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11/05/2019

Small business access to capital discussed in Federal Reserve series

The November 4, 2019, issue of the Federal Reserve Board's Consumer & Community Context covers the topic of small businesses' access to capital, and includes articles on experiences of small business owners when searching for financing online, disparities in small business credit approval by race and ethnicity, and small businesses' access to financial services in low- and moderate-income communities.

11/05/2019

Calabria calls for reform of mortgage finance system

In prepared remarks issued at yesterday’s Structured Finance Association Residential Mortgage Finance Symposium in New York City, FHFA Director Dr. Mark A. Calabria called for the reform of the mortgage finance system. He stated, “Today’s mortgage finance system poses significant risk not only to taxpayers, but also to borrowers, renters, homeowners, and our entire financial system. Yet, since 2008, mortgage finance reform has received much discussion but very little action.” He discussed the new Strategic Plan and Scorecard released in September by the Treasury and HUD which has the following objectives:

  • Focus on their mission of fostering competitive, liquid, efficient, and resilient national housing finance markets.
  • Operate in a safe and sound manner appropriate for entities in conservatorship.
  • Prepare for their eventual exits from the conservatorships.

Calabria noted the new Strategic Plan and Scorecard are also focused on preparing for the transition from LIBOR to alternative reference rates.

11/05/2019

FHFA asks for input on Fannie and Freddie pooling

The Federal Housing Finance Agency (FHFA) has issued a Request for Input about Fannie Mae’s and Freddie Mac’s (the Enterprises’) pooling practices for the formation of To-Be-Announced-eligible Uniform Mortgage-Backed Securities (UMBS). FHFA is also seeking public input about other policies and practices that might affect UMBS fungibility, including the Enterprises’ oversight of UMBS prepayment speeds and alignment.

11/04/2019

OCC CRA evaluations

The OCC has released a list of Community Reinvestment Act (CRA) performance evaluations that became public in October. Of the 37 institutions listed, 28 were rated satisfactory, one was rated need to improve, and these eight bank were rated outstanding (links are to their evaluation reports):

11/04/2019

NMLS annual review period underway

The NMLS Annual Renewal Period began on November 1 and ends on December 31. According to federal regulations, both institutions and most individual mortgage loan originators (MLOs) must be renewed through NMLS annually. If the renewal process is not completed prior to December 31st, the MLO is placed in an “Inactive” registration status both on NMLS and NMLS Consumer Access. Inactive registrations must be reactivated in order to have an “active” registration status. NMLS requires a $30 processing fee for each MLO seeking to renew or reactivate a registration. MLOs who are submitted for renewal but did not complete renewal attestation prior to December 31 need to be reactivated, incurring an additional $30 processing fee at the time of reactivation.

11/01/2019

Free credit monitoring for some members of the military

The FTC has reported that, starting October 31, many members of the military will have access to free electronic credit monitoring to help them spot identify theft. The nationwide credit reporting agencies—Equifax, Experian, and TransUnion—are providing free electronic credit monitoring services to some active duty service members who are assigned to service away from their usual duty station and all active duty National Guard members. Credit monitoring services can alert consumers to mistakes or problems with their credit reports that might stem from the unauthorized use of their personal information to obtain credit.

There is a limitation on coverage for active duty service members to those assigned to service away from their usual duty stations, due to the wording of the Fair Credit Reporting Act amendments made by the 2018 Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA). That limitation was not applied in the EGRRCPA amendments to National Guard members.

11/01/2019

Discount rate decreased

The Federal Reserve Board approved actions yesterday by the Boards of Directors of the Federal Reserve Banks of Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Kansas City, and Dallas decreasing the discount rate (the primary credit rate) at the Banks from 2-1/2 percent to 2-1/4 percent, effective immediately.

10/31/2019

Bogus student loan debt relief operation stopped

The CFPB, the Minnesota Attorney General’s Office, the North Carolina Department of Justice, and the Los Angeles City Attorney have announced the filing of a complaint to halt a student-loan debt-relief operation engaged in allegedly unlawful conduct and consisting of several related companies— Consumer Advocacy Center Inc., which does business as Premier Student Loan Center; True Count Staffing Inc., also known as SL Account Management; and Prime Consulting LLC, which is known as Financial Preparation Services. Defendants also include Albert Kim, Kaine Wen, and Tuong Nguyen, who the complaint alleges substantially assisted the student-loan debt-relief companies. It also alleges that since at least 2015, the debt-relief companies operated as a common enterprise and deceived thousands of federal-student-loan borrowers and charged over $71 million in unlawful advance fees in connection with the marketing and sale of student-loan debt-relief services to consumers.

The Bureau also alleges that the defendants engaged in deceptive practices by misrepresenting: the purpose and application of fees charged by the companies, their ability to obtain loan forgiveness, and their ability to lower consumers’ monthly payments. The Bureau also alleges that the defendants failed to inform consumers that the companies automatically request that consumers’ loans be placed in forbearance so that consumers can better afford the companies’ significant fees and that the companies submit false information to student-loan servicers in loan-adjustment applications in an effort to qualify consumers for lower monthly payments.

The court granted a temporary restraining order and scheduled a hearing for November 4 on the Bureau's request for a preliminary injunction. The complaint seeks an injunction against defendants, as well as damages, redress to consumers, disgorgement of ill-gotten gains, and the imposition of civil money penalties. The complaint also names several defendants in order to obtain relief, and seeks disgorgement of those relief defendants’ ill-gotten gains.

10/31/2019

NCUA webinar registration open

The NCUA has announced that registration for its “Fair Lending and Consumer Compliance Regulatory Update” on November 19 is now open. The webinar is scheduled to begin at 2 p.m. EST and run approximately 90 minutes. Participants will be able to log into the webinar and view it on their computers or mobile devices using the registration link. Subjects to be covered include:

  • The agency’s new payday alternative loan (PALs II) rule
  • Findings from reviews of Home Mortgage Disclosure Act loan and application registers;
  • Regulation B adverse action notices; and
  • Elder financial abuse.

10/30/2019

Bureau revises threshold amounts for 2020

The CFPB has published final rules in this morning's Federal Register adjusting exemptions thresholds in Regulations Z and M for the year 2020.

  • [84 FR 58013] Comment 35(c)(2)(ii)-3.vii will be added to the Official Interpretations of § 1026.35 of Regulation Z to increase the threshold amount to $27,200 for the exemption from the special appraisal requirements for higher-priced mortgage loans.
  • [84 FR 58020] Comment 3(b)-3.xi will be added to the Official Interpretations of § 1026.3 of Regulation Z to increase the threshold amount to $58,300 for exempt consumer credit transactions (except for (1) those secured by real property or by personal property use or expected to be used as the principal dwelling of a consumer and (2) private education loans)
  • [84 FR 58017] Comment 2(e)-11.xii will be added to the Official Interpretations of § 1013.2 of Regulation M to increase the threshold amount to $58,300 for exempt consumer leases.

The BankersOnline Regulations pages for Regulations Z and M have been updated to include these changes.

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