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  • CFPB finalizes Regulation Z HPML escrow exemptions

    Agency Rule-Making & Guidance

    On January 19, the CFPB issued a final rule amending Regulation Z, as required by the Economic Growth, Regulatory Relief, and Consumer Protection Act, to exempt certain insured depository institutions and credit unions from the requirement to establish escrow accounts for certain higher-priced mortgage loans (HPMLs). Under the final rule, any loan made by an insured depository institution or credit union that is secured by a first lien on the principal dwelling of a consumer would be exempt from Regulation Z’s HPML escrow requirement if (i) the institution has assets of no more than $10 billion; (ii) “the institution and its affiliates originated 1,000 or fewer loans secured by a first lien on a principal dwelling during the preceding calendar year”; and (iii) the institution meets certain existing HPML escrow exemption criteria. The final rule essentially adopts the proposed rule (covered by InfoBytes here) without change, except the end date for the exception to the prerequisite against maintaining escrows is finalized as 120 days after the date of publication in the Federal Register, instead of the 90 days as proposed.

    Agency Rule-Making & Guidance CFPB Regulation Z HPML Escrow Mortgages EGRRCPA

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  • Fed’s final rule modifies assessment fees for large financial companies

    Agency Rule-Making & Guidance

    On November 19, the Federal Reserve Board issued a final rule modifying the annual assessment fees for its supervision and regulation of large financial companies. The final rule is nearly identical to the proposal issued in November 2019, covered by InfoBytes here. The final rule raises the minimum threshold from $50 billion to $100 billion in total consolidated assets to be considered an assessed company and adjusts the amount charged to assessed companies, as required by the Economic Growth, Regulatory Relief, and Consumer Protection Act. The final rule will be effective 30 days after publication in the Federal Register.

    Agency Rule-Making & Guidance Federal Reserve Fees EGRRCPA

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  • CFPB issues proposed rule on Regulation Z HPML escrow exemptions

    Agency Rule-Making & Guidance

    On July 2, the CFPB issued a notice of proposed rulemaking (NPRM) to amend Regulation Z, as required by the Economic Growth, Regulatory Relief, and Consumer Protection Act, and exempt certain insured depository institutions and credit unions from the requirement to establish escrow accounts for certain higher-priced mortgage loans (HPMLs). Under the proposed amendment, any loan made by an insured depository institution or credit union that is secured by a first lien on the principal dwelling of a consumer would be exempt from Regulation Z’s HPML escrow requirement if (i) the institution has assets of no more than $10 billion; (ii) “the institution and its affiliates originated 1,000 or fewer loans secured by a first lien on a principal dwelling during the preceding calendar year”; and (iii) the institution meets certain existing HPML escrow exemption criteria. Comments on the NPRM will be accepted for 60 days following publication in the Federal Register.

    Agency Rule-Making & Guidance CFPB Escrow Mortgages Regulation Z TILA EGRRCPA

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  • CFPB releases spring 2020 rulemaking agenda

    Agency Rule-Making & Guidance

    On June 30, the CFPB released its spring 2020 rulemaking agenda. According to a Bureau announcement, the information details the regulatory matters that the Bureau “expect[s] to focus on” between May 1, 2020 and April 30, 2021. The announcement notes that the agenda was set before the Covid-19 pandemic struck and while the Bureau “continues to move forward with other regulatory work,” it will prioritize work related to supporting consumers and the financial sector during and after the Covid-19 pandemic.

    In addition to the rulemaking activities already completed by the Bureau in May and June of this year, the agenda highlights other regulatory activities planned, including:

    • Escrow Rulemaking. The Bureau intends to issue a proposed rule to implement Section 108 of the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018, which directs the Bureau to exempt certain loans made by creditors with assets of $10 billion or less (and that meet other criteria) from the escrow requirements applicable to higher-priced mortgage loans.
    • Small Business Rulemaking. The Bureau states that in September 2020, it will publicly release materials for an October panel (convening under the Small Business Regulatory Enforcement Fairness Act) with small entities likely to be directly affected by the Bureau’s rule to implement Section 1071 of Dodd-Frank.
    • HMDA. The Bureau states that two rulemakings are planned, including (i) a proposed rule that follows up on a May 2019 advanced notice of proposed rulemaking which sought information on the costs and benefits of reporting certain data points under HMDA and coverage of certain business or commercial purpose loans (covered by InfoBytes here); and (ii) a proposed rule addressing the public disclosure of HMDA data.
    • Debt Collection. The Bureau intends to release the final rule amending Regulation F to implement the Fair Debt Collection Practices Act in October 2020 (InfoBytes coverage of the May 2019 proposed rule here). Additionally, “at a later date” the Bureau intends to finalize the February supplemental proposal, which covers time-barred debt disclosures (covered by a Buckley Special Alert here).
    • Qualified Mortgages (QM). The Bureau states it is considering issuing a proposed rule “later this year” that would create a new “seasoning” definition of a QM under Regulation Z, allowing for QM status after the borrower has made consistent timely payments for a defined period.

    Additionally, in its announcement, the Bureau notes that it is (i) participating in an interagency rulemaking process on quality control standards for automated valuation models (AVMs) with regard to appraisals; and (ii) continuing to review and conduct the five-year lookback assessments under Section 1022(d) of Dodd-Frank.

    Agency Rule-Making & Guidance CFPB Rulemaking Agenda HMDA Small Business Lending Regulation Z Debt Collection ECOA Escrow EGRRCPA Mortgages

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  • VA issues guidance for noncompliant interest rate reduction refinance loans

    Agency Rule-Making & Guidance

    On April 20, the Veterans Benefits Administration (VA) issued Circular 26-20-16, which provides guidance for noncompliant interest rate reduction refinance loans (IRRRLs). The guidance notes that the Economic Growth, Regulatory Relief, and Consumer Protection Act (the Act) provides statutory criteria that affect whether the VA can guarantee refinance loans. In VA Circular 26-19-22, the VA notified lenders that an IRRRL must meet the requirements of the Act to receive and retain the full amount of VA’s guarantee. As such, Circular 26-20-16 sets forth requirements for IRRRLs, including enterprise level reporting and loan level reporting. The circular also discusses loan seasoning issues and the VA’s oversight of lender actions. The circular is rescinded April 1, 2023.

    Agency Rule-Making & Guidance Department of Veterans Affairs IRRRL EGRRCPA Consumer Lending Refinance

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  • FHFA final rule amends stress testing requirements

    Agency Rule-Making & Guidance

    On March 24, the FHFA published a final rule amending its stress testing requirements consistent with changes made by section 401 of the Economic Growth, Regulatory Relief, and Consumer Protection Act. The final rule adopts amendments proposed last December (covered by InfoBytes here) without change, increasing the minimum threshold for FHFA-regulated entities to conduct stress tests from $10 billion to $250 billion in total consolidated assets, removing the requirements for Federal Home Loan Banks to conduct stress tests, and reducing the number of stress test scenarios from three to two by removing the “adverse” scenario. The final rule took effect March 24.

    Agency Rule-Making & Guidance FHFA Stress Test EGRRCPA FHLB

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  • OCC updates PTFA booklet in Comptroller’s Handbook

    Agency Rule-Making & Guidance

    On March 2, the OCC announced an update to the Protecting Tenants at Foreclosure Act booklet of the Comptroller’s Handbook. The revised booklet is intended to provide examiners with information and procedures concerning foreclosure activities and related consumer protections under the Protecting Tenants at Foreclosure Act of 2009 (PTFA). Among other things, the booklet provides a summary of requirements and addresses risks associated with a bank’s compliance with PTFA. The OCC notes that the Economic Growth, Regulatory Relief, and Consumer Protection Act made permanent certain sections of PTFA, and states that the applicable provisions “apply to any immediate successor in interest—including banks—that foreclose on a federally related mortgage loan or on any dwelling or residential real property, as defined in section 3 of [RESPA], that is subject to a bona fide lease, as defined in the PTFA and in 12 USC 2602.”

    Agency Rule-Making & Guidance OCC Foreclosure Tenant Rights EGRRCPA Comptroller's Handbook RESPA PTFA

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  • CFPB updates FCRA exam procedures

    Agency Rule-Making & Guidance

    On February 11, the CFPB issued updates to its Supervision and Examination Manual to include requirements of the FCRA created by the Economic Growth, Regulatory Relief, and Consumer Protection Act. The updates apply to the examination procedures covering consumer reporting, larger participants, and education loans, and aim to reduce instances of consumer compliance law violations by companies that provide consumer financial products and services. According to the CFPB, the larger participants examination procedures provide guidance to examiners covering a number of areas including, among other things, (i) “accuracy of information and furnisher relations”; (ii) “contents of consumer reports”; (iii) “consumer inquiries, complaints, and disputes and the reinvestigation process”; (vi) “consumer alerts and identity theft provisions”; and (v) “other products and services and risks to consumers.” The Bureau’s guidance to examiners on education loan exam procedures concentrates on servicing and origination. Some of the topics included are: (i) “advertising, marketing, and lead generation”; (ii) “customer application, qualification, loan origination, and disbursement”; (iii) “student loan servicing”; (iv) “borrower inquiries and complaints”; and (v) “information sharing and privacy.”

    Agency Rule-Making & Guidance Consumer Finance CFPB Federal Issues Examination Supervision EGRRCPA FCRA

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  • CFPB updates HMDA Small Entity Compliance Guide

    Agency Rule-Making & Guidance

    On January 24, the CFPB published the HMDA Small Entity Compliance Guide with updates to integrate the HMDA final rule issued in October. According to the guide, HMDA rule changes include (i) the types of institutions and transactions that are subject to Regulation C; (ii) the information that institutions must collect and report; and (iii) the process for reporting the information. As previously covered in InfoBytes, some institutions are exempt from the information collection and reporting requirements. Additionally, the guide notes that effective January 1, 2022, the rule “reduces the loan-volume threshold for covered open-end lines of credit to 100 covered open-end lines of credit in each of the two preceding calendar years” from the temporary threshold of 500 lines, previously covered here. It also clarifies and expands the categories of excluded transactions.

    Agency Rule-Making & Guidance HMDA EGRRCPA Supervision Mortgages CFPB

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  • FHFA proposes stress testing amendments

    Agency Rule-Making & Guidance

    On December 16, the FHFA released a notice of proposed rulemaking (NPRM) to amend the stress testing requirements for Federal Home Loan Banks (FHL Banks), consistent with changes made by Section 401 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (the Act). Specifically, the NPRM will (i) increase the minimum threshold for regulated entities to conduct stress tests from $10 billion to $250 billion in total consolidated assets; (ii) remove the requirements for FHL Banks subject to stress testing, as none of the banks meet the minimum threshold (notably, under the proposal, the Director will maintain the ability to require any regulated entity with assets below the minimum threshold to conduct stress tests at his or her discretion); and (iii) reduce the number of stress test scenarios from three to two by removing the “adverse” scenario. According to the FHFA, while the “adverse” scenario provides value in limited circumstances, “the ‘baseline’ and ‘severely adverse’ scenarios largely cover the full range of expected and stressful conditions.” As such, the FHFA believes removing the “adverse” scenario will reduce the supervisory burden for FHL Banks. The FHFA further proposes that the Enterprises (Fannie Mae and Freddie Mac)—who remain subject to stress testing under the NPRM—be required to conduct stress tests on an annual basis, as Section 401 changed the required frequency from “annual” to “periodic,” but did not define the term “periodic” in the Act.

    Comments on the NPRM are due January 13, 2020.

    Agency Rule-Making & Guidance FHFA Stress Test EGRRCPA Fannie Mae Freddie Mac

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