Daily Archives: May 13, 2014


CFPB makes TILA regulations available in “easy to read” electronic format

CFPB makes TILA regulations available in “easy to read” electronic format

The Consumer Financial Protection Bureau is continuing its efforts to make it easier to comply with the requirements of the Truth in Lending Act.

In March, the CFPB issued its TILA-RESPA compliance guide which was designed to help smaller lenders and other mortgage companies understand and comply with the new mortgage disclosure rules designed to make it easier for consumers to understand loan documentation.

Now, the CFPB is launching eRegulations, an “intuitive, easy-to-navigate electronic format of Truth in Lending regulations.” The CFPB said that it expects eRegulations to make it easier to implement and use the recently adopted mortgage rules.

According to the CFPB, eRegulations makes the TILA regulations “easy to read and navigate.” The website features clear typography and a “persistent table of contents” to ensure fast access to any section of the regulation.

Click here to visit eRegulations from the CFPB


CFPB execs, union rep subpoenaed by House Committee

CFPB execs, union rep subpoenaed by House Committee

The House Financial Services Committee has subpoenaed two Consumer Financial Protection Bureau officials and a union representative to appear before the Subcommittee on Oversight and Investigations as part of an ongoing investigation into allegations of discrimination and retalition at the CFPB. 

The three officials are set to appear before the Subcommittee on May 21. 

These allegations were outlined at an April 2 Oversight and Investigations Subcommittee hearing where CFPB attorney and whistleblower Angela Martin testified that “there is a pervasive culture of retaliation and intimidation that silences employees and chills the workforce from exposing wrongdoing.”

The allegations of racial discrimination and retaliation were first reported in American Banker on March 6.

Ironically, just days ago, the CFPB issued a warning to lenders that if they didn’t get more aggressive about so-called “fair lending” they could faces charges of discrimination.

At that same hearing, the subcommittee also heard from Misty Raucci, an outside investigator hired by the CFPB to examine Martin’s claims. Raucci concluded after an investigation that Martin’s claims of retaliation were valid.

The CFPB and the National Treasury Employees Union refused to allow invited witnesses to appear at the April 2 hearing when they learned that Martin would testify.

Their refusal resulted in the subcommittee voting unanimously to approve subpoenas for Stacey Bach, Assistant Director of the CFPB’s Office of Equal Employment Opportunity; Liza Strong, Director of Employee Relations at the CFPB; and Ben Konop, Executive Vice President of NTEU Chapter 335.

“Regrettably, congressional subpoenas were necessary in order for the committee to get the answers it needs in this investigation. In the coming months, the committee expects to hear from all those who can shed light on allegations of discrimination and retaliation. The Bureau must be held accountable for any such reprehensible behavior,” said Chairman Jeb Hensarling, R-Texas.

REVEALED: Christie officials put pension cash into fund that backed donor’s companies


BoE says banks must do more to protect themselves from crises

BoE says banks must do more to protect themselves from crises

The Bank of England has told banks to do more to bolster their reserves, warning that lenders’ balance sheets are not yet at the levels required to weather another financial crisis.

Sir Jon Cunliffe, the Bank’s deputy governor for financial stability, said new requirements being introduced by regulators in order to end the “too big to fail” phenomenon were necessary despite claims they would reduce the amount banks are able to lend.

In a speech in London, he said current requirements on risk-weighted capital – the reserves a bank is required to hold weighted against how safe they are – went only some way to make banks safer, especially at a time of rising asset prices. Fears have arisen that in the era of quantitative easing and low interest rates, asset prices have been inflated, meaning capital appears less risky than it is. Sir Jon said risk weighting models can be inaccurate.

“[T]he evidence of the crisis is that this risk can become more pronounced in boom times when asset prices are rising and the pressure to expand balance sheets with cheap funding is greatest,” Sir Jon said. “The result is dangerous concentrations in what appear to be low-risk assets.


City broker will become the sixth firm to be fined by UK regulators over the Libor rate-rigging scandal, Sky News learns

City broker will become the sixth firm to be fined by UK regulators over the Libor rate-rigging scandal, Sky News learns

The Libor rate-rigging scandal will re-emerge this week when a City broking firm becomes the latest to be fined by City watchdogs over the affair.

Sky News has learnt that RP Martin, an interdealer broker, has agreed a settlement with the Financial Conduct Authority (FCA) for its role in the manipulation of crucial interbank borrowing rates.

An announcement is expected on Thursday.

Insiders said on Tuesday evening that the fine would be by far the smallest levied on any of the firms so far found culpable in the Libor-rigging conspiracy.

RP Martin’s fine is expected to be confirmed as being less than £1m because a more appropriate penalty in the context of its offences would have left the firm unable to pay while remaining in business.


Wells Fargo Must Answer for Failed Home Loans, U.S. Says

Wells Fargo Must Answer for Failed Home Loans, U.S. Says

Wells Fargo & Co. (WFC)’s $5 billion payment two years ago in a national mortgage settlement was for loan servicing abuses, and the bank still needs to answer for making bad government-insured loans, a U.S. Justice Department lawyer told a federal appeals court.

The court should reject the bank’s arguments that the national agreement limits new claims, department attorney Lindsey Powell said. Wells Fargo’s attempt to fend off a New York lawsuit alleging reckless loan origination mischaracterizes issues it raises as covered by the national settlement, Powell told a three-judge panel of the U.S. Court of Appeals today in Washington.

“All of the loans at issue in that case contain material violations” of underwriting standards and other mortgage regulations and are fair game for the government, Powell said.


FHFA, GSEs launch program to “stabilize” communities hit hardest by foreclosures

FHFA, GSEs launch program to “stabilize” communities hit hardest by foreclosures

Federal Housing Finance Agency Director Mel Watt addressed the future of the agency he leads and the future of Fannie Mae and Freddie Mac in his first public address on Tuesday.

In Watt’s speech, he outlined three main goals: Maintain, reduce and rebuild.

One of the tenets of Watt’s “maintain” goal is the continued refinement and improvement of mortgage servicing and foreclosure prevention standards. “Experiences in recent years have revealed serious weaknesses in the servicing industry and in the foreclosure prevention alternatives offered to borrowers,” Watt said. “Substantial work has been done to get things right, but there is still room for improvement.”

Porn Account Closures Show Banks Erring on Far Side of Caution

risky business pic

A new war is brewing between banks and their customers, and the fight is going public.

PR black eyes of the past would have come from ATM surcharges or foreclosure injustices. Now, news reports are stacking up about angry customers — payday lenders, check cashers, telemarketers, gun dealers and even adult entertainers — who are complaining that their accounts have been, or could be, unfairly terminated.

The businesses say they are legitimate, but banking regulators and the Justice Department are warning that these and other businesses are high risk for money laundering, consumer fraud and other crime. Pressure is being applied through stalled merger approvals and the lingering threat of lawsuits.

The pornography sweep in particular only strengthens bankers’ suspicions that regulators are forcing them to play the role of morality police. And it raises more practical questions for bankers: How do they balance public perception and compliance? What industry will they feel compelled to shut out next?

“Banks are left to guess who deserves access to the banking system and who doesn’t,” says William Isaac, a former Federal Deposit Insurance Corp. chairman who recently stepped down as chairman of Fifth Third Bancorp (FITB). Isaac, who is now head of the financial institutions group at FTI Consulting, has advised payday-lending companies.

JPMorgan Chase (JPM) has closed accounts of individuals or businesses associated with the adult entertainment industry, several media outlets have reported. In one case, the adult film actress Teagan Presley posted on her Twitter site a copy of the alleged letter from Chase saying her account would be closed on May 11. Presley’s husband, film producer Joshua Lehman, toldBusiness Insider, “it was because of our industry.”

Presley later tweeted, “So @chase are you going to close my kids savings acct now cause my name is on there too just like you did my personal acct.”

JPMorgan declined to discuss these reports or answer how widespread the account closures are.

Read on.


Midsize Banks May Get Some Relief From Dodd-Frank

Midsize Banks May Get Some Relief From Dodd-Frank

Law360, New York (May 12, 2014, 7:24 PM ET) — A recent speech by the Federal Reserve’s regulations point man suggesting that banks with less than $100 billion in assets should be exempt from some stringent post-financial crisis regulations, may herald regulatory relief for midsize financial institutions and a dialing back of some post-financial crisis mandates on smaller institutions.

The speech by Fed Gov. Daniel Tarullo created a stir in the banking world, as it highlighted the need to create a sort of middle class for banks within $50 billion and $100 billion in assets that…


Fannie, Freddie Must Pay Okla. County Tax, DC Circ. Hears

Fannie, Freddie Must Pay Okla. County Tax, DC Circ. Hears

Law360, Washington (May 12, 2014, 7:26 PM ET) — Officials for Kay County, Oklahoma, urged a D.C. Circuit panel Monday to force Fannie Mae and Freddie Mac to pay a local real estate transfer tax, saying Congress never intended to make the mortgage giants immune to all local taxes.

According to Kay County’s Board of Commissioners, Fannie Mae and Freddie Mac’s alleged exemption from local and state property transfer taxes is unconstitutional, as they are both private companies despite their conservatorship under the Federal Housing Finance Agency.

Although five other federal appeals courts have largely…