Regulation

Fed, CFPB raise dollar thresholds for exempt transactions under Regulations M, Z

The Federal Reserve and CFPB announced on Tuesday that they will raise the dollar thresholds in Regulations Z and M for exempt consumer credit and lease transactions under the Truth in Lending Act (TILA) and Consumer Leasing Act. The adjustments—based on the annual percentage increase in the consumer price index on June 1—will take effect... Read More...

CFPB warns credit card issuers to avoid deceptive promotional APR offers

The CFPB warned credit card companies on Wednesday to avoid deceptive marketing practices, such as marketing promotional offers of zero or reduced interest rates without disclosing the true costs of the offer. In the new bulletin, the CFPB said luring consumers with offers that cause them to incur surprise charges is illegal and that credit... Read More...

NAFCU urges Fed to raise transaction limits under Regulation D

In a letter to the Federal Reserve, the National Association of Federal Credit Unions urged the board to review the account transaction limitations for savings deposits under Regulation D. Currently, the Fed is reviewing certain rules related to the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA). Regulation D imposes... Read More...

Amerisave, Novo ordered to pay $20 million for alleged lending scheme

Amerisave Mortgage Corp. and affiliate Novo Appraisal Management Company, along with their owner, were recently ordered by the CFPB to pay out more than $20 million in penalties and refunds for allegedly operating a bait-and-switch mortgage-lending scheme. According to the CFPB, Amerisave—an online mortgage lender based in Atlanta—allegedly... Read More...

CFPB warns consumers of risks associated with digital currencies

The CFPB flagged bitcoin and other digital currencies on Monday in a consumer advisory because of a lack of federal deposit or share insurance, telling consumers that the government will not back any related losses. The agency said that while digital currencies like XRP, Dogecoin and bitcoin could make payment processing faster and more cost... Read More...

CFPB’s qualified mortgage rule leads to reduced approval rates

Results from the Federal Reserve’s latest survey on the impact of the CFPB’s ability-to-repay/qualified mortgage rule showed the rule has reduced approval rates for prime jumbo home mortgages and nontraditional mortgages at many banks across the country. According to the survey, approximately 48 percent of U.S. banks said the rule has... Read More...

CFPB report finds most overdraft fees incurred on small transactions

A recent report from the CFPB found that most debit card overdraft fees are incurred on transactions of less than $24, and a majority of overdraft fees are repaid within three days. According to the CFPB, if a consumer borrowers $24 and pays a median overdraft fee of $34, it would translate to a loan with a 17 percent annual percentage... Read More...

House approves bill to ease mortgage servicing capital requirements

The House Financial Services Committee approved a number of bills earlier this week, including legislation from Rep. Blaine Luetkemeyer (R-Mo.) that would require regulators to conduct a study to calculate capital requirements for mortgage servicing assets. Luetkemeyer’s bill, which was approved 44-9, would delay the implementation of Basel... Read More...

GAO: CFPB’s Civil Penalty Fund needs additional oversight

A recent report from the Government Accountability Office (GAO) on the CFPB’s Civil Penalty Fund found that while the agency has implemented a number of internal controls, more needs to be done to document transactions originated in the fund. Civil penalties levied by the CFPB are placed into the fund to compensate potential eligible victims... Read More...

Richmond introduces bill to allow USPS to offer financial services

Rep. Cedric Richmond (D-La.) introduced legislation last week that would allow the U.S. Postal Service (USPS) to offer basic financial services, a plan proposed by the postal inspector general earlier this year. The Providing Opportunities for Savings, Transactions and Lending Act—or POSTAL Act—would allow USPS to offer checking... Read More...

CFPB’s Cordray discusses plan to allow complaint narratives

During a field hearing held in El Paso, Texas, last week, CFPB Director Richard Cordray discussed the agency’s complaint system and plans to allow consumer stories to be shown in the public database. The CFPB said in a press release last Wednesday that the plan would “provide important context to the complaint, help the public to detect... Read More...

CFPB files suit against Georgia-based debt collection “mill”

The CFPB filed a suit on Tuesday against a Georgia-based debt collection firm that allegedly used illegal tactics to intimidate consumers into paying debts not owed. Frederick J. Hanna and Associates, as well as its three principal partners, initiated hundreds of thousands of lawsuits against consumers based on allegedly deceptive court filings... Read More...

Financial groups urge CFPB to alter approach to privacy disclosure

Several financial services trade groups urged the CFPB on Monday to consider an alternate approach to simplifying the annual privacy notice requirement under the Gramm-Leach Bliley Act. A letter signed by the American Bankers Association, Consumer Bankers Association, Financial Services Roundtable, Independent Community Bankers of America and... Read More...

CFPB takes enforcement action against ACE Cash Express

The CFPB took enforcement action against ACE Cash Express, one of the largest payday lenders in the U.S., last week in a case alleging the lender harassed and pressured overdue borrowers into taking out more loans. CFPB Director Richard Cordray said the lender allegedly “bullied” borrowers into “a cycle of debt.” “This culture of... Read More...

Miller introduces bill to exempt loans to veterans from MBL cap

Rep. Jeff Miller (R-Fla.), the chairman of the House Veterans Affairs Committee, introduced legislation last week to exempt loans made to veterans from the credit union member business loan (MBL) cap. Under the legislation—H.R. 5061—the word “veteran” would include those who served on active duty or individuals who were discharged... Read More...

Waters presses rules committee to review appropriations bill

Rep. Maxine Waters (D-Calif.) urged the House Committee on Rules to review certain provisions of the 2015 appropriations bill that she said would hurt funding for financial regulators. Waters said one provision “places improper funding restrictions” on the Office of Financial Research (OFR), which was created to examine systemic risk in... Read More...

CFPB issues rule to clarify inheritance regulations for mortgages

The CFPB issued an interpretive rule on Tuesday to clarify inheritance rules for mortgages in the event of a family member’s death. Under the rule proposed by the CFPB, the name of the borrower’s heir may generally be added to the mortgage without triggering the agency’s ability-to-repay requirements—a move intended to help surviving... Read More...

FTC order prohibits collection of “phantom debts” by Georgia firm

A U.S. district court in Atlanta, Ga., recently issued an order that prohibits a firm based in the state from using threats and deceptive tactics to collect $3.5 million payday loan debts not owed by consumers. According to the FTC, Georgia resident John Williams and two companies he controls allegedly violated the FTC Act and Fair Debt... Read More...

NAFCU calls on members to submit comments on FHFA g-fee investigation

The National Association of Federal Credit Unions recently solicited input from members on the potential consequences of higher guarantee fees charged by Fannie Mae and Freddie Mac. Last year, the Federal Housing Finance Agency said it would consider raising guarantee fees, which led to blowback from the industry, which maintained the fee hikes... Read More...

ABA’s Keating: CFPB rules have unintended consequences on Latinos

Frank Keating, the president and CEO of the American Bankers Association, said new CFPB regulations on mortgages have disproportionately affected the Latino community, making it difficult for them to obtain a mortgage. “The new rules are well-intentioned,” Keating said, according to The Huffington Post. “In an effort to protect... Read More...

RBS to pay $99.5 million in FHFA mortgage-backed securities settlement

The Federal Housing Finance Agency (FHFA) announced last week a $99.5 million settlement with RBS Securities over alleged federal and state securities violations related to residential mortgage-backed securities (MBS). In September 2011, the FHFA filed suit against Ally Financial and 16 other banking institutions and underwriters, including... Read More...

HFSC approves TRIA, FSOC reform legislation

The House Financial Services Committee (HFSC) approved legislation last week aimed at reforming the Terrorism Risk Insurance Act (TRIA) and improving transparency within the Financial Stability Oversight Council (FSOC). Critics of FSOC, which was established under the Dodd-Frank Act, maintain that the council and its operations lack... Read More...

FHFA: Fannie Mae’s earnings unsustainable in coming years

The Federal Housing Finance Agency (FHFA) recently said in its annual report to Congress that Fannie Mae’s earnings—$84 billion last year, compared to $17.2 billion in 2012—are unsustainable. According to the report, which is part of the agency’s mission to ensure soundness and safety in Fannie Mae and Freddie Mac, the elevated earnings... Read More...

CFPB seeks comment on impact of mobile services on underbanked

The CFPB announced last week that it will conduct an analysis of the use of mobile financial services to examine how the technologies affect the unbanked and underserved who have limited access to traditional banking. According to data from the FDIC, approximately 90 percent of all U.S. consumers own a mobile phone, 60 percent of which are... Read More...

CUNA urges CFPB to expand small servicer exemption under mortgage rules

The Credit Union National Association (CUNA) told the CFPB in a letter last week that the agency should amend its mortgage rules to expand the small servicer exemption. Currently, the CFPB proposes to allow nonprofit groups that are part of a larger association of nonprofits to be exempt from certain requirements. Title XIV mortgage rules allow... Read More...

CFPB to hold hearing on mobile financial services in New Orleans

The CFPB will hold a field hearing in New Orleans next week to examine the development and use of mobile financial services. The hearing, which will be held at 10 a.m. CDT on June 12 at The Old U.S. Mint, will be streamed online and will be open to the public, though attendees are required to RSVP. A report issued by the Federal Reserve in... Read More...

Consumer Portfolio Service to pay $5.5 million to settle FTC charges of illegal practices

Consumer Portfolio Services (CPS), a national subprime auto lender, agreed last week to pay more than $5.5 million to settle charges by the FTC that the company allegedly used illegal tactics to collect debts not owed by consumers. The California-headquartered company agreed to refund or adjust 128,000 accounts by more than $3.5 million and... Read More...

California senate puts off bill to require EMV equipment for merchants

Legislation that would require merchants in the state of California to implement EMV technology was set aside on Monday at the request of the bill’s sponsor. The bill, S.B. 1351, would have required California vendors and retailers to implement EMV processing equipment by April 2016. It would have also required that 75 percent of replacement... Read More...

FTC staff submit comments on bills related to DTC auto sales

Members of the Federal Trade Commission’s staff recently submitted comments to Missouri state Rep. Michael Colona (D) and New Jersey state Rep. Paul Moriarty (D) on bills that affect the ability of auto manufacturers to sell cars directly to consumers. In Missouri, H.B. 1124 would expand the current restrictions on direct-to-consumer (DTC)... Read More...

FTC urges lawmakers to pass bill to enhance data broker transparency

The Federal Trade Commission called on Congress last week to enact legislation to regulate the activities of data brokers and to enhance consumer protections, following the release of a report that showed widespread opacity in the profession. In an effort to increase understanding of the data broker industry, the FTC undertook a study of nine... Read More...

SIFMA, FSR praise Department of Labor’s delay of fiduciary rule

Industry groups praised the Department of Labor last week after it announced a proposed fiduciary rule would be delayed until at least 2015 as a result of changes to its regulatory schedule. Proposed by the Department of Labor in 2010, the fiduciary rule could, according to the Financial Services Roundtable (FSR), restrict access to retirement... Read More...

Fed banks to host town hall meetings on payments system improvements

The Federal Reserve System will hold a number of town hall meetings during the month of June to encourage industry feedback on improving the speed, security and efficiency of the U.S. payment system. Last fall, the Federal Reserve released a public consultation paper on potential ways to improve the payments system, and central banks have since... Read More...

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