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Top Story Lending Related


Fed Board announces prohibition orders

The Federal Reserve Board has announced two enforcement actions, each resulting in consent orders of prohibition.

  • A former employee of Regions Bank, Birmingham, Alabama, was prohibited from employment or any other affiliation with any depository institution after he was found guilty of having fraudulently withdrawn over $100,000 from bank customer accounts and used them to pay off a private mortgage held by another bank customer.
  • Two former employees of Evolve Bank & Trust, Memphis, Tennessee, were issued a prohibition order for engaging in unsafe and unsound practices while running a loan production office.


Boston Fed releases Main Street Lending Program info

The Federal Reserve Bank of Boston has released information, forms and an FAQ on its Main Street Lending Program, designed to support lending to small and medium-sized businesses that were in sound financial condition before the onset of the COVID-19 pandemic.

The Program, which the Boston Fed is administering on behalf of the Federal Reserve System, is expected to launch shortly. It will operate through three facilities: the Main Street New Loan Facility (MSNLF), the Main Street Priority Loan Facility (MSPLF), and the Main Street Expanded Loan Facility (MSELF). Links to instructions and all the forms lenders need to participate in the Program are included in the Boston Fed's press release.


OCC CRA evaluation schedule

The OCC has released its schedule of Community Reinvestment Act (CRA) evaluations to be conducted in the third and fourth quarters of 2020.


Fed releases discount rate meeting minutes

The Federal Reserve Board has released the minutes of its interest rate meeting on April 29, 2020. The Federal Open Market Committee (FOMC) and the Board decided to maintain the target range for the federal funds rate at 0 to 1/4 percent, effective April 30, 2020. Consistent with the FOMC's decision to leave the target range for the federal funds rate unchanged, the Board approved maintaining the interest rate (0.10 percent) paid on required and excess reserve balances, effective April 30, 2020. The Board also approved the establishment of the interest rate on discounts and advances made under the primary credit program (the primary credit rate) at the existing level (0.25 percent).


House prices up in first quarter

The Federal Housing Finance Agency has reported that U.S. house prices rose in the first quarter of 2020, up 1.7 percent according to the FHFA House Price Index (HPI). House prices rose 5.7 percent from the first quarter of 2019 to the first quarter of 2020. FHFA’s seasonally adjusted monthly index for March was up 0.1 percent from February.

  • House prices have risen for 35 consecutive quarters, or since September 2011.
  • House prices rose in 48 states and the District of Columbia between the first quarters of 2019 and 2020. The top five areas in annual appreciation were: 1) Idaho 12.6 percent; 2) Montana 10.2 percent; 3) Wyoming 9.9 percent; 4) Utah 9.0 percent; and 5) Hawaii 8.8 percent. The areas showing the lowest annual appreciation were: 1) West Virginia -2.1 percent; 2) Alaska -0.1 percent; 3) North Dakota 0.4 percent; 4) Illinois 2.5 percent; and 5) Connecticut 3.0 percent.
  • House prices rose in all the 100 largest metropolitan areas in the U.S. over the last four quarters. Annual price increases were greatest in Boise City, ID, where prices increased by 13.1 percent. Prices were weakest in Lake County-Kenosha County, IL-WI (MSAD), where they increased by 0.4 percent.
  • Of the nine census divisions, the Mountain division experienced the strongest four-quarter appreciation, posting an 8.0 percent gain between the first quarters of 2019 and 2020 and a 2.5 percent increase in the first quarter of 2020. Annual house price appreciation was weakest in the West South Central division, where prices rose by 4.3 percent between the first quarters of 2019 and 2020.

Trends in the Top 100 Metropolitan Statistical Areas are available through a newly-published interactive dashboard. The first tab displays rankings while the second tab offers charts.


Bureau issues NAL templates

On Friday, the CFPB announced that it issued two No-Action Letter (NAL) Templates under its innovation policies.

Using the first of those templates, which was requested by Brace Software, Inc., mortgage servicers seeking to assist struggling borrowers to avoid foreclosure and engage in loss mitigation efforts would be able to apply for their own NAL.

The second template, requested by the Bank Policy Institute (BPI), can be used by insured depository institutions to apply for a NAL covering their small-dollar credit products. The template includes important protections for consumers who seek small-dollar loan products.


Credit-repair telemarketers sued by CFPB and Massachusetts

The Consumer Financial Protection Bureau has announced it has jointly filed with Commonwealth of Massachusetts Attorney General Maura Healey a lawsuit against Commonwealth Equity Group, LLC, which does business as Key Credit Repair, and Nikitas Tsoukales (also known as Nikitas Tsoukalis), Key Credit Repair’s president and owner.

As alleged in the complaint, from 2016 through 2019 alone, Key Credit Repair enrolled nearly 40,000 consumers nationwide, and since 2011, it collected at least $23 million in fees from consumers. The Bureau alleges that the defendants, in their telemarketing of credit-repair services, violated the Consumer Financial Protection Act’s prohibition against deceptive acts or practices and the Telemarketing Sales Rule’s prohibitions on deceptive and abusive telemarketing acts or practices.


Payday lender scheme stopped

A payday lender who deceptively overcharging consumers millions of dollars and withdrawing money repeatedly from consumers’ bank accounts without their permission has been halted by the Federal Trade Commission. A federal court entered a temporary restraining order halting the operation and freezing the defendants’ assets, at the FTC’s request.

According to the FTC's complaint, the 11 defendants, through Internet websites and telemarketing, and operating under the names Harvest Moon Financial, Gentle Breeze Online, and Green Stream Lending, used deceptive marketing tactics to convince consumers that their loans would be repaid in a fixed number of payments. In fact, in many instances, the FTC alleges, consumers found that long after the promised number of payments had been made, the defendants had applied their funds to finance charges only and were continuing to make regular finance-charge only withdrawals from their checking accounts. In addition, the FTC charges that the defendants failed to make required loan disclosures, made recurring withdrawals from consumers’ bank accounts without proper authorization, and illegally used remotely created checks.


SBA adds rules on PPP forgiveness and lender duties

Late Friday, the Small Business Administration released two interim final rules to supplement previously published interim final rules implementing the Paycheck Protection Program (PPP), in preparation for the processing of applications for loan forgiveness under the CARES Act.

The first of Friday's rules was issued to provide borrowers and lenders guidance on requirements governing the forgiveness of PPP loans. The second rule informs borrowers and lenders of SBA’s process for reviewing PPP loan applications and loan forgiveness applications, and supplements the interim final rule on Loan Forgiveness.


SBA issues guidance on filing Form 1502

The Small Business Administration has issued a Procedural Notice on "Paycheck Protection Program Lender Processing Fee Payment and 1502 Reporting Process." Lenders must submit a Form 1502 report by the later of May 29 or 10 calendar days after final loan disbursement or cancellation.

  • Lenders will not be paid if the PPP loan is canceled before disbursement or if the loan was canceled or voluntarily terminated after funds were disbursed and repaid by May 18
  • The SBA will not pay processing fees for PPP loans canceled, terminated or repaid due to an SBA loan review finding the borrower ineligible
  • Lender processing fees may be clawed back within a year after disbursement if SBA later determines the borrower to be ineligible
  • Such a clawback for ineligibility will not affect the SBA guaranty for the loan, if the lender has complied with its obligations under section III.3.b of the initial PPP Interim Final Rule (What Do Lenders Have to Do in Terms of Loan Underwriting?)


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