CFPB Adds Automobile Financers to “Larger Participants”
On June 10, 2015, the CFPB issued a final rule amending the regulation defining “larger participants” of various consumer financial services markets. The agency added a section defining larger participants of a market for “automobile financing,” which includes auto loan origination, refinancing of auto loans, auto leasing, and purchase or acquisition of loans or leases. The final rule defines “automobile” as any self-propelled vehicle primarily used for personal, family or household purposes for on- road transportation. Certain vehicles, such as motor homes, RVs, and golf carts, are excluded from this definition.
To read more, visit: http://files. consumerfinance.gov/f/201506_cfpb_defining- larger-participants-of-the-automobile-financing- market-and-defining-certain-automobile-leasing- activity-as-a-financial-product-or-service.pdf
Agencies Issue Final Rule Setting Minimum Requirements for AMCs
On June 9, 2015, several financial regulatory agencies issued a final rule setting minimum requirements for appraisal management companies (“AMCs”) that are subsidiaries owned and controlled by an insured depository institution and regulated by a federal financial regulatory agency. While AMCs covered by the rule are subject to the same requirements as state-regulated AMCs, they are not required to register with a state.
Fed’s Tarullo Highlights ABA Proposal for Regulatory Relief
On April 30, 2015, Federal Reserve Governor, Daniel Tarullo, delivered a speech in Washington, D.C., in support of the ABA and state bankers associations’ proposal to alleviate compliance burdens with respect to capital rules. A few months ago, the ABA and state bankers association pressured regulation agencies to permit exemption from complex “Basel III calculations” for banks with exceeding capital levels. Supporting the views of the ABA and state bankers associations, Tarullo stressed the importance of being aware of the Collins Amendment’s “minimum leverage capital requirements.” In his speech, Tarullo advocated for more straightforward capital requirements for banks in smaller communities and “tailored regulation.”
To read the speech, visit: http://www. federalreserve.gov/newsevents/speech/ tarullo20150430a.htm
Agencies Finalize Standards for State Appraisal Regulations
On April 30, 2015, the federal financial agencies and regulator of Fannie Mae and Freddie Mac finalized a rule issued under the Dodd-Frank Act. The rule comprised the final minimum state supervision requirements for appraisal management companies. States have an option to regulate AMCs. If states choose to regulate, AMCs are required to register within the state, use either “state-certified” or “licensed” appraisers for federally related transactions, and make sure that appraisals are independent. Alternatively, if states choose not to regulate within three years, AMCs cannot service federally related transactions. With the exception of state registration, federally regulated AMCs and state- regulated companies will be governed by the same standard.
To read the final rule, visit: https://www.fdic. gov/news/board/2015/2015-04-21_notice_sum_d_ fr.pdf
Fed, CFPB Webinar to Cover TILA-RESPA Integrated Disclosures
On May 26, 2015, the Federal Reserve and Consumer Financial Protection Bureau will hold their final webinar of the TILA-RESPA integrated disclosures series. The webinar will address the process of implementing the new disclosures to assist “creditors, brokers, and other stakeholders.”
To register, visit: https://www.webcaster4.com/ Webcast/Page/577/8180
FDIC to Offer Teleconference on CFPB Mortgage Rules
On May 21, 2015, the FDIC will conduct a bankers teleconference focusing on the Consumer Financial Protection Bureau’s mortgage rules. The FDIC staff will disclose observations and institutional practices that they believe will be beneficial to compliance officers. The deadline to register is May 19, 2015.
To learn more and register, visit: https://www.fdic.gov/news/news/financial/2015/fil15020.html
CFPB Updates Exam Procedures for TILA- RESPA Integration
On May 5, 2015, the Consumer Financial Protection Bureau provided procedure revisions as to how the bureau will conduct compliance exams for the TILA-RESPA integrated disclosures. The disclosures will take effect August 1, 2015.
To read the revised procedures, visit: http:// files.consumerfinance.gov/f/201505_cfpb_ mortgage-origination-exam-procedures.pdf
CFPB Issues Report on ‘Credit Invisible’ Individuals
On May 5, 2015, the Consumer Financial Protection Bureau issued a report on 55 million Americans. Of the 55 million Americans, the
CFPB labeled 26 million Americans “credit invisible” because those individuals did not have a history at a “major credit reporting bureau.” The remaining 19 million Americans were also linked to being “credit invisible” because of old or spare credit histories that could not be scored correctly. The report shows a relationship between low incomes and being “credit invisible.” Specifically, the report illustrates that more than 45% of low income consumers are either “credit invisible” or “unscored.” The report also notes that minorities are more likely to be “credit invisible” or “unscored.”
To view report, visit: http://files. consumerfinance.gov/f/201505_cfpb_data-point- credit-invisibles.pdf
CFPB Declines Congressional Appeals for TILA-RESPA Grace Period
On May 7, 2015, a letter from April 22, 2015 was released where Richard Cordray, Director of the Consumer Financial Protection Bureau, rejected appeals regarding a grace period for integrated disclosures of the TILA-RESPA that were to take effect August 1, 2015. Cordray stated to Representative Blaire Luetkemeyer (R) of Missouri, who is in favor of the grace period, that gauging possible “implementation challenges” before the effective date is speculative and uncertain. As an alternative, Cordray decided that the bureau would handle any issues once the rule is in effect. However, the ABA supports the bill introduced last week from representatives Steve Pearce (R) of New Mexico and Brad Sherman
(D) of California that protects from civil actions, throughout the end of the year, if lenders make “good faith efforts” to comply with disclosure implementation.
To read letter, visit: http://www.aba.com/ Advocacy/Grassroots/WINNDocs/cordray- luetkemeyer-letter-tila-respa.pdf
Gruenberg: Progress on Resolving SIFIs ‘Underappreciated’
On May 12, 2015, FDIC Chairman, Martin Gruenberg, delivered a speech in Washington D.C. with respect to the FDIC’s and Federal Reserve’s regulatory progress. In his speech, Gruenberg described changes of financial institutions in the United States and internationally and possible effects should the FDIC have to use its orderly liquidation authority.
To read this speech, visit: https://www.fdic.gov/ news/news/speeches/spmay1215.html
ABA Survey: TILA-RESPA Compliance Systems Not Ready
The implementation of the TILA-RESPA integrated disclosures is set to begin August 1, 2015. On May 13, 2015, an ABA survey was released showing that mortgage bankers are uncertain about if they will be ready for the new disclosure process. The survey also showed that a majority of banks are using “a vendor or consultant to assist” with integrated disclosure implementation. This uncertainty depicted in the survey indicates a likelihood of reduction “in credit availability during a transition period.”
To view survey results, visit: http://www.aba. com/Tools/Function/Mortgage/Documents/2015- VendorReadinessSurveyTILArespa.pdf
CFPB Seeks Comment on Student Loan Servicing
The Household Debt and Credit Report show that the student loan delinquency rate is about 11% higher than “consumer delinquency rates for mortgages, credit cards, auto loans, and home equity lines of credit.” Thus, on May 14, 2015, the Consumer Financial Protection Bureau requested information on aspects of student loan servicing to find ways to assist people in avoiding “unnecessary defaults.” The CFPB also requested information on student loan repayment practices and the process in regards to borrowers in distress.
Furthermore, the CFPB asked for comments on applying consumer protections to loan servicing. Comments are due by July 13, 2015.
To read the request for information, visit: http://files.consumerfinance.gov/f/201505_cfpb-rfi- student-loan-servicing.pdf
Fed Proposes ABA-Advocated Tweak to Liquidity Rule
On May 21, 2015, the Federal Reserve proposed a rule to count “municipal bonds as high-quality liquid assets.” The rule would be covered by the Liquidity Coverage Ratio and high-quality liquid asset expansion would be beneficial to all banks. All comments are due by July 24, 2015.
Fed Seeks Comments on NACHA Same-Day Payments Rule
On May 21, 2015, the Federal Reserve requested comments on changes with respect to NACHA’s same day ACH rule that would make the same- day provisions mandatory and the “5.2 cent per transaction fee paid to receiving institutions.” The deadline for the Federal Reserve to approve the rule is September 23, 2015. Therefore, to give the Federal Reserve enough time to review comments, comments are due by July 2, 2015.