Top Story Lending Related

This week, 845 former Student Aid Institute (SAI) consumers will receive checks in the mail in response to a lawsuit filed against Frank Ronald Gebase Jr., the founder, owner, and operator of Processingstudentloans, a student loan debt-relief company that illegally withdrew hundreds of thousands of dollars from the bank accounts of former SAI consumers without their authorization. The total distribution amount is $240,994.00, and the money is from the CFPB’s victims relief fund.

Payments were sent on November 13, 2023, through RUST Consulting.

• CFPB press release

The CFPB has issued a final rule to be effective January 1, 2024, to establish the maximum allowable charge for disclosures during 2024 by a consumer reporting agency to a consumer under section 609 of the Fair Credit Reporting Act. The CFPB is amending Appendix O to Regulation V, to set the maximum allowable charge at $15.50 for 2024.

BankersOnline has updated Appendix O to Regulation V in its Regulations pages to reflect this change.

The CFPB, Federal Reserve, and OCC have announced that the 2024 threshold for whether higher-priced mortgage loans are subject to special appraisal requirements will increase from $31,000 to $32,400.

BankersOnline has added comment 35(c)(2)(ii)-3.xi to Regulation Z in its Regulations pages to reflect this change.

The CFPB and the Federal Reserve Board have announced the dollar thresholds used to determine whether certain consumer credit and lease transactions in 2024 are subject to certain Regulation Z (Truth in Lending) and Regulation M (Consumer Leasing) requirements.

Based on the annual percentage increase in the CPI-W as of June 1, 2023, Regulation Z (Truth in Lending) and Regulation M (Consumer Leasing) generally will apply to consumer credit transactions and consumer leases of $69,500 or less in 2024. However, private education loans and loans secured by real property, such as mortgages, are subject to Regulation Z (Truth in Lending) regardless of the amount of the loan.

These changes have been posted to the BankersOnline Regulations pages.

On Thursday, the Federal Housing Administration (FHA) announced it has posted for industry feedback a proposed update to its Home Equity Conversion Mortgage (HECM) assignment claims eligibility policy. The proposal enables certain categories of due and payable HECMs that were previously ineligible for assignment to be assigned to HUD, enabling servicers to obtain earlier resolution of these loans through HUD’s assignment claims process. This change will support servicer liquidity and strengthen the HECM market for senior homeowners who use a HECM to age in place.

FHA is seeking industry feedback on its proposal through December 11, 2023.

The Small Business Administration has announced that small nonfarm businesses in Clallam, Grays Harbor, Island, Jefferson, Kitsap and Mason counties in the state of Washington are now eligible to apply for low‑interest federal disaster loans from the SBA. These loans offset economic losses because of reduced revenues caused by drought in Clallam and Jefferson counties that began September 12.

Small nonfarm businesses, small agricultural cooperatives, small businesses engaged in aquaculture and most private nonprofit organizations of any size may qualify for Economic Injury Disaster Loans of up to $2 million to help meet financial obligations and operating expenses which could have been met had the disaster not occurred. These loans have an interest rate of 4 percent for businesses and 2.375 percent for private nonprofit organizations, a maximum term of 30 years and are available to small businesses and most private nonprofits without the financial ability to offset the adverse impact without hardship. No interest accrues for the first year.

There is a notice on the Department of Defense's Military Lending Act (MLA) website indicating that the site is scheduled for system maintenance on Saturday, November 11, 2023, and will not be available from 6:00 p.m. until 9:00 p.m. PST (9:00 p.m. to midnight EST).

Our monthly review of the Federal Reserve's archive of CRA evaluations identified 10 evaluations of state-chartered member banks that were made public in October. Nine of the evaluations were rated Satisfactory. We congratulate Valley Bank of Ronan, Ronan, Montana, on its evaluation, which was rated Outstanding.

On Wednesday, the CFPB announced it has ordered Citibank, N.A. (Citi) to pay $25.9 million in fines and consumer redress for intentionally and illegally discriminating against credit card applicants the bank identified as Armenian American.

According to the CFPB's consent order, from 2015 through 2021, Citi singled out for discrimination applicants for certain credit card products, based on their surnames, whom it suspected of being of Armenian descent, in violation of the Equal Credit Opportunity Act, Regulation B, and the Consumer Financial Protection Act (CFPA). Citi supervisors conspired to hide the discrimination by instructing employees not to discuss the discriminatory practices in writing or on recorded phone lines. Citi employees also lied about the basis of denial, providing false reasons to denied applicants, also in violation of ECOA, Regulation B and the CFPA. Under Wednesday’s order, Citi will pay $1.4 million to harmed consumers along with a $24.5 million penalty.

The CFPB reported that Citi treated Armenian Americans as criminals who were likely to commit fraud. From at least 2015 through 2021, Citi targeted retail services credit card applicants with surnames that Citi employees associated with Armenian national origin as well as applicants in or around Glendale, California. The bank specifically targeted surnames ending in “-ian” and “-yan.” Nicknamed “Little Armenia,” Glendale is home to approximately 15% of the Armenian American population in the U.S.

The Bureau said that Citi managers trained and directed employees to take part in the bank’s plan to single out Armenian Americans applying for retail services credit cards because of stereotypes Citi projected onto an entire nationality.

The Federal Housing Finance Agency yesterday released its report on the FHLBank System at 100: Focusing on the Future initiative, the Agency’s comprehensive review of the Federal Home Loan Bank (FHLBank) System in anticipation of the System’s centennial in 2032.

The FHLBank System at 100: Focusing on the Future initiative featured robust public engagement over the course of the past year, including listening sessions and regional roundtables as well as multiple opportunities for written input from stakeholders. FHFA drew on the feedback received through this public engagement along with its own extensive analysis when preparing the report, which includes recommendations for how the FHLBank System could effectively fulfill its mission. FHFA expects the initiative to continue as a multi-year, collaborative effort with stakeholders to address the recommended actions in the report.

• The report
• Fact Sheet