow modest deviations from stated amounts for purchases and reinvestments, if needed for operational reasons.
  • Engage in dollar roll and coupon swap transactions as necessary to facilitate settlement of the Federal Reserve's agency MBS transactions.

The Board also voted unanimously to approve the maintain the primary credit rate at the existing level of 0.25 percent.

11/05/2020

FDIC CRA ratings released

The FDIC has posted a list of 72 banks recently evaluated for compliance with the Community Reinvestment Act. The list covers evaluation ratings that the FDIC assigned to institutions in August 2020. Sixty-six banks received a Satisfactory rating, and we congratulate the following six banks, which were rated Outstanding:

11/05/2020

Treasury Department quarterly refunding statement

The Treasury Department has announced it is offering $122 billion of Treasury securities to refund approximately $60.9 billion of privately-held Treasury notes maturing on November 15, 2020. This issuance will raise new cash of approximately $61.1 billion. The securities are:

  • A 3-year note in the amount of $54 billion, maturing November 15, 2023;
  • A 10-year note in the amount of $41 billion, maturing November 15, 2030; and
  • A 30-year bond in the amount of $27 billion, maturing November 15, 2050.

The 3-year note will be auctioned on a yield basis at 1:00 p.m. ET on Monday, November 9, 2020. The 10-year note will be auctioned on a yield basis at 1:00 p.m. ET on Tuesday, November 10, 2020. The 30-year bond will be auctioned on a yield basis at 1:00 p.m. ET on Thursday, November 12, 2020. All of these auctions will settle on Monday, November 16, 2020.

11/04/2020

Agenda for FTC Franchise Rule virtual workshop

The Federal Trade Commission has released the agenda for the Franchise Rule virtual workshop on November 10. The workshop will explore a number of issues related to the Franchise Rule, and the comments received in response to the FTC’s request for comment about the Rule last year. The Rule is designed to ensure that consumers who are considering buying a franchise have key information they need to weigh the risks and benefits of that potential investment.

The workshop will take place online from 1:00 – 4:30 p.m. ET. A link to view the event will be posted on the event page prior to the start of the event. Registration is not required. It will be webcast live on the FTC’s website and live tweeted from the FTC’s Twitter page (@FTC) using the hashtag #FranchiseRuleFTC.

11/04/2020

SEC SBCFAC agenda released

The Securities and Exchange Commission has released the agenda for the Monday, November 9, 2020, meeting of its Small Business Capital Formation Advisory Committee (SBCFAC), which will be hosted via video conference.

The Committee will discuss the Commission’s recent proposal to create a limited, conditional exemption from broker registration requirements for “finders” who assist companies with raising capital in private markets from accredited investors. During the meeting, the Committee will also continue its discussions on how small businesses are coping with the COVID-19 pandemic and share observations from their areas of the marketplace. The meeting will run from 10 a.m. – 2:30 p.m. ET and will be webcast live on SEC.gov The webcast will be archived on the Committee webpage for later viewing.

11/03/2020

SMART payment plan deception ends in CFPB settlement

The CFPB has issued a consent order against SMART Payment Plan, LLC (Austin, Texas), after finding that the company's disclosures of its loan accelerator program were misleading and in violation of the Consumer Financial Protection Act's prohibition against deceptive acts or practices. SMART operates a loan payment accelerator program for auto loans called the SMART Plan that deducts payments from consumers’ bank accounts every two weeks and then forwards these payments every month to the consumers’ lenders. The consent order imposes a judgment against SMART requiring it to pay $7,500,000 in consumer redress and requirements to prevent future violations.

SMART provided consumers individualized “benefits summaries” that purported to state a specific amount of interest savings or other money savings consumers would get by enrolling in the SMART Plan, but SMART’s fees would ordinarily exceed the savings. SMART’s disclosures thus created the misleading impression that consumers would save money using its product.

The ordered consumer redress has been suspended upon SMART's payment of $1,500,000 by December 31, and a $1 civil money penalty to the Bureau (based on SMART'S inability to pay more based on sworn financial statements.

For additional information and a link to the Bureau's consent order, see "SMART Payment Plan LLC settles with Bureau over misleading statements" in the BankersOnline Penalty pages.

11/03/2020

NCUA fair lending and consumer compliance webinar announced

The NCUA has announced it will host a webinar on November 17, 2020, on a range of fair lending and consumer compliance topics. Registration for the “Fair Lending and Consumer Compliance Regulatory Update” webinar is open. The session is scheduled to begin at 3 p.m. Eastern Time and last approximately 60 minutes. The webinar will be closed-captioned and archived online approximately three weeks following the live event.

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