In the November 7, 2016, Federal Register (81 FR 78063, click here) the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Board), the Federal Deposit Insurance Corporation (FDIC), the Farm Credit Administration (FCA), and the National Credit Union Administration (NCUA) jointly issued a proposed rule to amend their regulations regarding loans in areas having special flood hazards to implement the private flood insurance provisions of the Biggert-Waters Flood Insurance Reform Act of 2012 (Biggert-Waters Act). Specifically, the proposed rule would require regulated lending institutions to accept policies that meet the statutory definition of private flood insurance in the Biggert-Waters Act and permit regulated lending institutions to accept flood insurance provided by private insurers that does not meet the statutory definition of private flood insurance on a discretionary basis, subject to certain restrictions.
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Read articles below for analysis and discussion of recent trends by BM&G’s industry experts.
CFPB Bulletin 2016-02, Service Providers
In the October 26, 2016, Federal Register (81 FR 74410, click here) the Consumer Financial Protection Bureau (CFPB) published Bulletin 2016-02 (Bulletin) that revises and replaces Bulletin 2012-03 regarding lenders’ accountability for violations of Federal consumer financial laws by their service providers (see firm website www.bmandg.com for April 18, 2012 firm memorandum on Bulletin 2012-03).
CFPB Releases updates to TRID Small Entity Compliance Guide and Guide to Loan Estimate and Closing Disclosure Forms
On October 12, 2016, the Consumer Financial Protection Bureau (“CFPB”) provided updated versions of the Know Before You Owe mortgage disclosure rule Small Entity Compliance Guide (“SECG”) and the Guide to Loan Estimate and Closing Disclosure Forms (“GTF”). The updates represent the fourth revisions to the Guides, which were originally published in April, 2014. According to the CFPB, the updated Guides incorporate guidance from existing webinars to add clarity on various topics. The updated Guides do not reflect the proposed amendments published by the CFPB on July 29, 2016, for which the public comment period expired on October 18th. Below are some of the highlights contained in the updated Guides:
Department of the Treasury Introduces Regulations Defining Terms Describing Marital Status Under the Internal Revenue Code
In the September 2, 2016 issue of the Federal Register (81 FR 60609) (click here), the United States Department of the Treasury (“Department”) announced the implementation of final regulations, effective September 2, 2016, defining terms in the Internal Revenue Code that describe the marital status of taxpayers for federal tax purposes. These regulations reflect the United States Supreme Court’s holdings in Obergefell v. Hodges, 135 S. Ct. 2584 (2015) (click here) and United States v. Windsor, 133 S. Ct. 2675 (2013) (click here) as well as the Department’s Revenue Ruling 2013-17 (click here). The language of these definitions is gender neutral and designed to apply equally to same-sex and opposite-sex couples. The Department’s objective was to clarify, for federal tax purposes, the federal law espoused in Obergefell and Windsor.
TRID Rule Proposed Amendments Published in Federal Register
In today’s Federal Register (81 FR 54318, click here) the CFPB published the proposed amendments to the integrated mortgage disclosure rules that became effective on October 3, 2015 (TRID Rule), which would: • Memorialize past informal guidance. Memorialize certain past informal guidance issued through webinar, compliance guide, or otherwise. • Create tolerances for the total of payments. Establish express tolerances for the total of payments to parallel the existing provisions regarding the tolerances for accuracy in calculating the finance charge and disclosures affected by the finance charge.
CFPB PROPOSED AMENDMENTS TO TRID RULES
On July 29, 2016, the CFPB published proposed amendments to the TRID Rules on its website and on August 15, 2016, the CFPB also published the proposed amendments in the Federal Register (81 FR 54318). For ease of reference, the proposed amendments along with the existing text deleted and the existing text not deleted are reproduced below in the following manner: proposed amendments;[existing text deleted]; and, existing text not deleted.
HMDA Filing Instructions Guide Announcement and Notification of CFPB’s HMDA Compliance Resources
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.
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