Skip to main content
Menu Icon Menu Icon
Close

InfoBytes Blog

Financial Services Law Insights and Observations

Filter

Subscribe to our InfoBytes Blog weekly newsletter and other publications for news affecting the financial services industry.

  • Massachusetts regulator allows work from home for some entities

    State Issues

    On July 12, the Division of Banks of the Massachusetts Office of Consumer Affairs and Business Regulations (Division) issued guidance that authorizes its licensees and registrants to continue permitting their personnel to operate remotely from non-licensed locations subject to certain conditions and restrictions. Among other things, the licensee or registrant: (i) cannot hold the unlicensed location out to the public as a place of business; (ii) must ensure that the individual working remotely only engages in activities that can be completed safely and in compliance with all applicable laws, regulations, and Division guidance; (iii) must ensure that the individual working remotely is strictly prohibited from engaging in any in-person customer interactions at the remote location; (vi) must have established security protocols to securely access systems through a virtual privacy network or other secure system; (v) must have policies and procedures to protect data; (vi) must protect sensitive customer information; and (vii) must ensure adequate supervision of remote personnel. The guidance also notes that the work location for mortgage loan originators (MLOs) has been the subject of various inquiries over the years and clarifies that MLOs are not required to live within a certain distance of a branch office and that “the Division will look to determine that the [branch] manager is able to provide adequate supervision for the given number and location of MLOs under his/her supervision.” The guidance replaces any previous guidance issued by the Division regarding telework and will continue, unless modified or withdrawn.

    State Issues Massachusetts Covid-19 Licensing Mortgages Mortgage Origination

    Share page with AddThis
  • CFPB issues summer supervisory highlights

    Federal Issues

    On June 29, the CFPB released its summer 2021 Supervisory Highlights, which details its supervisory and enforcement actions in the areas of auto loan servicing, consumer reporting, debt collection, deposits, fair lending, mortgage origination and servicing, payday lending, private education loan origination, and student loan servicing. The findings of the report, which are published to assist entities in complying with applicable consumer laws, cover examinations that generally were completed between January and December of 2020. Highlights of the examination findings include:

    • Auto Loan Servicing. Bureau examiners identified unfair acts or practices related to lender-placed collateral protection insurance (CPI), including instances where servicers charged unnecessary CPI or charged for CPI after repossession. Examiners also identified unfair acts or practices related to payoff amounts where consumers had ancillary product rebates due, and also found unfair or deceptive acts or practices related to payment application.
    • Consumer Reporting. The Bureau found deficiencies in consumer reporting companies’ (CRCs) FCRA compliance related to the following requirements: (i) accuracy; (ii) security freezes applicable to certain CRCs; and (iii) ID theft block requests. Specifically, examiners found that CRCs continued to include information from furnishers despite receiving furnisher dispute responses that “suggested that the furnishers were no longer sources of reliable, verifiable information about consumers.” Additionally, the report noted instances where furnishers failed to update and correct information or conduct reasonable investigations of direct disputes.
    • Debt Collection. The report found that examiners found instances of FDCPA violations where debt collectors (i) made calls to a consumer’s workplace; (ii) communicated with third parties; (iii) failed to stop communications after receiving a written request or a refusal to pay; (iv) harassed consumers regarding their inability to pay; (v) communicated, and threatened to communicate, false credit information to CRCs; (vi) made false representations or used deceptive collection means; (vii) entered inaccurate information regarding state interest rate caps into an automated system; (viii) unlawfully initiated wage garnishments; and (ix) failed to send complete validation notices.
    • Deposits. The Bureau discussed violations related to Regulation E and Regulation DD, including error resolution violations, issues with provisional credits, failure to investigate, failure to remediate errors, and overdraft opt-in and disclosure violations.
    • Fair Lending. The report noted instances where examiners cited violations of HMDA/ Regulation C involving HMDA loan application register inaccuracies, and instances where lenders, among other things, violated ECOA/Regulation B “by engaging in acts or practices directed at prospective applicants that would have discouraged reasonable people in minority neighborhoods in Metropolitan Statistical Areas (MSAs) from applying for credit.”
    • Mortgage Origination. The Bureau cited violations of Regulation Z and the CFPA related to loan originator compensation, title insurance disclosures, and deceptive waivers of borrowers’ rights in security deed riders and loan security agreements.
    • Mortgage Servicing. The Bureau cited violations of Regulation X, including those related to dual tracking violations, misrepresentations regarding foreclosure timelines, and PMI terminations.
    • Payday Lending. The report discussed violations of the CFPA for payday lenders, including falsely representing an intent to sue or that a credit check would not be run, and presenting deceptive repayment options to borrowers that were contractually eligible for no-cost repayment plans.
    • Private Education Loan Origination. Bureau examiners identified deceptive acts or practices related to the marketing of private education loan rates.
    • Student Loan Servicing. Bureau examiners found several types of misrepresentations servicers made regarding consumer eligibility for the Public Service Loan Forgiveness (PSLF) program, and identified unfair acts or practices related to a servicer’s “failure to reverse negative consequences of automatic natural disaster forbearances.” Additionally, examiners identified unfair act or practices related to failing to honor consumer payment allocation instructions or providing inaccurate monthly payment amounts to consumers after a loan transfer.

    The report also highlights recent supervisory program developments and enforcement actions.

    Federal Issues CFPB Supervision Consumer Finance Consumer Reporting Redlining Foreclosure Auto Finance Debt Collection Deposits Fair Lending Mortgage Origination Mortgage Servicing Mortgages Payday Lending Student Lending

    Share page with AddThis
  • Certain FHA Covid-19 guidance to expire June 30

    Federal Issues

    On June 22, FHA published an announcement with a reminder that certain relaxed Covid-19-related standards that had allowed for single-family lenders and servicers to limit face-to-face contact as part of the mortgage origination process for FHA loans would expire as intended on June 30. The temporary guidance, which was first announced last March to provide flexibility related to the re-verification of employment guidance and the exterior-only appraisal scope of work option, was extended several times during the pandemic (covered by InfoBytes here). FHA noted that due to low usage it believes that the expiration of the guidance will have minimal impact on the industry.

    Federal Issues FHA Mortgages Covid-19 HUD Mortgage Origination Servicing

    Share page with AddThis
  • Vermont passes law allowing mortgage employees to work from home

    State Issues

    On May 4, the Vermont legislature passed SB 88 (now known as Act 25), which among other things, permits mortgage loan activity to be conducted outside of an entity’s main place of business or branches.  Act 25 allows a mortgage originator, broker, or servicer’s employees to work from their residence, assuming the individual is adequately supervised by the employer.

    State Issues Covid-19 Vermont Mortgages Mortgage Origination Mortgage Broker Mortgage Servicing

    Share page with AddThis
  • Idaho Department of Finance once again extends “work from home” guidance

    State Issues

    On March 31, the Idaho Department of Finance extended its temporary regulatory guidance (previously covered here, here, here) permitting mortgage brokers and lenders, mortgage loan originators, regulated lenders, title lenders, payday lenders, and collection agency licensees and registrants to work from home under certain circumstances. The original guidance (previously covered here) permits employees to work from home where the residence is not a licensed branch and certain data security requirements are met. The guidance is extended through December 31, 2021.

    State Issues Covid-19 Idaho Mortgage Broker Mortgage Origination Payday Lending Title Loans Licensing

    Share page with AddThis
  • Washington passes law allowing mortgage employees to work from home

    State Issues

    On March 24, the Washington legislature passed SB 5077, allowing licensed mortgage loan originator activity to be conducted from the mortgage loan originator’s residence if, among other things, certain state and information security requirements are satisfied.

    State Issues Covid-19 Washington Mortgages Mortgage Licensing Licensing Mortgage Origination Loan Origination

    Share page with AddThis
  • Nevada Dept. of Business and Industry extends work from home guidance

    State Issues

    On March 15, the Nevada Department of Business of Industry, Division of Mortgage Lending extended its provisional guidance allowing licensed mortgage loan originators to work from home (previously covered herehere, and here) until June 30, 2021.

    State Issues Covid-19 Nevada Mortgages Mortgage Licensing Licensing Mortgage Origination

    Share page with AddThis
  • FHA extends Covid-19 origination and 203(k) servicing flexibilities

    Federal Issues

    On February 23, FHA announced the extension of several Covid-19-related flexibilities for single-family lenders and servicers through June 30, generally to continue to limit face-to-face contact as part of the mortgage origination process for FHA loans. Specifically, Mortgagee Letter 2021-06 extends the re-verification of employment guidance and the exterior-only appraisal scope of work option, while Mortgagee Letter 2021-07 will “allow industry partners additional opportunity to utilize flexible guidance related to” self-employment and rental income verification. Both extensions are applicable to Single Family Title II forward and Home Equity Conversion Mortgages. Additionally, FHA is extending temporary flexibilities “for the administration of 203(k) Rehabilitation Mortgage Insurance Program escrow accounts for borrowers in forbearance” for Single Family Title II forward 203(k) rehabilitation mortgages only.

    Federal Issues FHA Covid-19 Mortgages HUD Mortgage Origination Servicing

    Share page with AddThis
  • Washington Department of Financial Institutions once again extends “work from home” guidance

    State Issues

    On January 29, the Washington Department of Financial Institutions issued interim regulatory guidance to licensed mortgage loan originators and companies that sponsor them relating to temporary remote work. The guidance extends earlier interim guidance (previously covered hereherehere, and here) permitting mortgage loan originators to work from home, provided certain data security obligations are met. The guidance extends through December 31, 2021.

    State Issues Covid-19 Washington Licensing Mortgage Origination Privacy/Cyber Risk & Data Security

    Share page with AddThis
  • Washington Department of Financial Institutions once again extends “work from home” guidance

    State Issues

    On January 29, the Washington Department of Financial Institutions issued interim regulatory guidance to licensed mortgage loan originators and companies that sponsor them relating to temporary remote work. The guidance extends earlier interim guidance (previously covered hereherehere, and here) permitting mortgage loan originators to work from home, provided certain data security obligations are met. The guidance extends through December 31, 2021.

    State Issues Covid-19 Washington Mortgage Licensing Mortgage Origination Loan Origination Licensing Privacy/Cyber Risk & Data Security

    Share page with AddThis

Pages