CFPB proposes increase in HMDA reporting threshold




The Consumer Financial Protection Bureau on July 14 announced proposed changes to the Home Mortgage Disclosure Act reporting requirements for community banks and credit unions that issue home-equity lines of credit.

Financial institutions are generally required under the Home Mortgage Disclosure Act to report home-equity lines of credit if they made 100 such loans in each of the last two years. The new proposed rule would increase that threshold to 500 loans through calendar years 2018 and 2019 so the bureau can consider whether to make a permanent adjustment. The CFPB estimates the temporary 500-loan threshold would still capture about three-quarters of the home-equity lending market, down from about 88% at the 100-loan threshold.

Comments on the proposal will be accepted through July 31.

To learn more about the proposed changes, click here.

CFPB finalizes updates to TRID rule

On July 7, the Consumer Financial Protection Bureau announced a final rule updating its “Know Before You Owe” mortgage disclosure rule (also known as the TRID rule) with amendments that are intended to formalize guidance on the rule, and provide greater clarity and certainty. The CFPB also is releasing a limited follow-up proposal to address an additional implementation issue.

In addition to clarifications and technical corrections, the final rule amendments also address other issues including:

• Tolerance provisions for the total of payments that parallel the tolerances for the finance charge and disclosures affected by the finance charge;

• Adjustments to expand the provision granting a partial exemption from disclosure requirements of certain housing assistance loans:

• Extension of the rule’s coverage to all cooperative units, and;

• Provisions allowing the sharing disclosures with real estate brokers and other agents, and clarifying how a creditor may provide separate disclosure forms to the consumer and a seller.

The final rule will be effective 60 days after it is published in the Federal Register. However, the mandatory compliance date is Oct. 1, 2018.

To read more about the final rule, click here.

OCC releases report on top risks facing banks

On July 7, the Office of the Comptroller of the Currency reported that strategic, credit, operational and compliance risks remain top concerns for the federal banking system in its Semiannual Risk Perspective for Spring 2017. The report covers risks facing national banks and federal savings association and was based data for the 12 months ending Dec. 31, 2016.

Highlights from the report include:

• Strategic risk remains elevated as banks make decisions to expand into new products or services or consider new delivery channels and continue merger and acquisition activity. Banks face competition from nonfinancial firms, including financial technology companies entering the traditional banking industry. This competition is causing changes in the way customers and financial institutions approach banking.

• Credit underwriting standards and practices across commercial and retail portfolios remain an area of OCC emphasis. Over the past two years, commercial and retail credit underwriting has loosened, showing a transition from a conservative to an increasing risk appetite as banks strive to achieve loan growth and maintain or grow market share.

• Operational risk continues to challenge banks because of increasing cyber threats, reliance on concentrations in significant third-party service providers, and the need for sound governance over product service and delivery.

• Compliance risk remains high as banks continue to manage money-laundering risks and implement changes to comply with the amended customer protection requirements under the Military Lending Act and integrated mortgage disclosure rules.

The full report can be read by clicking here.

Fed to adopt global cash handling standards

On July 5, Federal Reserve Financial Services announced its commitment to adopt global standards for supply chain logistics and package tracking in FedCash Services.

This will be a multi-year effort involving changes to FedCash workflows and inventory control systems, as well as changes to the way the Fed will interact with armored car companies and the Fed’s customers. The change is being made to the entire cash supply chain and Federal Reserve Banks to realize greater efficiencies and control.

More details about the changes can be read by clicking here.

CFPB issues amendments to TILA closing disclosures

The Consumer Financial Protection has proposed amendments to the federal mortgage disclosure requirements under the Real Estate Settlement Procedures Act and the Truth in Lending Act. The proposed amendments address when a creditor may use a closing disclosure, instead of a loan estimate, to determine if an estimated closing cost was disclosed in good faith.

Comments on the revised proposal will be due 60 days after publication in the Federal Register. To learn more about the proposed amendments, click here.

Royal Bank of Scotland pays $5.5 billion to settle FHFA claims

The Federal Housing Finance Agency announced July 12 it has reached a settlement with Royal Bank of Scotland Group plc for $5.5 billion.

The settlement resolves all claims in the lawsuit filed by the FHFA alleging violations of federal and state securities laws in connection with private-label residential mortgage-backed securities trusts purchased by Fannie Mae and Freddie Mac between 2005 and 2007. Under the terms of the agreement, Royal Bank of Scotland will pay approximately $4.525 billion to Freddie Mac and approximately $975 million to Fannie Mae, and certain claims against Royal Bank of Scotland related to the securities involved will be released.

The FHFA news release about the settlement can be read by clicking here.

FFIEC updates HMDA resources for financial institutions

On July 11, the Federal Financial Institutions Examination Council has posted updated resources for financial institutions collecting Home Mortgage Disclosure Act data during or after 2017.

Modifications were made to the Technology Preview, Filing Instructions Guide for data collected in 2017, Filing Instructions Guide for data collected in or after 2018, and Frequently Asked Questions.

To learn about the updated HMDA resources, click here.

 

Credit unions

NCUA seeks comments on plan to close Stabilization Fund

The National Credit Union Administration is seeking comments on its proposed plan to close the Temporary Corporate Credit Union Stabilization Fund in 2017.

The Stabilization Fund was created in May 2009 to accrue the losses from five failed corporate credit unions and assess insured credit unions for such losses over time. NCUA is proposing to close the fund in 2017 now that its purpose has been fulfilled. Closing the Stabilization Fund would result in a distribution of all assets and liabilities to the Share Insurance Fund as required by law, according to a NCUA news release.

To facilitate the closure and ensure the Share Insurance Fund has sufficient equity to absorb potential losses on NCUA’s claims against the asset management estates, the NCUA board is proposing to raise the Share Insurance Fund’s equity ratio to 1.39% from its current 1.3% Comments regarding the plan are due by Sept. 5.

NCUA will hold a webinar on Aug. 9 to discuss NCUA’s proposed Stabilization Fund closure plan and answer stakeholder questions.

To read more about the proposal, click here.

 

More compliance news

Four individuals plead guilty in ATM skimming scheme

Four members of a scheme that used secret card-reading devices and pinhole cameras on PNC and Bank of America ATMs in New Jersey pleaded guilty July 11 to stealing at least $428,581, according to a news release from U.S. Immigration and Customs Enforcement. The guilty pleas stem from an investigation by ICE Homeland Security Investigations. The scammers illegally obtained customer account information, including account numbers and personal identification numbers. They also provided counterfeit ATM cards to other conspirators knowing they would use them to withdraw cash from compromised bank accounts at ATMs in New Jersey.

To read the full ICE news release, click here.

FTC updates COPPA compliance guide for businesses

The Federal Trade Commission recently released updated guidance for businesses on complying with the Children’s Online Privacy Protection Rule. The FTC’s updated COPPA Compliance Plan adds new business models, expands the products covered by the COPPA Rule, and explains new methods for obtaining parental consent.

To learn more about the updated compliance plan, click here.


About the author

John Roszkowski

Finance Editor John Roszkowski develops and edits content for OnCourse Learning’s financial services blog, which covers industry news and trends in mortgage, banking, compliance, credit unions, gaming and nonbank financial services. He has more than 25 years of writing and editing experience, having previously worked for weekly and daily newspapers.

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