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Top Story Lending Related

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.

11/03/2020

OCC CRA evaluations released

The OCC has released a list of Community Reinvestment Act (CRA) performance evaluations that became public in October (links are to the evaluation reports):

Of the 22 evaluations listed, 16 were rated satisfactory. We congratulate the six banks whose evaluations were rated outstanding:

11/02/2020

FDIC September enforcement orders

The FDIC has issued a list of enforcement orders issued in September, 2020.

  • Banks in Sauk City ($18,500) and Berlin ($15,375), Wisconsin, paid civil money penalties for flood insurance violations
  • The former president of Enloe State Bank, Cooper, Texas (now in receivership) was issued a prohibition order, after an FDIC finding that she originated a significant number of fictitious loans from which she benefited and that led to the bank's financial losses.
  • A former branch manager for First Community Bank, Batesville, Arkansas, was issued a prohibition order after an FDIC finding that she had made unauthorized and fraudulent withdrawals from bank customers' certificate of deposit accounts, from which she received financial gain or other benefit.
  • A former commercial lender for Synovus Bank, Columbus, Georgia, was issued a prohibition order for misappropriation of funds through the creation of a fictitious line of credit, and unauthorized draws from a customer's line of credit and from another customer's account.

11/02/2020

Fed adjusts Main Street Lending Program terms

The Federal Reserve Board has adjusted the terms of the Main Street Lending Program in two ways to better target support to smaller businesses that employ millions of workers and are facing continued revenue shortfalls due to the pandemic. the minimum loan size for three Main Street facilities available to for-profit and non-profit borrowers has been reduced from $250,000 to $100,000 and the fees have been adjusted to encourage the provision of these smaller loans. The Board and Department of the Treasury also issued a new frequently asked question clarifying that Paycheck Protection Program loans of up to $2 million may be excluded for purposes of determining the maximum loan size under the Main Street Lending Program, if certain requirements are met, which should also help smaller businesses access Main Street loans.

Current loan term sheets:

11/02/2020

NMLS annual renewal period has begun

​The annual renewal period for mortgage loan originators' registrations for 2021 began yesterday, November 1, 2020, and ends Tuesday, December 31, 2020. The NMLS Call Center operates Monday through Friday 9:00 a.m. to 9:00 p.m. ET. For complete information, see the NMLS Annual Renewal Information page.

11/02/2020

Bureau issues FDCPA rule

The CFPB has issued a final rule [653-page PDF] to restate and clarify prohibitions on harassment and abuse, false or misleading representations, and unfair practices by debt collectors when collecting consumer debt. The rule focuses on debt collection communications and gives consumers more control over how often and through what means debt collectors can communicate with them regarding their debts. The rule also clarifies how the protections of the Fair Debt Collection Practices Act apply to newer communication technologies, such as email and text messages.

The rule—

  • establishes a presumption on the number of calls debt collectors may place to reach consumers on a weekly basis. A debt collector is presumed to violate federal law if the debt collector places telephone calls to a particular person in connection with the collection of a particular debt more than seven times within seven consecutive days or within seven consecutive days of having had a telephone conversation about the debt.
  • clarifies how consumers may set limits on debt collection communications to reflect their preferences and the limits on communicating with third parties about a consumer’s debt
  • requires debt collectors who communicate electronically to offer the consumer a reasonable and simple method to opt out of such communications at a specific email address or telephone number
  • provides that consumers may, if the debt collector communicates through a medium of electronic communications, use that medium of electronic communications to place a cease communication request or notify the debt collector that they refuse to pay the debt
  • clarifies that the FDCPA’s general prohibition on harassing, oppressive, or abusive conduct applies to telephone calls as well as other communication media, such as email and text messages
  • provides examples demonstrating how the prohibition restricts emails and text messages
  • generally restates the FDCPA’s prohibitions regarding false, deceptive, or misleading representations or means and unfair or unconscionable means

The final rule does contain provisions on disputes, and record retention, among other topics. It does not include a proposed safe harbor for debt collectors against claims that an attorney falsely represented the attorney’s involvement in the preparation of a litigation submission. The Bureau intends to issue a second debt collection final rule focused on consumer disclosures and collection of time-barred debts in December 2020.

The rule, which is a complete revision and restatement of Bureau Regulation F (12 CFR Part 1006), will become effective one year after it is published in the Federal Register.

10/30/2020

FEMA to change notification method for community status

FEMA has published a final rule [85 FR 68782] in today's Federal Register modernizing regulations regarding publication requirements of community eligibility status information under the National Flood Insurance Program (NFIP). FEMA is replacing outdated regulations that require publication of community loss of eligibility notices in the Federal Register with a requirement that FEMA publish this information on the internet or by another comparable method. FEMA is also replacing its requirement that the agency maintain a list of communities eligible for flood insurance in the Code of Federal Regulations with a requirement that FEMA publish this list on the internet or by another comparable method.

FEMA will post community suspension notices in the Community Status Book (CSB) area of its website for a minimum of one year after they are issued, and update the CSB regularly to reflect current community status information. Affected communities will continue to receive the 90-day and 30-day letters they have always received during the suspension process.

The rule will be effective December 2, 2020.

10/29/2020

CFPB Ombudsman 2020 Annual Report

The 2020 Annual Report of the CFPB Private Education Loan Ombudsman has been issued. It shows that from September 1, 2019, through August 31, 2020, the Bureau handled approximately 7,000 complaints related to private or federal student loans. That is an overall decrease from last year and continues a trend from 2017. More specifically, for the 12 months ending August 31, 2020, the Bureau handled approximately 1,900 private student loan complaints, a decrease of approximately 33 percent compared to that of the previous year, and approximately 5,000 federal student loan complaints, a decrease of approximately 24 percent compared to that of the previous 12 months.

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