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Ueijo says CFPB focus is on the economically vulnerable; urges attention to consumer complaints
On February 10, CFPB acting Director Dave Uejio published a blog post sharing his “broad vision” for the Division of Consumer Education and External Affairs (CEEA). This guidance, Uejio emphasized, will help to immediately advance the Bureau’s policy priorities and protect economically vulnerable consumers, which includes making sure consumers who submit complaints to the Bureau “get the response and the relief they deserve.” Observing that some companies have not met their obligations to respond to consumer complaints, Uejio reiterated that “[i]t is the Bureau’s expectation that companies provide substantive responses that address the issues consumers describe in their complaints.” He also noted that because consumer advocates have identified disparities in certain companies’ responses to Black, Brown, and Indigenous communities, he asked Consumer Response to provide an analysis identifying companies with poor track records on these issues. To achieve his goal of assisting economically vulnerable consumers, Uejio asked CEEA to take the following steps:
- Target resources to ensure struggling homeowners in delinquency or at risk of foreclosure and renters at risk of eviction know their rights.
- Increase coordination efforts with other agencies to provide assistance and information to at-risk homeowners and renters.
- Collaborate with coalitions of stakeholders, including consumer advocates, civil rights groups, grassroots, community-based organizations, and individual consumers to ensure homeowners receive information and assistance in languages and terminology they understand.
- Help ensure homeowners and renters can access HUD-approved housing counseling organizations so they can manage financial hardships due to Covid-19.
- Take the lead on updating the Bureau’s website so it is more user friendly and focused on consumers rights, and expand the Bureau’s social media presence so consumers can be heard from directly.
- Aggressively rebuild and repair the Bureau’s relationships with external stakeholders who support economically vulnerable consumers, including consumer, civil rights, racial justice, and tribal and Indigenous rights groups.
Since being named acting Director, Uejio has also published blog posts conveying his visions for the Division of Research, Markets, and Regulations and the Office of Supervision, Enforcement, and Fair Lending (covered by InfoBytes here and here).
SBA addresses PPP loan error codes
On February 10, the Small Business Administration (SBA) issued an updated procedural notice providing instructions for lenders addressing Paycheck Protection Program (PPP) loan error codes. The notice, which revises guidance provided in a previously issued procedural notice (covered by InfoBytes here), addresses (i) Second Draw PPP loan guaranty applications where there is a hold code on the borrower’s First Draw PPP loan, as well as (ii) First Draw PPP loan guaranty applications and Second Draw PPP loan guaranty applications with compliance check error messages. SBA provides lenders with several methods for resolving hold codes and compliance check error messages, including resolution through lender certification or resolution through SBA review. The notice also addresses how SBA handles duplicate loans, loans with multiple DUNS numbers, and other hold codes that cannot be resolved by these processes. The same day, SBA also announced plans to take additional steps to improve the PPP, including (i) enabling “lenders to directly certify eligibility of borrowers for First Draw and Second Draw PPP loan applications with validation errors to ensure businesses who need funds and are eligible receive them as quickly as possible”; (ii) allowing “lenders to upload supporting documentation of borrowers with validation errors during the forgiveness process”; and (iii) creating “additional communication channels with lenders to assure [SBA is] constantly improving equity, speed, and integrity of the program, including an immediate national lender call to brief them on the Platform’s added capabilities.”
SBA updates PPP processing fee guidance
On February 8, the Small Business Administration (SBA) issued an updated procedural notice addressing changes to the Paycheck Protection Program (PPP) processing fees and reporting process. The notice covers the breakdown of fees for first-draw PPP loans made after December 27, 2020 and for second-draw PPP loans. The notice notes that “all processing fees are based on the balance of the PPP loan outstanding at the time of full disbursement of the loan.” The SBA states that lenders may request payment of processing fees after the lender successfully reports that the loan has been fully disbursed by using Form 1502. Moreover, the SBA states that it will remit Economic Injury Disaster Loan (EIDL) reconciliation payments from February 9 through February 19. As previously covered by InfoBytes, SBA is no longer deducting EIDL advances from PPP forgiveness payments, and for any forgiveness payments that were already reduced by an EIDL advance, the SBA will automatically remit a reconciliation payment to the PPP lender that will include the advance amount plus interest through the remittance date.
California Department of Real Estate reissues FAQs regarding licensing process
On February 10, the California Department of Real Estate reissued FAQs regarding licensing and examination processes of the department during Covid-19. The FAQs respond to questions regarding, among other things, capacity limitations at exam centers, how to reschedule a cancelled exam, the best way to complete a renewal of an expiring real estate license, completing continuing education requirements, how the shelter in place orders affect the fingerprinting process, and whether the DRE will accept electronic signatures on licensing documents.
Florida reminds lenders of their credit reporting requirements under the CARES act
On February 10, the Florida Office of Financial Regulation released a set of “Compliance Tips” reminding lenders and their servicers that they may be required to report certain delinquent loans as “current” pursuant to the CARES Act. The guidance reminds lenders and loan servicers that under the federal CARES Act, those consumers who were not delinquent as of April 1, 2020 and who subsequently received an accommodation and are complying with the accommodation agreement should be reported as “current.” The tips also urged lenders to be proactive with borrowers to resolve credit reporting errors. Lastly, the tips advised lenders to seek out how reporting errors may have been made, and implement additional internal controls to ensure similar errors do not reoccur.
FHFA extends foreclosure moratorium, increases forbearance and deferral timelines
On February 9, the FHFA announced that Fannie Mae and Freddie Mac (GSEs) will extend their moratorium on single-family foreclosures and real estate owned (REO) evictions until at least March 31 (which was set to expire on February 28, previously covered here). The foreclosure moratorium applies to homeowners with a GSE-backed, single-family mortgage only, and the REO eviction moratorium applies to properties that were acquired by the GSEs through foreclosure or deed-in-lieu of foreclosure transactions. Additionally, FHFA announced that borrowers may be eligible for up to a three-month forbearance extension so long as they are on a Covid-19 forbearance plan as of February 28 (details on the Covid-19 forbearance covered by InfoBytes here) and the Covid-19 payment deferral may now cover up to 15 months of missed payments (previously covering up to 12 months of missed payments, additional details covered by InfoBytes here).
Additionally, FHFA issued an extension of several loan origination guidelines put in place to assist borrowers during the Covid-19 pandemic. Specifically, FHFA extended until March 31 existing guidelines related to: (i) alternative appraisal requirements on purchase and rate term refinance loans; (ii) alternative methods for documenting income and verifying employment before loan closing; and (iii) expanding the use of power of attorney to assist with loan closings.
The extensions are implemented in updates to Fannie Mae Lender Letters LL-2021-02, LL-2021-03, LL-2021-04; LL-2021-07; and Freddie Mac Guide Bulletin 2021-6; Bulletin 2021-7 and Selling FAQs.
Fed further extends temporary exception to allow bank insiders access to PPP
On February 9, the Federal Reserve Board announced the second extension of a temporary exception from the requirements of section 22(h) of the Federal Reserve Act and corresponding provisions of Regulation O to allow bank directors and shareholders to apply for Small Business Administration (SBA) Paycheck Protection Program (PPP) loans from their affiliated banks. The extension is effective immediately and goes through March 31. The Fed reiterated that any PPP loans extended to bank directors and shareholders must be consistent with SBA’s PPP lending restrictions and done without favoritism from the bank. The original extension was announced on April 17 and already extended once (covered by InfoBytes here).
Wyoming executive order instructing cooperation with federal agencies to implement Emergency Rental Assistance Program
On February 8, the governor of Wyoming issued Executive Order 2021-02, which instructs the Wyoming Department of Family Services (WDFS) to prepare for the implementation of the federal Emergency Rental Assistance Program (ERAP.) Section (b) specifically charges WDFS to enter into “formal or informal” cooperative agreements with any necessary federal agency, including the Department of Housing and Urban Development, for “information-sharing, planning, and technical assistance” related to rolling out ERAP.
Acting director outlines future direction for CFPB
On February 4, CFPB acting Director Dave Uejio published a blog post conveying his “broad vision” for the Division of Research, Markets, and Regulations (RMR). Uejio emphasized that in order for the Bureau to respond to his previously stated policy priorities—(i) relief for consumers facing hardship and economic crisis due to the Covid-19 pandemic, and (ii) racial equity (covered by InfoBytes here)—the agency must sharpen its focus on the consumer experience. To achieve this goal, Uejio is authorizing the Bureau’s use of its 1022(c)(4) data collection authority and has asked RMR to examine “the impact of specific industry practices on consumers’ daily budget and overall bottom line in order to target effective policy interventions.” Among other things, RMR has been asked to take the following immediate steps:
- Prepare an analysis assessing housing insecurities such as mortgage foreclosures, mobile home repossessions, and landlord-tenant evictions.
- Prepare an analysis to address pressing consumer financial barriers to racial equity in order to “inform research and rulemaking priorities,” and “[e]xplicity include in policy proposals the racial equity impact of the policy intervention.”
- Resume data collections paused due to Covid-19, including HMDA quarterly reporting, CARD Act data collection, PACE data collection, and the previously completed 1071 data collection.
- Focus mortgage servicing rulemaking on Covid-19 responses “to avert, to the extent possible, a foreclosure crisis” when pandemic forbearances end in March and April.
- Explore options for preserving the status quo with respect to QM and debt collection rules. (QM rules covered by InfoBytes here and a Buckley Special Alert; debt collection rules covered by InfoBytes here and here.)
Uejio also noted that he “will be assessing regulatory actions taken by the previous leadership and adjusting as necessary and appropriate those not in line with [the Bureau's] consumer protection mission and mandate,” and that he wants to “preserve, where possible, maximum policy flexibility” for President Biden’s nominee once confirmed.
Illinois reissues and extends several Covid-19 executive orders
On February 5, the governor of Illinois issued Executive Order 2021-04, which extends several executive orders through March 6, 2021 (previously covered here, here, here, here, and here). Among other things, the order extends: (i) Executive Order 2020-07 regarding in-person meeting requirements, (ii) Executive Order 2020-23 regarding actions by individuals licensed by the Illinois Department of Financial and Professional Regulation engaged in disaster response, (iii) Executive Order 2020-25 regarding garnishment and wage deductions (previously covered here), (iv) Executive Order 2020-30 regarding residential evictions (previously covered here), and (v) Executive Order 2020-72 regarding the residential eviction moratorium (previously covered here and here).