May 2014 – Consumer Financial Services Watch

K&L Gates Legal Insight: Individual Liability in CFPB Enforcement Proceedings

May 28 2014

To date, the CFPB has brought 12 cases—out of more than three dozen total CFPB enforcement cases—in which it named individuals as defendants or respondents liable for violations of consumer protection statutes. Below, we consider the standards for individual liability in CFPB cases, the actual cases that have been brought, and 10 lessons that can be drawn from these cases.

To read the full alert, click here.

Fannie Mae and Freddie Mac Revise Servicing Transfer Requirements

May 16 2014

By: Eric J. Edwardson

There has been considerable recent discussion in the mortgage servicing industry regarding the increasing hurdles to transfers of residential mortgage servicing rights. Those hurdles include additional scrutiny from the Consumer Financial Protection Bureau, Federal Housing Finance Agency, and state regulators. In the past week, each of Fannie Mae and Freddie Mac have issued updates to their servicing transfer requirements moving up the due dates for requests for approvals of servicing transfers, making it more difficult to consummate quick transfers. The new requirements don’t create new standards for approval of transfers of Fannie Mae and Freddie Mac servicing rights, but they do add a bit more procedural difficulty for such transfers. Read More

VA Issues Interim Final Rule Defining Qualified Mortgages

May 12 2014

By: Jonathan D. Jaffe, Eric Mitzenmacher

On May 9, the United States Department of Veterans Affairs (“VA”) issued an interim final rule defining which VA-guaranteed and VA-originated loans will have qualified mortgage (“QM”) status under the Truth-in-Lending Act’s (“TILA’s”) Ability to Repay (“ATR”) rule. Read More

CFPB Releases Fair Lending Report to Congress

May 05 2014

By: Melanie Brody, Anjali Garg*

*Ms. Garg is a Law Clerk and is not admitted to practice law.

CFPB (the “Bureau”) released a report to Congress on its fair lending activities on April 30, 2014. The report highlights the activities of the Office of Fair Lending and Equal Opportunity from July 21, 2012 through December 31, 2013. It provides an overview of the Bureau’s supervision activities and highlights the data collection activities of the Bureau in the areas of mortgage lending, auto finance, and other credit markets. The report explains how the Bureau uses its complaint database, along with regular supervision programs, in order to prioritize its fair lending activities. It also highlights recent CFPB bulletins on indirect auto lending and HMDA reporting.

CFPB Proposes “Points and Fees” Cure for Qualified Mortgages

May 02 2014

By: Kristie D. Kully, Eric Mitzenmacher

The Consumer Financial Protection Bureau issued a proposed rule requesting public comments on several amendments to its recent mortgage regulations under the Truth in Lending Act (“TILA,” as amended by the Dodd Frank Act). One of those amendments would, if finalized, allow creditors a limited opportunity to “cure” a loan that inadvertently exceeds the three percent limit on points and fees for qualified mortgages (“QMs”). Read More

Archive:May 2014