In the July 21, 2016 issue of the Federal Register (81 FR 47394) (click here), the Federal Financial Institutions Examination Council (“FFIEC”) announced the availability of Filing Instructions Guides (“Guides”) for data collected pursuant to the Home Mortgage Disclosure Act (“HMDA”) for 2017 and 2018. The Guides for these upcoming years can be found at the Bureau of Consumer Financial Protection’s (“CFPB”) website at http://www.consumerfinance.gov/data-research/hmda/for-filers. The current guide, for HMDA data collected during 2016, can be accessed at the FFIEC’s website at http://www.ffiec.gov/hmda/guide.htm. These Guides provide instruction for HMDA’s collection and reporting requirements.
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Read articles below for analysis and discussion of recent trends by BM&G’s industry experts.
Annual Privacy Notice – CFPB Proposes Regulation P Amendments
In the July 11, 2016, issue of the Federal Register (81 FR 44801, click here) the CFPB published proposed amendments to Regulation P (12 CFR part 1016), which implements the privacy notice provisions of the Gramm-Leach-Bliley Act (GLBA). The GLBA and Regulation P mandate that financial institutions provide their customers with annual notices regarding the institutions’ privacy policies. Regulation P sets forth requirements for how financial institutions must deliver these annual privacy notices. In certain circumstances, Regulation P permits financial institutions to use an alternative delivery method to provide annual notices. This method requires, among other things, that the annual notice be posted on a financial institution’s Web site.
Regulation Z HOEPA and Qualified Mortgage Annual Threshold Adjustments
In the June 27, 2016, issue of the Federal Register (81 FR 41418), click here, the Consumer Financial Protection Bureau established the following 2017 thresholds for high-cost and qualified mortgages under §§1026.32 and 1026.43, respectively.
U.S. Supreme Court Decision in Spokeo, Inc. v. Robins Addresses Constitutional Standing Requirements For Statutory Private Right of Actions For Violations of Federal Consumer Protection Law
In the case of Spokeo, Inc. v. Robins, 136 S.Ct. 1540 (May, 2016), (click here), the Supreme Court of the United States vacated a decision by the United States Ninth Circuit Court of Appeals and sent the case back to the Ninth Circuit for reconsideration. The issue was whether Robins had “standing” under Article III of the Constitution to file a private lawsuit for violations of the Fair Credit Reporting Act (the “FCRA”). If a plaintiff does not have standing, a federal court does not have jurisdiction to hear the case and must dismiss the lawsuit. The Court held that the Ninth Circuit had failed to fully analyze every element that must be met in order for a plaintiff to have Article III standing
Texas Supreme Court Issues Opinions on Invalidity of, and Availability of Forfeiture Actions for, Noncompliant Texas 50(a)(6) Home Equity Liens (Tex. Const. art. XVI, §50(a)(6))
On May 20, 2016, the Texas Supreme Court issued opinions in two noteworthy cases concerning home equity lending in Texas. The Wood case concerns whether a statute of limitations applies to actions to quiet title for constitutionally noncompliant 50(a)(6) home equity liens, and the Garofolo case concerns in what manner and under what circumstances a forfeiture action can be brought for a lender’s failure to perform its requirements under 50(a)(6).
Pre-dispute Arbitration Agreements – CFPB Proposed Rule (81 FR 32830)
In the May 24, 2016, issue of the Federal Register (81 FR 32830, click here), the CFPB published a proposed rule to govern pre-dispute arbitrations agreements in consumer finance transactions that will be confided in new 12 CFR part 1040 when made final. First, the proposed rule would prohibit covered providers of certain consumer financial products and services from using an agreement with a consumer that provides for arbitration of any future dispute between the parties to bar the consumer from filing or participating in a class action with respect to the covered consumer financial product or service. Second, the proposal would require a covered provider that is involved in arbitration pursuant to a pre-dispute arbitration agreement to submit specified arbitral records to the CFPB. The CFPB is also proposing to adopt official interpretations to the proposed rule. The text of the proposed rule and official interpretations are found on pages 32924 through 32929 of the above cited Federal Register.
CFPB Supervisory Highlights: Winter 2016
In the May 16, 2016 issue of the Federal Register (81 FR 30257) (click here), the Consumer Financial Protection Bureau (“CFPB”) published its tenth edition of its Supervisory Highlights. The Supervisory Highlights details CFPB supervisory observations, public enforcement actions, and corrective procedures. As it states recent CFPB regulatory emphases, it provides useful compliance guidance. The tenth edition covered CFPB work done primarily between September 2015 and December 2015.
Rural Housing Service Issues Qualified Mortgage Final Rule
In the May 3, 2016, issue of the Federal Register (81 FR 26461, click here) the Rural Housing Service (RHS) re-issued a final rule amending its Single Family Housing Guaranteed Loan Program regulations in 7 CFR Part 3555 to provide that a loan guaranteed by RHS is a Qualified Mortgage if it meets certain requirements set forth in 12 CFR 1026.43(e) of Regulation Z. The final rule adds new §3555.109 providing for an RHS qualified mortgage, as set forth below:
Department of Veterans Affairs Issues Policy Clarification Regarding VA’s Non-Allowable Fee Itemization Requirements for Closing Disclosure
On April 11, 2016, the Department of Veterans Affairs (“VA”) issued a circular explaining VA’s fee itemization requirements regarding the Integrated Closing Disclosure (“CD”) for consumer transactions governed by the TILA-RESPA Integrated Disclosure Rule (Circular 26-16-11, click here). The circular requires that, for so-called “non-allowable” fees and charges under 36.4313(d)(2), any credits used to offset such fees must be separately itemized on the CD in the Seller Paid or Paid By Others column.
Rural Housing Service Withdraws Qualified Mortgage Final Rule
In the March 31, 2016, issue of the Federal Register (81 FR 18456, click here) the Rural Housing Service (RHS) published a correction withdrawing the final rule published in the March 29, 2016, issue of the Federal Register (81 FR 17361) that amended its Single Family Housing Guaranteed Loan Program regulations in 7 CFR Part 3555 relating to RHS qualified mortgages under §1026.43(e) of Regulation Z, lender indemnification, and refinancing provisions.