Dodd-Frank News Center

CFPB blog post discusses reports assessing ability-to-repay, mortgage servicing rules

This story appeared in Bank Digest.                                     

A Consumer Financial Protection Bureau blog post discusses two reports assessing significant CFPB rules--one assessing the effectiveness of the Bureau's Ability-to-Repay and Qualified Mortgage Rule and another assessing the effectiveness of the Mortgage Servicing Rule issued under the Real Estate Settlement Procedures Act. Both rules were issued in January 2013 and took effect in January 2014.

According to the post, the Ability-to-Repay and Qualified Mortgage Rule was issued to implement provisions of the Dodd-Frank Act requiring lenders, before entering into a residential mortgage loan, "to make a reasonable and good faith determination that the consumer has a reasonable ability to repay the loan."

The RESPA Mortgage Servicing Rule was issued "to implement certain provisions of the Dodd-Frank Act imposing new obligations on mortgage servicers," and it "also added new protections, which the Bureau deemed appropriate or necessary to carry out the consumer protection purposes of RESPA."

Democrats request that CFPB resume supervisory role over MLA

This story appeared in Bank Digest.                                   

House Financial Services Committee Ranking Member Maxine Waters (D-Calif), committee member Denny Heck (D-Wash), and 21 other committee Democrats have sent a letter to Consumer Financial Protection Bureau Director Kathy Kraninger urging her to recommit the Bureau to fulfilling its supervisory role over consumer protection laws, including the Military Lending Act, which the representatives said provides protections for active-duty servicemembers and their families from predatory loans and credit gouging.

In their letter, the representatives expressed their "deep concerns that the Consumer Bureau has recently decided to cease supervising its regulated entities for compliance with the Military Lending Act ("MLA"), a failure to fulfill its responsibility under the law and which is nothing less than a dereliction of duty. We write to seek your written commitment that you will promptly ensure that the Consumer Bureau fulfills its explicit statutory purpose and mandates by resuming a consistent supervisory role over consumer protection laws, including the MLA, for the most robust and efficient protection of servicemembers and their families."

CFPB issues 'Fair Lending Report'

This story appeared in Bank Digest.                                     

The Consumer Financial Protection Bureau has issued its "Fair Lending Report of the Bureau of Consumer Financial Protection," which "describes the Bureau's fair lending activities for 2017, consistent with its statutory mandate to ensure that consumers are protected from discrimination," according to an introductory message from CFPB Acting Director Mick Mulvaney.

The report, from the Bureau's Office of Fair Lending and Equal Opportunity, is intended to fulfill the Dodd-Frank Act's requirement that the Bureau file an annual report to Congress describing the administration of its functions under the Equal Credit Opportunity Act, summarizing public enforcement actions taken by other agencies with administrative enforcement responsibilities under ECOA, and providing an assessment of the extent to which compliance with ECOA has been achieved. The act also requires the Bureau, in consultation with the Department of Housing and Urban Development, to report annually on the utility of the Home Mortgage Disclosure Act's requirement that covered lenders itemize certain mortgage loan data.

According to a related Bureau blog post by Patrice Ficklin, the director of the Office of Fair Lending and Equal Opportunity, the report "highlights how in 2017 we continued to focus on promoting fair, equitable, and nondiscriminatory access to credit in mortgage lending, continued fair lending supervision of servicing and small business lending, and embarked on new efforts to encourage innovation in expanding credit access."

CFPB and FHFA release dataset on borrowers' mortgage experiences

This story appeared in Bank Digest.                                   

The Consumer Financial Protection Bureau and Federal Housing Finance Agency have released for public use a new loan-level dataset collected through the National Survey of Mortgage Originations that provides insights into borrowers' experiences in getting a residential mortgage. According to the CFPB's press release, the NSMO is a component of the National Mortgage Database, launched by the Bureau and FHFA in 2012, which is the first comprehensive repository of detailed mortgage loan information designed to support policymaking and research efforts and to help regulators better understand emerging mortgage and housing market trends. 

According to FHFA Deputy Director Sandra Thompson, "The goal of the survey is to obtain information to help improve lending practices and the mortgage process for future borrowers." CFPB Acting Director Mick Mulvaney said the data collected through the survey "will allow greater transparency, accountability, and effectiveness around borrowers' mortgage experiences."

Fed proposes repealing S.A.F.E. Act provisions

This story appeared in Bank Digest.     

The Federal Reserve Board is proposing to amend Regulation H (Membership of State Banking Institutions in the Federal Reserve System) and Regulation K (International Banking Operations) to repeal provisions that incorporate the Secure and Fair Enforcement for Mortgage Licensing Act (S.A.F.E. Act). According to a press release, the proposal reflects the transferal of the Fed's rulemaking authority for the S.A.F.E. Act to the Consumer Financial Protection Bureau by the Dodd-Frank Act. Comments on the proposed rule must be received by Nov. 26, 2018.

CFPB updates FCRA model disclosures

This story appeared in Bank Digest.                                     

The Consumer Financial Protection Bureau has issued an interim final rule updating two model disclosures to reflect changes made to the Fair Credit Reporting Act by the Economic Growth, Regulatory Relief, and Consumer Protection Act. The Act requires nationwide consumer reporting agencies to provide national security freezes free of charge to consumers. The Act also requires that whenever the FCRA requires a consumer to receive either the Summary of Consumer Rights or the Summary of Consumer Identity Theft Rights, a notice regarding the new security freeze right also must be included. 

The FCRA requires the Bureau to write model forms of these documents, and the Bureau's interim final rule updates its model forms to incorporate the new required notice. The updated model forms also incorporate a requirement of the EGRRCPA that extends from 90 days to one year the minimum time that nationwide consumer reporting agencies must include an initial fraud alert in a consumer's file. 

The interim final rule is effective Sept. 21, 2018, and comments must be received within 60 days of its publication in the Federal Register.

GAO report assesses effects of regulation on community banks, small business lending

This story appeared in Bank Digest.                                     

The Government Accountability Office has issued a report assessing the effects of regulatory changes since 2010 on community banks and small business lending. The GAO's analysis found that the regulatory environment likely had a generally modest effect on various aspects of community banks and their small business lending since 2010, although the report said the data banks report to regulators have characteristics that make it difficult to determine how community banks' small business lending changed during this period. Specifically, according to the GAO, the data community banks report to regulators do not accurately capture lending to small businesses because the data exclude some loans to small businesses and could include small loans to large businesses. 

The GAO made three recommendations to banking regulators to reevaluate and modify, as needed, the data they collect to measure small business lending.

CFPB issues rule to clarify HMDA amendments

This story appeared in Bank Digest. 

The Consumer Financial Protection Bureau has issued an interpretive and procedural rule to implement and clarify the requirements of Sec. 104(a) of the Economic Growth, Regulatory Relief, and Consumer Protection Act, which amended the Home Mortgage Disclosure Act. The EGRRCPA contains provisions intended to decrease the burden smaller depository institutions face in complying with HMDA and its implementing regulation, Reg. C. The Bureau anticipates that at a later date it will initiate a notice-and-comment rulemaking to incorporate these interpretations and procedures into Reg. C and further implement the EGRRCPA. The Bureau has also released updates to the Filing Instructions Guide for HMDA data collected in 2018 to incorporate the EGRRCPA as implemented and clarified by the rule., which is effective upon publication in the Federal Register.

House passes resolution rescinding CFPB auto lending guidance

This story appeared in Bank Digest.                                     

The House of Representatives has passed S.J. Res. 57, which uses Congressional Review Act authority to repeal the Consumer Financial Protection Bureau's 2013 indirect auto lending guidance, by a vote of 234 to 175. The resolution previously passed the Senate on April 18, 2018. 

In a prepared statement on the House floor, House Financial Services Committee Chairman Jeb Hensarling (R-Texas) supported the resolution, saying the CFPB's guidance "essentially outlawed the practice of auto dealers in America being able to take wholesale financing from third parties and charge retail rates." But in her prepared floor statement, Committee Ranking Member Maxine Waters (D-Calif) said the resolution was "an inappropriate and misguided use of the Congressional Review Act that sets a dangerous precedent," adding that the CFPB's guidance "was issued to provide clarity to indirect auto lenders and protect auto loan borrowers from discrimination." 

House Speaker Paul Ryan (R-Wis) issued a statement after the vote saying it "will bring change and make things easier for consumers and businesses alike within the auto lending marketplace." 

FHFA issues report on Enterprises' non-performing loan sales

This story appeared in Bank Digest.                                   

The Federal Housing Finance Agency has released its "Enterprise Non-Performing Loan Sales Report," which provides information on sales of non-performing loans (NPLs) by Fannie Mae and Freddie Mac (the Enterprises), as well as post-sale borrower outcomes. According to the report, the Enterprises' NPL sales reduce the number of delinquent loans held in their inventories and transfer credit risk to the private sector. NPLs are generally one year or more delinquent.                                   

Among other information, the report provides the quantity and attributes of NPLs sold from Aug. 1, 2014, through June 30, 2017, and reflects borrower outcomes as of June 30, 2017, on NPLs sold through Dec. 31, 2016.