Source: https://www.jackscomplianceresource.com/2013/09/
Timestamp: 2018-05-21 22:35:13
Document Index: 16425962

Matched Legal Cases: ['§ 1024', '§ 1024', '§ 1024', '§ 1026', '§ 1026', '§ 1026']

Jack's Compliance Resource | 2013 September
MORE FINAL REVISED RULES – REGULATIONS B, X, AND Z
this entry has 0 Comments/	in CFPB, Dodd-Frank Act, ECOA, Financial Reform, Lending Compliance, Regulation B, Regulation X, Regulation Z, RESPA, Truth in Lending / by afaust
On September 13 the Consumer Financial Protection Bureau published it latest revisions to final rules that were published last January. The 274-page final rule:
Revises error resolution procedures and information requests (§§ 1024.35 and 1024.36), and loss mitigation (§ 1024.41). With respect to loss mitigation, two of the revisions concern the requirement in § 1024.41(b)(2)(i) that a servicer review a borrower’s loss mitigation application within five days and provide a notice to the borrower acknowledging receipt and informing the borrower whether the application is complete or incomplete. If the servicer does not deem the application complete, the servicer’s notice must also list the missing items and suggest the borrower provide the information by the earliest remaining of four dates specified in the regulation. The changes replace the four specified dates with a requirement that a servicer give a borrower a reasonable date by which the borrower should in which to provide the missing information.
Clarifies the treatment of charges paid by parties other than the consumer, including third parties, for purposes of the points and fees thresholds.
Extends an exception to the general prohibition on balloon features for high-cost mortgages under § 1026.32(d)(1)(ii)(C) to allow all small creditors, regardless of whether they operate predominantly in “rural” or “underserved” areas, to continue originating balloon high-cost mortgages if the loans meet the requirements for qualified mortgages under §§ 1026.43(e)(6) or 1026.43(f).
Amends an exemption from the requirement to establish escrow accounts for higher-priced mortgage loans under § 1026.35(b)(2)(iii)(A) for small creditors that extend more than 50 percent of their total covered transactions secured by a first lien in “rural” or “underserved” counties during the preceding calendar year. To prevent creditors that qualified for the exemption in 2013 from losing eligibility in 2014 or 2015 because of changes in which counties are considered rural while the Bureau is re-evaluating the underlying definition of “rural,” the Bureau is amending this provision to allow creditors to qualify for the exemption if they extended more than 50 percent of their total covered transactions in rural or underserved counties in any of the previous three calendar years (assuming the other criteria for eligibility are also met).
Clarifies the definition of loan originator under Regulation Z. such as provisions addressing when employees of a creditor or loan originator in certain administrative or clerical roles (e.g., tellers or greeters) may become “loan originators” and thus subject to the rule, upon providing contact information or credit applications for loan originators or creditors to consumers.
Clarifies what constitutes financing of credit insurance premiums by a creditor.
Clarifies when credit insurance premiums are considered to be calculated and paid on a monthly basis, for purposes of the statutory exclusion from the prohibition for certain credit insurance premium calculation and payment arrangements.
Clarifies when including the credit insurance premium or fee in the amount owed violates the rule.
Changes the effective date for certain provisions under the 2013 Loan Originator Compensation Final Rule, so they take effect on January 1, 2014, rather than January 10, 2014, as originally provided.
this entry has 0 Comments/	in Civil Monetary Penalties, Electronic Fund Transfer Act, FDIC, Lending Compliance, Regulation E, UDAAP / by afaust
Case 1 – In late July an Indiana bank was assessed a $70,000 penalty for engaging in unfair and deceptive acts or practices by the imposition of requirements on consumers in the resolution of electronic transfer errors which were more onerous than those set forth in Regulation E, thereby effectively delaying, denying or discouraging error resolution claims.
Case 2 – In mid-July a bank located in Kentucky was assessed a $100,000 penalty for engaging in unfair and deceptive acts or practices in that the Bank’s practice of collecting putative debts from non-deposit holding consumers, who attempted to cash checks with the Bank, through the confiscation of check proceeds without the consumer’s consent and without proper legal process was both unfair and deceptive. In addition, the Bank’s practice of distributing electronic fund transfer disclosures to consumers, which contained liability protections and specific procedures for resolving electronic transfers disputes and were consistent with the requirements of Regulation E, but then failing to abide by the disclosure terms including the regulatory standards, was found to be deceptive under Section 5.
Banks throughout the Chicago region of the FDIC have been reporting that examiners have been spending an inordinate amount of time on Regulation E, specifically on Regulation E error resolution procedures. We have previously reported the Chicago Regional Office’s push to consider every violation as a UDAAP violation. So, nothing about this result is a surprise.
All banks, especially those that are state non-member banks located in the Chicago region, should take a close look at their error resolution procedures. Many banks have been frustrated by fraudulent error claims by consumers and the resulting losses suffered by their banks. The deck is stacked against the bank on this issue, but banks must play the game by the rules.