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April 2013 | May 2013
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- CFPB Clarifies 2013 Escrows Final Rule, Issues Final List of Rural, Underserved Counties (5/20/13)
The Consumer Financial Protection Bureau on May 16 issued a final rule clarifying technical aspects of its escrow rule. CFPB also released a final list of rural and underserved counties to use in conjunction with the regulation. The escrow rule, which goes into effect June 1, generally extends the required duration for escrow accounts on higher-priced mortgage loans from one year to a minimum of five years. The rule exempts from its requirements such loans made by certain small creditors that operate predominately in rural or underserved counties included on the list. CFPB also announced that it is planning to issue a final rule on the ATR/QM and Servicing rules sometime in June. For questions, contact ABA's Krista Shonk.
- ABA: Revise Proposed Changes to CRA Q&As (5/17/13)
ABA recommended the banking agencies substantially revise proposed changes to the CRA Q&As. The FDIC, Federal Reserve and OCC suggested updating their guidance to encourage additional community development activities, but ABA questioned whether the changes would have the intended result. ABA was especially concerned about the proposal to ensure banks first address activities in their assessment area, pointing out that the language "in lieu of" would be far more likely to discourage banks from engaging in efforts outside their assessment area, contrary to what the agencies intended. ABA also strongly objected to a proposal that would treat community development negatively under some performance contexts and imply a duty to include community development lending as a mandatory part of lending test performance. ABA supported an agency proposal to make it easier to identify individuals and communities eligible for community development efforts and recommended favorable consideration for programs that supported USDA school lunch programs and Medicaid recipients. ABA also urged the agencies to be more flexible in permitting credit for investments in nationwide funds.
- CFPB Video Guides to Mortgage Rules (5/16/13)
The Consumer Financial Protection Bureau posted video presentations on the new mortgage rules it finalized in January. The videos, which include a one-hour overview video of all the rules as well as individual spots on each rule, are part of the Bureau's efforts to provide plain-language information that is accessible to a broad array of industry constituents, especially smaller businesses with limited legal and compliance staff.
- CFPB Debuts Spanish Language Website (5/16/13)
The Consumer Financial Protection Bureau launched a Spanish language website that provides access to consumer resources, including answers to 250 frequently asked questions. The answers are written in plain language by CFPB subject-matter experts and cover topics like paying for college, owning a home and sending money to another country.
- Semiannual Report to Congress Reviews Operations at CFPB and Board (5/13/13)
The Office of Inspector General (OIG) recently reviewed the programs and operations of the Consumer Financial Protection Bureau (CFPB) and the Board of Governors of the Federal Reserve System (Board). The Semiannual Report to Congress describes OIG’s accomplishments and ongoing audit, inspection and evaluation work from October 1, 2012–March 31, 2013.
- Student Loan Burden Poses 'Roadblocks,' CFPB Finds (5/10/13)
Student loan burdens may pose significant "roadblocks" to individual students' opportunity and the overall economy, the Consumer Financial Protection Bureau reported. The student loan burden — a total of $1.1 trillion outstanding, affecting 20 percent of U.S. households and 40 percent of households led by someone under 35 — might inhibit first-time homeownership, entrepreneurship and small business growth, retirement savings, and rural development (as debt-burdened individuals seek better-paying urban jobs), the Bureau said. The CFPB proposed three broad policy approaches to student debt: refinancing options for borrowers who are current with their payments, renegotiated payment terms for private loan borrowers in default, and options to restore creditworthiness to borrowers in default.
- CFPB Proposes Delay to Credit Insurance Premium Rule (5/10/13)
The Consumer Financial Protection Bureau has proposed a temporary delay of the section of its loan originator compensation rule that prohibits financing credit insurance premiums. While this rule, set to take effect June 1, prohibited adding a lump-sum premium to a mortgage loan amount at closing, some of the CFPB’s clarifying language in the preamble to the rule appeared to apply the prohibition to other kinds of transactions. ABA’s American Bankers Insurance Association subsidiary expressed concern that the language would affect the availability of credit insurance for consumers, and ABIA advocated for a pause to allow further comment. Comments are due by May 25, 2013.
- FinCEN Releases The SAR Activity Review: Trends, Tips & Issues and By the Numbers (5/9/13)
FinCEN's latest issue of The SAR Activity Review – Trends, Tips & Issues focuses on elder financial abuse. FinCEN saw a 382 percent increase in SAR filings of narratives containing “elder financial exploitation” and “elder financial abuse” between March 1, 2011 and August 31, 2012. This trend continued to increase more than a year and a half after FinCEN released Advisory to Financial Institutions on Filing Suspicious Activity Reports Regarding Elder Financial Exploitation in February 2011. Depository institutions reported the most common type of abuse was perpetrated by a relative or caregiver followed by "other suspicious activity types" – this includes identity theft, misuse of position or self-dealing, embezzlement/theft/disappearance of funds, check fraud, check kiting, and counterfeit debit/credit card. This issue also discusses human trafficking and the need for a FinCEN SAR check box on human trafficking. FinCEN also issued the Trends, Tips & Issues companion piece, The SAR Activity Review – By the Numbers. The latest report includes detailed data tables with geographic summaries at the county level to enhance State graphical displays (traditionally referred to as “heat maps”). Similarly, FinCEN is providing Metropolitan Statistical Area (MSA) summary tables of SAR data as well as spreadsheets illustrating filing rates and percentage changes for CY2011 & CY2012 Characterizations of Suspicious Activities by State & Territories.
- Report: Dodd-Frank Falls Harder on Community Banks (5/8/13)
The Dodd-Frank Act is making it harder for small businesses and people in rural areas and small towns to access financial services, an American Enterprise Institute report said. The report examined how community banks are faring under Dodd-Frank’s provisions. “Community banks were not responsible for the causes of the financial crisis determined by the authors of Dodd-Frank,” the report said. Yet, it found, banks with under $10 billion in assets are bearing a significant regulatory burden, particularly from Consumer Financial Protection Bureau rulemaking, Basel III capital requirements and mortgage lending rules.
- ABA Staff Analysis: Final Regulation Z Amendment Regarding "Ability to Pay" (5/8/13)
ABA on May 8 issued a Staff Analysis on the CFPB final rule making it easier for stay-at-home spouses and partners to receive credit cards in their own names. Members must login to download the Staff Analysis. Compliance with the rule is required by November 4, 2013. For questions, contact ABA's Nessa Feddis.
- ABA Staff Analysis: FDIC and OCC Proposed Guidance on Deposit Advance Products (5/8/13)
ABA on May 8 issued a Staff Analysis on the FDIC and OCC's proposed guidance on deposit advance products. Members must login to download the Staff Analysis. Comments on the proposed guidance are due May 30. For questions, contact ABA's Nessa Feddis.
- ABA Staff Analysis: Remittances Final Rule (5/6/13)
ABA on May 6 released guidance on the CFPB’s remittances final rule issued on April 30. Members must login to download the Staff Analysis. For questions, contact ABA’s Rob Rowe.
- ABA Comment Letter on CFPB Proposed Amendments to 2013 Escrows Final Rule under TILA (5/3/13)
ABA asked the Consumer Financial Protection Bureau to clarify its recently released compliance guide for the escrow rule for higher-priced mortgages, and to expand the rule's exemption for smaller banks. Based on comments from ABA members, ABA's letter asked the CFPB to clarify at what specific point an escrow account must be opened, and to specify whether the escrow requirement applies to loan modifications. ABA also asked the CFPB to expand the definitions of “rural” and “underserved” areas, which are the criteria for locales where banks are exempt from the escrow rule, as well as rules related to balloon payments and qualified mortgages.
- CFPB Issues 'Small Entity Compliance Guides' to Mortgage Rules (5/3/13)
The Consumer Financial Protection Bureau published Small Entity Compliance Guides to three of the Bureau’s recently finalized mortgage rules related to expanded Home Ownership and Equity Protections Act coverage, appraisals and appraisals for higher-risk mortgages. The guides are intended to provide an overview of the rules in a plain language and FAQ format so that the content is more accessible for a range of industry constituents, especially smaller businesses with limited legal and compliance staff. Read the guide for the HOEPA rule. Read the guide for the appraisals rule. Read the guide for the higher-risk mortgage appraisals rule.
- CFPB Modifies Remittance Rule with ABA-Suggested Changes (5/1/13)
The Consumer Financial Protection Bureau modified its final remittance rule, incorporating several changes that ABA and other trade groups requested in a January comment letter. The CFPB responded to ABA concerns by, among other things, extending the rule's compliance deadline by 180 days – to October 28, 2013 – twice the length of the originally proposed deadline. It also reduced institutions’ liability for losses due to sender’s errors. In addition, the CFPB made optional in certain circumstances a sending bank’s requirement to disclose fees that a recipient’s financial institution may charge. It also made it optional for the sending bank to disclose how much tax might be deducted before the funds reach the recipient. In place of these disclosures, the CFPB required a simple disclaimer that foreign taxes and recipient bank fees may apply. For questions, contact ABA’s Rob Rowe.
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