Dodd-Frank News Center

CFPB releases support material for 2017 TILA-RESPA Rule

This story appeared in Bank Digest. 

In connection with its July 2017 final rule updating its "Know Before You Owe" mortgage disclosure rule, the Consumer Financial Protection Bureau has released support material to assist stakeholders in implementing the final rule. The CFPB's final rule, dubbed the "2017 TILA-RESPA Rule," modified the mortgage disclosure requirements under the Real Estate Settlement Procedures Act and the Truth in Lending Act that are implemented in Reg. Z.

The support material, entitled "2017 TILA-RESPA Rule: Detailed Summary of Changes and Clarifications," provides a comprehensive summary of the 2017 TILA-RESPA Rule, as well as examples of how to apply the final rule's provisions. The Bureau stressed that the support material "is not a substitute for reviewing the 2017 TILA-RESPA Rule" and that "the 2017 TILA-RESPA Rule is the definitive source regarding its requirements."

 

CFPB issues annual dollar amount adjustments under Reg. Z

This story appeared in Bank Digest.                                  

The Consumer Financial Protection Bureau is amending the official interpretations for Reg. Z, which implements the Truth in Lending Act, to revise the dollar amounts for provisions implementing TILA and amendments to TILA, including amendments under the Credit Card Accountability Responsibility and Disclosure Act of 2009, the Home Ownership and Equity Protection Act of 1994, and the Dodd-Frank Act. The Bureau is adjusting these amounts, where appropriate, based on the annual percentage change reflected in the Consumer Price Index in effect on June 1, 2017.                                  

The CFPB is required to calculate annually the dollar amounts for several provisions in Reg. Z. The final rule implementing the changes takes effect Jan. 1, 2018.

SIGTARP says state housing agencies unnecessarily charged $3M to Hardest Hit Fund

This story appeared in Bank Digest.                                  

The Office of the Special Inspector General for the Troubled Asset Relief Program has determined that state housing agencies have charged $3 million in unnecessary expenses to the Troubled Asset Relief Program's Hardest Hit Fund, which is intended as a temporary safety net to save the homes of unemployed or underemployed Americans and demolish blighted homes. SIGTARP said it conducted an audit that found that state agencies lumped unnecessary expenses into permitted expense categories, elevating the risk of fraud, waste, abuse, and overpayment throughout the program.                                  

According to Special Inspector General Christy Goldsmith Romero, "Congress did not authorize TARP dollars for barbeques, steak and seafood dinners, gift cards, flowers, gym memberships, employee bonuses, litigation, celebrations, cars, and other unnecessary expenses of state housing agencies, but those are some of the charges SIGTARP's forensic analysis uncovered.                                   

SIGTARP said these state agencies must pay back their "ill-gotten gains" for TARP and taxpayers to be made whole, and it recommended a series of controls to prevent future waste.

CFPB faults Amex over credit terms offered in Puerto Rico and U.S. territories

This story appeared in Bank Digest.                                  

The Consumer Financial Protection Bureau has filed an administrative action against American Express Centurion Bank and American Express Bank, FSB, for allegedly discriminating against consumers in Puerto Rico, the U.S. Virgin Islands, and other U.S. territories--namely, Guam, American Samoa, and Northern Mariana Islands--by providing them with credit and charge card terms that were inferior to those available in the 50 states.                                  

The CFPB also found that the banks discriminated against certain consumers with Spanish-language preferences. The two banks are subsidiaries of American Express Company and American Express Company's credit and charge card lines of business.                                  

American Express has already paid approximately $95 million in consumer redress during the course of the CFPB's review and American Express's own review, according to the Bureau. A consent order requires the two banks to pay at least another $1 million to fully compensate harmed consumers, among other provisions. The banks consented to the issuance of the consent order without admitting wrongdoing.

OIG issues white paper on Enterprises' capital requirements

This story appeared in Bank Digest.                                  

Because of what it described as heightened public interest in the potential role of Fannie Mae and Freddie Mac (the Enterprises) in the future structure of the housing finance system, the FHFA's Office of Inspector General has issued a white paper to explain the current statutory and regulatory capital requirements for the Enterprises under the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (suspended since the Enterprises entered conservatorship in September 2008), the Enterprises' reported capital shortfalls, and enhancements to capital requirements adopted by other financial regulators since 2008.                                   

The OIG said it takes no position on the structure a reformed housing finance system should take or whether Fannie Mae or Freddie Mac, in any form, should emerge from that reform effort. The white paper is intended only to inform the discussion.

CFPB releases new data on student debt among older borrowers

This story appeared in Bank Digest.                                  

As a follow-up to its January 2017 report entitled "Snapshot of older consumers and student loan debt," the Consumer Financial Protection Bureau has issued a report supplement providing additional data regarding the scope and growth of student debt among older borrowers (ages 60 and older) in each of the 50 states, Puerto Rico, and the District of Columbia. According to the report supplement, the "new data further demonstrate the significant growth of student debt among the older population in each state, Puerto Rico, and the District of Columbia, and the proportion of older borrowers struggling to make their payments."                                  

The supplement said the state-level data show the changes between 2012 and 2017 in the number of older borrowers, the median amount owed, and the proportion and number of older borrowers in delinquency.

FHFA modifies streamlined refinance program, extends HARP

This story appeared in Bank Digest

The Federal Housing Finance Agency has announced modifications to the streamlined refinance program for borrowers with high loan-to-value (LTV) ratios. In August 2016, FHFA announced that Fannie Mae and Freddie Mac (the Enterprises) would implement a High LTV Streamlined Refinance program to provide much-needed liquidity for borrowers who are current on their mortgage but are unable to refinance because their loans have LTV ratios that exceed the Enterprises' maximum limits. In order to preserve the objectives of the Enterprises' credit risk transfer program, FHFA is establishing an eligibility date which makes the program available for loans originated on or after Oct. 1, 2017. In addition, to ensure that high LTV borrowers who are eligible for HARP continue to have a refinance option, FHFA is also directing the Enterprises to extend the Home Affordable Refinance Program through Dec. 31, 2018.

Second Quarter 2017 Refinance Report filed

This story appeared in Bank Digest

The Federal Housing Finance Agency has released its Second Quarter 2017 Refinance Report, which shows that more than 356,000 refinances were completed in the second quarter of 2017, compared with approximately 510,000 in the first quarter. FHFA reported that nearly 9,700 homeowners refinanced their mortgages in the second quarter through the HARP program, bringing the total number of HARP refinances to almost 3.5 million since inception of the program in 2009.

CFPB report advances financial coaching

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau has published a report that summarizes the lessons learned from the 2017 Financial Coaching Symposium held in April of this year and outlines the next steps needed to raise the level of financial coaching. The symposium brought together financial coaches and researchers to discuss ways to improve financial coaching services and better help clients identify and reach personal financial goals. The Bureau's report highlights key conversations on strategies intended to boost the financial coaching field. According to a Bureau blog post, research indicates that financial coaching services improve financial well-being for clients. Financial coaching can lead to increased deposits, savings, and credit scores for consumers, decreased debt, and lower overall financial stress.

Bureau charges Aequitas with enabling Corinthian's predatory lending

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau has filed a complaint and proposed settlement against private equity firm Aequitas Capital Management, Inc., and its related entities for allegedly aiding the Corinthian Colleges' predatory lending scheme by enabling Corinthian to make high-cost private loans to Corinthian students. Specifically, the Bureau alleges that Aequitas and Corinthian plotted to make it seem as if the school was getting outside revenue in the form of private loans, when in reality Corinthian was paying Aequitas to support the loan program. If the proposed settlement is approved, approximately 41,000 Corinthian students could be eligible for $183.3 million in loan forgiveness and reduction. In collaboration with the CFPB, several state attorneys general have also reached proposed settlements with Aequitas.

"Tens of thousands of Corinthian students were harmed by the predatory lending scheme funded by Aequitas, turning dreams of higher education into a nightmare," said CFPB Director Richard Cordray. "Today's action marks another step by the Bureau to bring justice and relief to the borrowers still saddled with expensive student loan debt. We will continue to address the illegal lending practices of for-profit colleges and those who enable them."