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Our November 24, 2014 memorandum is hereby revised to reflect that on December 15, 2014, the Consumer Financial Protection Bureau (CFPB) published in the Federal Register (79 FR 74176) its proposed rule proposing amendments to the Mortgage Servicing Rules (MSR) under Regulation X (12 CFR part 1024) and Regulation Z (12 CFR part 1026). The CFPB also issued a seven page summary of these proposed amendments.

On October 22, 2014, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission (“SEC”), and, with respect to residential mortgage assets, the Federal Housing Finance Agency (“FHFA”) and the Department of Housing and Urban Development, (collectively, the “Agencies”) issued a joint final rule (the “Final Rule”) that implements the credit risk retention requirements of section 15G of the Securities Exchange Act of 1934 (the “Exchange Act”), as added by section 941 of the Dodd-Frank Act, Public Law 111-203. The rule was initially proposed in April 2011, and re-proposed in September 2013 with significant modifications based on industry and public comments. The Final Rule largely tracks the language of the re-proposed rule, with the exception of the cash flow restrictions, which the Agencies did not adopt.

On November 18, 2014 the CFPB issued Bulletin 2014-03 to remind lenders against discrimination in connection with verification of Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) income (herein collectively referred to as “SS income”) received by mortgage applicants. To view and/or print the bulletin in full, click this hyperlink. Below is a brief summary of the main points of the bulletin:

On November 13, 2014 the CFPB ordered a California mortgage lender to pay $730,000 for illegal loan originator compensation bonus plan involving steering of consumers into higher interest rate loans. A redacted text of the CFPB news release is set out below with hyperlinks to the CFPB complaint filed with the United States District Court for the Central District of California and the CFPB proposed consent order.

In an announcement published in the November 3, 2014 Federal Register (79 FR 65140, click here), the FHA announced that it is not adopting the CFPB’s recently issued qualified mortgage points and fees cure amendments for FHA insured loans. Recall that in the December 11, 2013 Federal Register, FHA published a final rule establishing a definition of “qualified mortgage” for single family residential mortgages that FHA insures, guarantees, or administers (78 FR 75215, click here).

In the October 30, 2014 issue of the Federal Register (79 FR 64518, click here) the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Farm Credit Administration, and the National Credit Union Administration (collectively, the Agencies) published a joint proposed rule to amend their regulations regarding loans in special flood hazard areas to implement certain provisions of the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA), which amends some of the changes to the Flood Disaster Protection Act of 1973 (FDPA) mandated by the Biggert-Waters Flood Insurance Reform Act of 2012 (Biggert-Waters).

Today the Consumer Financial Protection Bureau (CFPB) issued a final rule to allow financial institutions (including certain nonbanks within the CFPB’s jurisdiction) that limit their consumer data-sharing and meet other requirements to post their annual privacy notices online rather than delivering them individually. The final rule amends Regulation P (12 CFR part 1016) and will become effective upon publication in the Federal Register.