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10/15/2020

FHA Catalyst available for multifamily lenders

The FHA has announced the availability of the first module of its FHA Catalyst technology platform for Multifamily lenders doing business with FHA. The module will allow eligible lenders to electronically submit applications for FHA insurance on multifamily properties. The new capability supports lenders in providing FHA-insured mortgage financing while working remotely because of the COVID-19 pandemic.

10/14/2020

Fed discount rate meetings minutes released

The Federal Reserve Board has released the minutes of its interest rate meetings from August 24 through September 16, 2020.

10/14/2020

CFPB settles with Nissan Motor Acceptance Corp

The CFPB has announced it has issued a consent order against Nissan Motor Acceptance Corporation (NMAC), an auto financing subsidiary of Nissan North America, Inc., which services auto loans and leases originated by Nissan and Infiniti dealerships nationwide.

The Bureau found that NMAC and its agents:

  • wrongfully repossessed vehicles;
  • kept personal property in consumers’ repossessed vehicles until consumers paid a storage fee;
  • deprived consumers paying by phone of the ability to select payment options with significantly lower fees; and
  • in its loan extension agreements, made a deceptive statement that appeared to limit consumers’ bankruptcy protections.

These actions violated the Consumer Financial Protection Act’s (CFPA) prohibition against unfair and deceptive acts and practices.

The Bureau’s consent order requires Nissan to refund fees paid by consumers, credit any outstanding charges stemming from the repossession, and pay consumers redress for each day Nissan wrongfully held the car. Nissan must also pay a civil money penalty of $4 million. The consent order also requires Nissan to:

  • prohibit its repossession agents from charging personal property fees to consumers directly and from demanding fees as a condition of returning personal property;
  • correct its repossession practices and conduct a quarterly review to discover and remediate any future wrongful repossessions;
  • clearly disclose to consumers the fee for each method of making a payment by phone before consumers are asked which method they wish to use; and
  • stop using any language that creates the impression that consumers have surrendered their bankruptcy rights.

10/13/2020

FDIC issues FIL on Hurricane Sally relief

The FDIC has issued FIL-96-2020 announcing steps intended to provide regulatory relief to financial institutions and facilitate recovery in areas of Florida affected by Hurricane Sally.

10/13/2020

CIP exemption for premium finance loans

The OCC, Federal Reserve, FDIC, NCUA, and FinCEN have issued an order granting an exemption from the requirements of the customer identification program rules implementing section 326 of the USA PATRIOT Act for certain loans. The affected loans are those extended by banks. credit unions and their subsidiaries under the jurisdiction of the agencies to all customers (entities and individuals) to facilitate purchases of property and casualty insurance policies referred to as insurance premium finance lending or premium finance loans.

This order, which is dated October 5, 2020, supersedes an order issued September 27, 2018.

10/09/2020

School-affiliated credit card decline continues

The CFPB yesterday issued its annual College Credit Card Agreements report to Congress, which covers agreements between credit card issuers and institutions of higher education, as well as certain organizations affiliated with such institutions. The report indicates that in 2019 the number of total agreements in effect, as well as the number of accounts open under the agreements, continues a general downward trend. Overall, between 2009 and 2019, the number of agreements in effect, year-end open accounts, and payments by issuers all declined by more than two-thirds. Agreements with alumni associations continue to represent the large majority of agreements, accounts, and payments by issuers.

10/09/2020

Simpler forgiveness application for small PPP loans

Treasury has announced that the SBA has released a simpler loan forgiveness application and application instructions for Paycheck Protection Program loans of $50,000 or less, and issued an interim final rule on its simpler forgiveness process.

The SBA began approving PPP forgiveness applications and remitting forgiveness payments to PPP lenders for PPP borrowers on October 2, 2020.

10/08/2020

Bureau issues RESPA Section 8 FAQs

The Consumer Financial Protection Bureau has published guidance in the form of FAQs on Real Estate Settlement Procedures Act (RESPA) Section 8 topics. The FAQs, which the CFPB has issued as a Compliance Aid, provide an overview of the provisions of RESPA Section 8 and respective Regulation X sections, and address the application of certain provisions to common scenarios described in Bureau inquiries involving gifts and promotional activities, and marketing services agreements (MSAs).

The Bureau also said it has determined that Compliance Bulletin 2015-05, "RESPA Compliance and Marketing Services Agreements," does not provide the regulatory clarity needed on how to comply with RESPA and Regulation X and therefore is rescinding it. The Bureau’s rescission of the Bulletin does not mean that MSAs are per se or presumptively legal. Whether a particular MSA violates RESPA Section 8 will depend on specific facts and circumstances, including the details of how the MSA is structured and implemented. MSAs remain subject to scrutiny.

10/08/2020

Consumer credit decreases

The Federal Reserve has released its G.19 Consumer Credit Report for August 2020, which reports consumer credit decreased at a seasonally adjusted annual rate of 2 percent. Revolving credit decreased at an annual rate of 11-1/4 percent, while nonrevolving credit increased at an annual rate of 3/4 percent.

10/08/2020

Citibank fined $400M for risk management deficiencies

The OCC announced yesterday it has issued Citibank, N.A., Sioux Falls, South Dakota, a $400 million civil money penalty order related to deficiencies in enterprise-wide risk management, compliance risk management, data governance, and internal controls. The OCC took that action based on the bank’s unsafe or unsound banking practices for its long-standing failure to establish effective risk management and data governance programs and internal controls. This failure also resulted in a violation of 12 CFR Part 30, Appendix D, “OCC Guidelines Establishing Heightened Standards for Certain Large Insured National Banks, Insured Federal Savings Associations, and Insured Federal Branches.”

The agency also issued a cease and desist order requiring the bank to take broad and comprehensive corrective actions to improve risk management, data governance, and internal controls. The order requires the bank to seek the OCC’s non-objection before making significant new acquisitions and reserves the OCC’s authority to implement additional business restrictions or require changes in senior management and the bank’s board should the bank not make timely, sufficient progress in complying with the order.

Further information on the OCC's actions, with links to the consent orders, can be found HERE, in BankersOnline's Penalty pages.

The Federal Reserve Board announced a separate but related action against Citigroup, the bank’s holding company. In a cease and desist order, the Board requires Citigroup to enhance its firm-wide risk management and internal controls. Among other things, the firm has not taken prompt and effective actions to correct practices previously identified by the Board in the areas of compliance risk management, data quality management, and internal controls.

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