Top Story Lending Related

The FDIC has released its October list of banks examined for CRA Compliance.. Six of the 59 banks received "outstanding" ratings, 52 were rated "satisfactory," and one was assigned a "needs improvement" rating.

The CFPB has announced it has approved a final rule to establish regulations at 12 CFR part 1041 (Regulation OO?) titled "Payday, Vehicle Title, and Certain High-Cost Installment Loans." The rule, which will be effective 21 months after publication in the Federal Register, applies to two types of covered loans (with several exceptions):

• Short-term loans with terms of 45 days or less, including typical 14-day and 30-day payday loans, short-term vehicle title loans usually made for 30-day terms, and longer-term balloon-payment loans. These loans will be subject to underwriting requirements.
• Longer-term loans with terms of more than 45 days, with both a cost of credit exceeding 36 percent per year and a form of "leveraged payment mechnism" giving the lender a right to withdraw payments from the consumer's account.

Both types of covered loans will be subject to restrictions on multiple attempts to withdraw payments from a consumer's account without the consumer's new and specific authorization, and subject to requirements for advance notice of some such attempts. The rule also provides for the establishment of "registered information systems" (special-purpose credit reporting agencies) to which information about covered loans will be furnished, and from which lenders will obtain information to be used in underwriting of certain short-term loans.

• Text of CFPB final rule on payday loans
• Factsheet summarizing the rule

The CFPB has posted an article, "eClosing and buying a home: Technology's role in closing on a mortgage," reporting on the Bureau's investigations into the potential for electronic mortgage closings — eClosings — to help reduce the paperwork, questions and stress involved on these significant consumer events. The article compared the obstacles to eClosings reported by the Bureau in 2014 with an assessment of the progress made since then in responding to those challenges and providing more digital solutions.

The Community Reinvestment Act compliance evaluation performance ratings received by 31 national banks and federal saving associations have been released by the OCC. The evaluations, which were made public in September, included four "outstanding" ratings, 26 "satisfactory" ratings, and one "needs to improve."

With less than two weeks to go before implementation (if taking advantage of the Bureau's guidance suggesting that implementation three days early is a good idea), the CFPB has announced an interim final rule tweaking one of the early intervention (§ 1024.39 of Regulation X) changes effective October 19. The change only affects servicers who are subject to the Fair Debt Collection Practices Act with respect to mortgage loans on which consumers have invoked their cease communication rights, and it provides a 10-day window for delivery of a modified written early intervention notice under certain specific situations. The interim rule, which has been posted to BOL's Regulations pages for Regulation X, is effective October 19. Comments on the interim rule are due within 30 days of Federal Register publication.

The Bureau also announced a proposed rule that would amend new § 1026.41(e)(5) to adjust the timing requirement for the transition to and from modified periodic statements or coupon books in connection with a consumer's bankruptcy case, in order to alleviate unintended challenges in implementation. Comments on the proposal will be accepted for 30 days following publication in the Federal Register. Any final rule will be effective April 19, 2018.

• Interim final rule amending § 1024.39(d)(3)(iii) of Regulation X
• Proposed rule to amend § 1026.41(e)(5) if Regulation Z

UPDATE: The INTERIM FINAL RULE was published [82 FR 47953] in the Federal Register on October 16, 2017, with comments due by November 15, 2017.
UPDATE: The PROPOSED RULE was published [82 FR 48463] in the Federal Register on October 18, 2017, with a 30-day comment period ending November 17, 2017.

The Conference of State Bank Supervisors has announced an upgrade to its NMLS Resource Center, Federal Registry, NMLS Help Links, and URL Manager websites to strengthen security posture by expanding the use of https across the sites. As a result, depending on browser configurations, users may need to hold the Ctrl button on their keyboard while clicking a link.  This will open the page in a new tab within the browser.

A CFPB Blog article provides information for consumers on how mortgage interest rates are determined and how to better prepare for the home buying process and negotiating their mortgage loan. Seven key factors which affect an interest rate are discussed.

The OCC has released its Second Quarter 2017 Mortgage Metrics Report, which showed 95.4 percent of mortgages included in the report were current and performing at the end of the quarter, compared with 94.7 percent a year earlier. The report also showed that foreclosure activity has decreased from the previous quarter. Reporting servicers initiated 35,974 new foreclosures during the second quarter of 2017, a 24.3 percent decrease from the previous quarter and a decrease of 26.2 percent from a year earlier. Servicers implemented 30,523 mortgage modifications in the second quarter of 2017. Eighty-three percent of the modifications reduced borrowers’ monthly payments.

The September 2017 Report to the Congress on the Availability of Credit to Small Businesses report has been submitted by the Board of Governors of the Federal Reserve System. The report is prepared in accordance with provisions of the Economic Growth and Regulatory Paperwork Reduction Act of 1996, which requires that, every five years, the Board submit a report to the Congress detailing the extent of small business lending by all creditors. The report discusses recent patterns in the flows and terms of business credit, credit use by small firms, and the sources of credit provided to small businesses, with an emphasis on the lending activities of commercial banks. The securitization of small business loans and community reinvestment activities are also discussed.

The FDIC has released a list of orders of administrative enforcement actions taken against banks and individuals in August 2017. There were a total of 22 orders, four notices, including one notice issued in May, and one adjudicated decision. The administrative enforcement actions in those orders consisted of two consent orders; three removal and prohibition orders; seven Section 19 orders; one civil money penalty; one termination of insurance; eight terminations of consent orders; four notices; and one adjudicated decision.

Under the adjudicated decision, the FDIC Board issued an order removing a board member and former president of an Amarillo, Texas, bank, prohibiting him from participation in the banking industry, and assessing a $200,000 civil money penalty for violations of Regulation O, engaging in unsafe and unsound banking practices, and breaching his fiduciary duties. See our Penalty page for details. There was also an order assessing a $21,000 penalty against a California bank for engaging in a pattern or practice of violations of flood insurance requirements. The three removal/prohibition orders were issued against individuals formerly affiliated with banks in Fort Walton Beach, Florida, Medota, Illinois, and Fort Pierce, Florida.

Notices of charges and hearing are preliminary notices of penalties for which the respondent individual or bank has a right to request a hearing before an Administrative Law Judge. The May 2017 notice was issued to a Louisiana bank alleged to have engaged in an extensive pattern or practice of flood insurance-related violations. The three notices issued in August involve pending removal/prohibition orders issued against two individuals affiliated with a Laredo, Texas, bank, and one individual affiliated with a bank in Everett, Massachusetts.