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HUD and FHFA announce fair housing collaboration
On August 12, HUD announced a Memorandum of Understanding (MOU) with FHFA regarding fair housing and fair lending coordination. The MOU—a “first-of-its-kind collaborative agreement”—will expire in December 2025, and is intended to enhance enforcement of the Fair Housing Act and the agencies’ oversight of Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. According to HUD, the agencies “anticipate that the MOU will lead to stronger oversight that will help advance vigorous fair housing enforcement that can begin to redress our nation’s history of discriminatory housing practices.”
FDIC seeks input on off-site examinations
On August 13, the FDIC issued a notice and request for information (RFI) seeking comments from financial institutions regarding the agency’s supervisory approach to examinations during the Covid-19 pandemic, including on-site and off-site activities, use of technology, and communication methods. Specifically, the RFI seeks input on areas that worked well in the off-site examination context “to inform plans for future examinations, consistent with applicable law and the purpose of examinations.” Areas of interest include identifying (i) examination activities that worked best or were most effective during the off-site approach; (ii) new or emerging technologies that would support additional off-site examination activities (the FDIC noted that leveraging technology has improved efficiency and reduced burdens on financial institutions); and (iii) what improvements, if any, could be made to communication methods used during off-site examinations, including whether the FDIC should continue to use secure mail as an alternative to hardcopy mail to communicate supervisory correspondence. Comments are due October 12.
FFIEC gives authentication and access guidance to financial institutions
On August 11, the Federal Financial Institutions Examinations Council (FFIEC) published guidance, on behalf of its members, to provide financial institutions with examples of effective authentication and access risk management principles and practices for customers, employees, and third parties accessing digital banking services and financial institution information systems. Among other things, the guidance: (i) acknowledges significant risks associated with the cybersecurity threat landscape, which reinforces the need for financial institutions to effectively authenticate users and for customers to protect information systems, accounts, and data; (ii) provides examples of effective risk assessment practices, such as inventory of information systems and inventory of digital banking services and customers; and (iii) indicates that single-factor authentication with layered security is inadequate, therefore, multi-factor authentication or controls of equivalent strength with layered security may be more effective.
The guidance replaces the FFIEC-issued Authentication in an Internet Banking Environment (2005) and the Supplement to Authentication in an Internet Banking Environment (2011).
FHFA includes rental history in underwriting
On August 11, FHFA announced that Fannie Mae will consider rental payment history in its risk assessment processes to expand access to credit in a safe and sound manner. According to FHFA, the update to Fannie Mae’s systems will provide future borrowers the benefit of a positive rental payment history to be included in an underwriting decision.
CFPB seeks comment on mobile-device disclosures
On August 11, the CFPB issued a notice and request in the Federal Register for comments on a Generic Information Collection titled, “Electronic Disclosure on Mobile Devices.” According to the notice, the CFPB is planning “to conduct several studies using methodologies rooted in psychology and behavioral economics to understand electronic disclosure on mobile devices.” Through these studies, the CFPB intends to collect information about demographics, reading electronic disclosures, and how consumers engage with their finances on different devices. Comments are due by September 10.
OCC updates CRA, FHA, and ECOA notices
On August 5, the OCC issued Bulletin 2021-35, which informs national banks, federal savings associations, and federal branches and agencies of foreign banking organizations (collectively, banks) of the names and addresses for notices required by the CRA, ECOA, and for posters under the Fair Housing Act. Banks are required to make the appropriate changes to their notices and posters, as necessary, within 90 days of August 5.
This bulletin rescinds OCC Bulletin 2011-41, “Community Reinvestment Act Notices, Fair Housing Act Posters, Equal Credit Opportunity Act Notices: Guidance.”
FCC takes action against robocalls
On August 5, the FCC announced a “fair and consistent” process for reviewing actions regarding a voice service provider’s ability to comply with the FCC’s anti-spoofing caller ID authentication rules. FCC rules require broad implementation of the STIR/SHAKEN caller ID authentication framework on voice service providers’ IP networks. As previously covered by InfoBytes, the STIR/SHAKEN framework addresses, among other things, “unlawful spoofing by confirming that a call actually comes from the number indicated in the Caller ID, or at least that the call entered the US network through a particular voice service provider or gateway.” Since June 30, all major phone companies are using the STIR/SHAKEN caller ID authentication framework in their IP networks (covered by InfoBytes here). To combat illegal spoofing, the STIR/SHAKEN standards are considered a common digital language utilized by phone networks, which facilitates valid information to be passed from provider to provider. The standards also allow most caller ID information to be verified for providers and third-party consumer protection services to use that information to inform call blocking or warning services to protect customers. According to the FCC, “[t]he widespread implementation of STIR/SHAKEN is a major step forward in the FCC’s fight against malicious spoofing and scam robocalls.”
President Biden extends student loan moratorium
On August 6, President Biden announced the final extension of the moratorium on collecting student loans until January 31, 2022, which will “give the Department of Education and borrowers more time and more certainty as they prepare to restart student loan payments,” and will “ensure a smoother transition that minimizes loan defaults and delinquencies that hurt families and undermine our economic recovery.” In a statement issued by the Department of Education, Secretary of Education Miguel Cardona stated that it is the “Department’s priority to support students and borrowers during this transition and ensure they have the resources they need to access affordable, high quality higher education.” The moratorium was scheduled to expire on September 30.
CFPB releases Juneteenth timing guidance rule
On August 5, the CFPB clarified that it will not penalize mortgage lenders that did not adjust some time-sensitive borrower protections for Juneteenth, noting that the quick enactment of the law designating the holiday left the industry “unsure of how to treat the day for purposes of regulatory compliance.”
The CFPB released an interpretive rule to provide guidance on the impact of the new Juneteenth federal holiday on Regulation Z timing requirements related to the provision of the TRID Closing Disclosure at least three “business days” prior to closing and a consumer’s right to rescind a transaction until midnight on the third “business day” following settlement.
On the afternoon of June 17, President Biden signed a bill establishing June 19, Juneteenth, as a federal holiday. The bill amends 5 U.S.C. § 6103(a) which codifies legal public holidays. Because June 19 fell on a Saturday this year, the holiday was observed on Friday, June 18.
The timing requirements for purposes of delivering the Closing Disclosure prior to closing and for establishing a consumer’s rescission period are measured in “specific business days” defined as “all calendar days except Sundays and legal public holidays” as specified in 5 U.S.C. § 6103(a). Thus, for some transactions, Saturday June 19 counted as a business day when Closing Disclosures were issued or the rescission period began, but no longer counted as a business day at the end of the relevant time period. In its interpretive rule, the Bureau states that it interprets the definition of “specific business day” to mean the “the version of the definition in effect when the relevant time period begins.” Accordingly, for the 2021 Juneteenth holiday and the affected timing requirements, if the relevant time period began on or before June 17, 2021, then June 19, 2021 is a business day. If the relevant time period began after June 17, 2021, then June 19, 2021 is counted as a federal holiday and not a business day for purposes of the specific business day definition.
As such, it appears that the Bureau will not penalize mortgage lenders for not adding an additional day to the applicable waiting periods to the extent that the waiting periods began on or before the day President Biden established Juneteenth as a federal holiday, while also noting the obvious that nothing prohibits creditors from providing longer wait periods. As an interpretive rule to advise the public prospectively how an agency proposes to exercise a discretionary power, the Bureau’s guidance is exempt from the notice and comment provisions of the Administrative Procedures Act.
CFPB updates mortgage servicing small entity compliance guide
On August 4, the CFPB updated the mortgage servicing Small Entity Compliance Guide to include guidance on the 2021 Mortgage Servicing COVID-19 Final Rule and the 2020 Mortgage Servicing COVID-19 Interim Final Rule. In June, the Bureau finalized amendments to certain federal mortgage servicing regulations, which added provisions applicable to borrowers as federal foreclosure protections ended. As previously covered by InfoBytes, the CFPB previously released new FAQs regarding the Mortgage Servicing Rule and Regulation X and Regulation Z relating to escrow account guidance and analysis. The guide clarifies the servicing file requirements under the existing mortgage servicing rules and provides guidance regarding compliant use of multiple electronic systems. The guide also reflects updates made to the final rule regarding, among other things: (i) loss mitigation foreclosure protections; (ii) loss mitigation incomplete application requirements; (iii) and early intervention live contact. The final rule provisions addressed in the guide are temporary and phase out over time. Miscellaneous administrative changes have been made throughout the guide, as well.