Category Archives: Compliance

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PHH v. CFPB: "What is a Kickback?"

On April 12, 2016, a panel of the U.S. Court of Appeals for the D.C. Circuit heard oral argument in PHH Corporation’s (PHH) milestone legal battle with the Consumer Financial Protection Bureau (Bureau). During the argument, the Bureau had a lot to worry about: whether the agency’s unusual structure, headed by a single director who has … Continue reading this entry

A Response to the CFPB’S Recent Compliance Bulletin on MSAs

On October 8, 2015, the Consumer Financial Protection Bureau (CFPB or Bureau) issued a Compliance Bulletin on RESPA Compliance and Marketing Services Agreements (“MSAs”)(“Compliance Bulletin”).  The Compliance Bulletin’s message that MSA participants face “substantial risks” under RESPA has reverberated and caused buzz since it was issued. This response discusses some of the more puzzling and … Continue reading this entry

CFPB Extends TRID Effective Date to October 1

The Consumer Financial Protection Bureau (“CFPB”) announced that it would provide mortgage lenders with additional time to prepare for the highly anticipated TILA-RESPA Integrated Disclosures (“TRID”). Since the issuance of TRID’s final regulations in November 2013, mortgage lenders have been frantically preparing for its effective date of August 1, 2015. Generally speaking, TRID will consolidate … Continue reading this entry

A Bit of Grace

The Consumer Financial Protection Bureau (CFPB) has finally agreed to bend under the strain of numerous requests from financial industry participants and 255 bi-partisan House members and 41 senators, who requested that the CFPB delay the implementation of the new Truth in Lending Act and Real Estate Settlement Procedures Act Integrated Disclosures (TRID) requirements.  Although … Continue reading this entry

Legal Issues in Cause-Related Marketing

Cause-related marketing is frequently used by businesses to bolster sales, improve brand reputation, and improve public relations. Under the laws of a number of states, when a business advertises that it will make a charitable contribution to a charity when a consumer purchases a product, the business becomes a commercial co-venturer with the charity. Successful … Continue reading this entry

Truth in Lending Act and Consumer Leasing Act Dollar Thresholds Raised: Fewer Transactions Exempt

More consumer credit and leasing transactions will be subject to the Truth in Lending Act (TILA) and Consumer Leasing Act (CLA) in 2015. Effective January 1, 2015, the dollar threshold for exemption of most consumer credit transactions and consumer leases from TILA, the CLA, and their implementing regulations (Regulations Z and M) was increased from $53,500 (the … Continue reading this entry

Credit Card Issuers Beware: CFPB Fires Warning Shot on Promotional APRs

Who could possibly object to zero or low promotional interest rates offered for convenience checks, balance transfers or new purchases? The Consumer Financial Protection Board (CFPB), that’s who. In a new Bulletin based on its findings from examinations of large banks and card issuers, the CFPB warns that some credit card issuers may be engaging in deceptive … Continue reading this entry

Federal Reserve Board Proposes to Repeal Its Regulation AA (Unfair Credit Practices)

acts and regulations
The Board of Governors of the Federal Reserve System is requesting comment on its proposal to repeal its Regulation AA, which for nearly 30 years has prohibited banks from engaging in specified unfair and deceptive credit practices. In the Federal Trade Commission Act (the FTC Act), Congress directed the Federal Trade Commission (FTC) and the Federal Reserve … Continue reading this entry

OCC Updates Mortgage Banking Booklet in Comptroller's Handbook

The Office of the Comptroller of the Currency (OCC), which supervises federally-chartered banks and savings associations, has issued an updated “Mortgage Banking” booklet, which is part of the larger Comptroller’s Handbook.  The new booklet replaces the earlier version issued in March 1996, examination procedures issued in March 1998, and Section 750 of the former Office … Continue reading this entry

Tools to Ensure You Are Compliant With Your Compliance Check

It seems as if the Consumer Financial Protection Bureau (CFPB) has released final rules regarding consumer mortgage lending and servicing on a daily basis. There have been just as many announcements from the CFPB that is was delaying the effective date of the final rules and regulations. The CFPB has now informed us that most of … Continue reading this entry

CFPB Launches New Regulatory Implementation Page to Ensure Industry Is Ready to Comply With New Mortgage Rules

The Consumer Financial Protection Bureau (“CFPB”) recently announced that it has launched a Regulatory Implementation page that consolidates all of the new 2013 mortgage rules and related implementation materials.  CFPB indicates that the new web page is an effort to support rule implementation and ensure that the industry is ready to comply with the Dodd-Frank … Continue reading this entry

Penalties Getting Tougher for Wayward Financial Institutions

Senator Elizabeth Warren wants regulators to take more banks accused of financial misconduct to trial instead of settling with them before trial. But she is not the only one in Washington looking for ways to send a message to financial institutions that they had better not violate the law. The Justice Department (DOJ) is already implementing … Continue reading this entry

CFPB Gives Heads Up to Mortgage Servicers

During the Great Recession courts expressed frustration with sloppy paperwork and borrowers’ inability to get anyone to help them work out problem loans. Many courts refused to allow mortgage foreclosures to proceed because of the perceived mess. The Consumer Financial Protection Bureau just made it clear it was not going to tolerate these problems when it comes … Continue reading this entry

Ringing in the New Year in 2013: California’s Homeowner's Bill of Rights Law Takes Effect

Dubbed as the “Homeowner’s Bill of Rights,” on July 11, 2012, California Governor Jerry Brown signed into law AB 278/SB 900 marking the first U.S. state to adopt into law the residential mortgage foreclosure reform principles outlined in the February 2012 National Mortgage Servicing Settlement with the nation’s top five mortgage servicers. The Homeowner’s Bill of … Continue reading this entry

OCC Issues Largest Penalty It Has Ever Assessed

Today, the Office of the Comptroller of the Currency (OCC) announced a $500 million penalty against a national bank, HSBC Bank USA, N.A. The OCC’s penalty was based upon its determination that HSBC had violated the Bank Secrecy Act.  Separately, the OCC announced that it had issued a cease and desist order to HSBC to address … Continue reading this entry

An Uplifting Look into Non-Bank Supervision

Legislation was introduced in Congress August 2, 2012 that would prevent the Federal Reserve from designating nonbanks as systemically significant. This bill is significant, because it in effect prevents the Federal Reserve from supervising insurance companies and other nonbanks. Under Dodd Frank, nonbank entities that are designated as systemically important are subject to the Federal Reserve’s … Continue reading this entry

Hot Off of the Regulatory Printer -- CFPB Releases Its Proposed “Know Before You Owe” Disclosures

For weeks the Consumer Financial Protection Bureau has been advertising the pending release of its proposed mortgage loan disclosures that “are easier for both consumers and lenders to understand and use.”  Alas, await no more.  The CFPB released its proposed mortgage loan disclosures today.   The purpose of the new, supposedly friendlier disclosures, is for the … Continue reading this entry

Arkansas Supreme Court Affirms Change in Maximum Interest Rate

Earlier this Summer, the Arkansas Supreme Court affirmed the effectiveness of the 89th Amendment to the Arkansas Constitution, which was approved by Arkansas voters last November. For consumer credit, the amendment permits creditors other than federally insured depository institutions to charge interest on loans or contracts up to a maximum rate of 17% per annum.  Previously, the Arkansas Constitution only … Continue reading this entry

Federal Reserve Board and FTC Amend Adverse Action and Risk-Based Pricing Notice Requirements

As mandated by Section 1100F of the Dodd-Frank Wall Street Reform and Consumer Protection Act, new final rules issued by the Federal Reserve Board and the Federal Trade Commission (FTC) require creditors to disclose credit scores and information about credit scores to applicants for credit in adverse action and risk-based pricing notices.  Creditors who use credit scores … Continue reading this entry

FDIC Teams with FBI to Investigate Member-Insured Institutions

The Federal Deposit Insurance Corporation (“FDIC”) this week announced it is working with the FBI to investigate crime in federally insured financial institutions and to recover more money from persons formerly affiliated with such banks. The FDIC has long held the power to investigate member-insured institutions, as well as individuals, defined by statute as “institution-affiliated … Continue reading this entry

HUD Provides Long-Sought Clarification on Home Warranty Guidelines

On February 21, 2008, the U.S. Department of Housing and Urban Development (HUD) issued an informal (and non-binding) staff interpretation regarding home warranty companies, which seemed to raise more questions than it answered, primarily on the issues of marketing agreements and the marketing of home warranties. The agency found itself besieged by industry groups demanding … Continue reading this entry