Top Story Lending Related

The CFPB announced Thursday it has filed a complaint and proposed settlement against Aequitas Capital Management, Inc. and related entities, for aiding the Corinthian Colleges’ predatory lending scheme. The CFPB alleges that Aequitas enabled Corinthian to make high-cost private loans to Corinthian students so that it would seem as if the school was making enough outside revenue to meet the requirements for receiving federal student aid dollars. The risky loans saddled students with high-priced debt that both Aequitas and Corinthian knew students could not afford. Under the CFPB’s proposed settlement, if approved, about 41,000 Corinthian students could be eligible for approximately $183.3 million in loan forgiveness and reduction. In collaboration with the CFPB, several state attorneys general have also reached proposed settlements with Aequitas.

The Bureau reports that, on March 10, 2016, the Securities and Exchange Commission took action against Aequitas, alleging they had defrauded more than 1,500 investors. A receiver was appointed to wind down Aequitas and distribute its remaining assets.

The NCUA has invited credit union stakeholders to read and comment on a package of regulatory reforms recommended by an internal agency task force. The task force has recommended changes that would be adopted in the coming four years to clarify, improve, revise, or eliminate regulations. The NCUA Board approved posting the proposal in the Federal Register for a 90-day comment period.

UPDATE: Scheduled for publication on 8/22/2017. Comments will be due by 11/20/2017.

HUD and the Census Bureau announced yesterday statistics on new residential construction during July 2017:

• Building Permits: Privately owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 1,223,000. This is 4.1 percent below the revised June rate of 1,275,000 and 4.1 percent above the July 2016 rate of 1,175,000.
• Housing Starts: Privately owned housing starts in July were at a seasonally adjusted annual rate of 1,155,000, 4.8 percent below the revised June estimate of 1,213,000 and 5.6 percent below the July 2016 rate of 1,223,000.
• Housing Completions: Privately owned housing completions in July were at a seasonally adjusted annual rate of 1,175,000, 6.2 percent below the revised June estimate of 1,252,000 and 8.2 percent above the July 2016 rate of 1,086,000.

August results are scheduled to be reported on September 19.

The CFPB has announced the release of a new "CFPB data point" report on "Student loan repayment."Among the findings reported—

• More than 40 percent of student loan borrowers leave school owing $20,000 or more, more than double the percentage in 2002.
• 30 percent of borrowers are not paying down their loan balances after five years in repayment, up from 16 percent in 2008
• More than 60 percent of borrowers not reducing their balances are delinquent

A related Bureau Blog article explains that many student loan borrowers are not using affordable repayment plans such as Income-Driven Repayment (IDR) plans, in many cases because they are not being informed about their availability.

The Bureau press release also reports that employers, state governments and others have sought new ways to assist in managing student loan debt. The report features a series of recommendations to student loan servicers, policymakers, and administrators of student loan repayment programs.

The Small Business Administration has published at 82 FR 38617 in today's Federal Register a request for public comment identifying which of the Agency's regulations should be repealed, replaced or modified because they are obsolete, unnecessary, ineffective, or burdensome, in accordance with the mandate in various Executive Orders to reduce the number and costs of the regulations that federal agencies impose on the public. Comments are due by October 16, 2017.

UPDATE: On October 13, 2017, the SBA published a notice extending the comment deadline to 11/15/2017.

The CFPB published its previously announced TRID rule amendments at 82 FR 37656 in today's Federal Register. The amendments will be effective October 10, 2017, with compliance required by October 1, 2018, as to loans for which applications are received on or after October 1, 2018 (except for two provisions that will apply to all loans regardless of when applied for).

The Bureau also published, at 82 FR 37794, its proposed rule relating to when a creditor may compare charges paid by or imposed on the consumer to amounts disclosed on a Closing Disclosure or corrected Closing Disclosure, instead of a Loan Estimate, to determine if an estimated closing cost was disclosed in good faith. Comments on the proposal will be accepted through October 10, 2017.

The Federal Reserve System has posted G.19 Consumer Credit data for the month of June and the second quarter of 2017. Consumer credit increased at a seasonally adjusted annual rate of 4-1/2 percent during the second quarter. Both revolving and nonrevolving credit increased at similar annual rates. In June, consumer credit increased at an annual rate of 4 percent.

The Federal Housing Finance Agency (FHFA) has released a report providing the results of the annual stress tests Fannie Mae and Freddie Mac (the Enterprises) are required to conduct under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). The report, Dodd-Frank Act Stress Tests – Severely Adverse Scenario, provides updated information on possible ranges of future financial results of the Enterprises under severely adverse economic conditions.

The Federal Housing Finance Agency (FHFA) has reopened and extended the input period to September 1, 2017, to allow interested parties more time to consider additional information on issues facing qualified mortgage borrowers with Limited English Proficiency (LEP) throughout the mortgage life cycle process, including mortgage lending and servicing.

FHFA announced on May 25, 2017 that it was requesting input on ways to improve access to credit for qualified mortgage borrowers with limited English proficiency. The input period closed on July 31, 2017 but is being reopened and extended beginning today.

The FDIC has released a list of state nonmember banks recently evaluated for compliance with the Community Reinvestment Act (CRA). The list covers evaluation ratings that the FDIC assigned to institutions in May 2017. Of the 68 institutions listed, four received an "outstanding" rating, 62 received a "satisfactory" rating, and two were rated "needs improvement."