In the April 4, 2017, issue of the Federal Register (82 FR 16307, click here) the CFPB published a proposed rule, with a request for public comment, to permit creditors additional flexibility in complying with Regulation B in order to facilitate compliance with Regulation C (as amended in the 2015 HMDA final rule), to add certain model forms and remove others from Regulation B, and to make various other amendments to Regulation B and its commentary to facilitate the collection and retention of information about the ethnicity, sex, and race of certain mortgage applicants.
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Read articles below for analysis and discussion of recent trends by BM&G’s industry experts.
Updated Asset-Size Exemption Thresholds to HMDA Data Collection and HPML Escrow Account Requirements for 2017.
In the December 21, 2016 issue of the Federal Register (81 FR 93580) (click here), the Consumer Financial Protection Bureau (“CFPB”) announced the final rule maintaining the existing asset-size exemption threshold to the data collection requirements of the Home Mortgage Disclosure Act (“HMDA”).
Texas Home Equity Lending – 2016 Update
This memorandum will provide an overview of home equity lending embodied in Article XVI, Section 50, of the Texas Constitution and will also discuss some of the issues lenders face. The full text of Section 50, current to date, is attached to this memorandum (for ease of reference, the home equity and HELOC provisions are highlighted in bold typeface). All references to “sections,” “subsections,” and “parts” in this memorandum refer to the various provisions of Section 50, unless otherwise stated.
Updated Exemption Thresholds for Consumer Credit Transactions and Higher-Priced Mortgage Loan Appraisals
In the November 30, 2016 issue of the Federal Register (81 FR 86260) (click here), the Board of Governors of the Federal Reserve System (“Board”) and the Bureau of Consumer Financial Protection (“CFPB”) announced the final rule updating the threshold for consumer credit transactions exempt from the Truth In Lending Act. Also in the November 30, 2016 issue of the Federal Register (81 FR 86250) (click here), the Board, CFPB and the Office of the Comptroller of the Treasury (“OCC”) announced the final rule updating the threshold for exemptions from required appraisals for higher-priced mortgage loans. In both instances, the final rules will take effect on January 1, 2017, and the exemption thresholds will remain the same for 2017 at greater than $54,600 for exempt consumer credit transactions and at $25,500 or less for the exemption to the appraisal requirement for higher-priced mortgage loans.
CFPB Bulletin 2016-03, Detecting and Preventing Consumer Harm from Production Incentives
On November 28, 2016, the Consumer Financial Protection Bureau (CFPB) published Bulletin 2016-03 (Bulletin), click here, warning financial services companies, including entities supervised by the CFPB, of the detrimental effect incentives for employees and service providers to meet sales and other business goals can have on consumers if these incentives are not properly managed and supervised. The Bulletin describes compliance management steps supervised entities should take to mitigate risks posed by incentives.
Texas Home Equity Lending Interpretations Amendments
In the November 18, 2016, issue of the Texas Register (41 TexReg 9106), the Finance Commission of Texas and the Texas Credit Union Commission (the “Commissions”) jointly adopted amendments to §§153.5, 153.8, 153.13, 153.14 and 153.17 of the Home Equity Lending Interpretations. These amendments are effective as of November 24, 2016. The Commissions adopted the amendments without change to the proposed text published in the July 22, 2016, issue of the Texas Register.
CFPB Supervisory Highlights, Fall 2016
In the November 22, 2016, Federal Register (81 FR 83811) the Consumer Financial Protection Bureau (CFPB) published the Fall 2016 edition of its Supervisory Highlights, click here, which reports CFPB examination findings assessing compliance with Federal consumer financial laws in the areas of automobile loan origination and servicing, debt collection, mortgage origination and servicing, student loan servicing, and fair lending for the May 2016 through August 2016 report period. This memorandum will focus on the examination findings for mortgage origination.
Uniform Interagency Consumer Compliance Rating System
In the November 14, 2016, Federal Register (81 FR 79473, click here) the Federal Financial Institutions Examination Council (FFIEC), on behalf of its members-the Board of Governors of the Federal Reserve System (FRB), the Consumer Financial Protection Bureau (CFPB), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), and the State Liaison Committee (SLC) (the Agencies)-published a revised Uniform Interagency Consumer Compliance Rating System (the CC Rating System), effective for consumer compliance examinations that begin on or after March 31, 2017.
Loans in Areas Having Special Flood Hazards—Private Flood Insurance
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.
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).