Banking and Consumer Finance Law

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Banking & Finance Law Daily
  • March 20, 2017

    The Dodd-Frank Act provision allowing the Consumer Financial Protection Bureau’s director to be removed only for cause is unconstitutional, but the CFPB should not be eliminated, according to the Department of Justice. In an  amicus curiae  brief  filed in  PHH Corp. v. CFPB , Justice argues that the for-cause termination restriction violates the Constitution’s separation of powers principles but that...

  • March 17, 2017

    The House Financial Services Subcommittee on Monetary Policy and Trade has held a hearing to check in on the Federal Reserve’s treatment of monetary policy. The subcommittee hearing, " Sound Monetary Policy ," is intended to determine whether the Fed has departed from conventional monetary policy, how the Fed can facilitate an orderly return to a conventional balance sheet, and...

  • March 16, 2017

    In the recently released budget blueprint to "Make America Great Again," the White House is proposing that the Treasury Department be granted $12.1 billion in discretionary resources. This proposal is a $519 million or 4.1 percent decrease from the 2017 levels. Specifically, the White House’s  budget  is proposing to: preserve key operations of the Internal Revenue Service, while diverting resources...

  • March 15, 2017

    The Office of the Comptroller of the Currency is continuing in the direction of granting special purpose national bank charters to financial technology companies by proposing a supplement to its  Licensing Manual . Although the OCC does not ordinarily ask for comments on its manuals, it says it has done so in this case in the interest of "fostering open...

Dodd-Frank News
  • March 21, 2017

    This story appeared in Bank Digest. The Consumer Financial Protection Bureau has released a new guide to help frontline staff working with justice-involved individuals address some of the specific financial challenges these individuals may face. The bureau noted that consumer financial issues are a key concern for many people transitioning...

  • March 21, 2017

    This story appeared in Bank Digest. The Office of Inspector General for the Consumer Financial Protection Bureau and the Federal Reserve Board has issued a report to assess whether the CFPB effectively identifies and avoids the risk of potential conflicts of interest for vendors supporting the work of the bureau's...

  • March 20, 2017

    This story appeared in Bank Digest. House Financial Services Committee Chairman Jeb Hensarling (R-Texas) has issued a statement on the Justice Department's decision to oppose the Consumer Financial Protection Bureau in a case challenging the constitutionality of the bureau's structure. Hensarling said that the CFPB is "arguably the most powerful...

Banking and Finance Law Blog
  • March 23, 2017

    By Stephanie K. Mann, J.D.
      

    The Consumer Financial Protection Bureau has ordered Nationstar Mortgage LLC to pay a $1.75 million civil penalty for violating the Home Mortgage Disclosure Act by consistently failing to report accurate data about mortgage transactions for 2012 through 2014. The enforcement action is the largest HMDA civil penalty imposed by the bureau to date, which stems from Nationstar’s market size, the substantial magnitude of its errors, and its history of previous violations, said the bureau’s press release
     
    “Financial institutions that violate the law repeatedly and substantially are not making serious enough efforts to report accurate information,” said CFPB Director Richard Cordray. “Today we are sending a strong reminder that HMDA serves important purposes for many stakeholders in the mortgage market, and those required to report this information must make more careful efforts to follow the law.”
     
    Compliance requirements. Nationstar, a nationwide nonbank mortgage lender headquartered in Coppell, Texas, is a wholly owned subsidiary of Nationstar Mortgage Holdings Inc. The Home Mortgage Disclosure Act of 1975 requires many mortgage lenders to collect and report data about their mortgage lending to appropriate federal agencies and make it available to the public. Federal regulators, enforcement agencies, community organizations, and state and local agencies can use the information to monitor whether financial institutions are serving housing needs in their communities. 
     
    In its supervision process, the CFPB found that Nationstar’s HMDA compliance systems were flawed, and generated mortgage lending data with significant, preventable errors. Nationstar also failed to maintain detailed HMDA data collection and validation procedures, failed to implement adequate compliance procedures, and produced discrepancies by failing to consistently define data among its various lines of business. In the samples reviewed, the CFPB found error rates of 13 percent in 2012, 33 percent in 2013, and 21 percent in 2014.
     
    Order. The CFPB’s order requires Nationstar to:
    • pay a $1.75 million penalty;
    • develop and implement an effective compliance management system; and
    • fix HMDA reporting inaccuracies.
    Since the CFPB’s examination, Nationstar has been taking further steps to improve its HMDA compliance management system and increase the accuracy of its HMDA reporting, as detailed in its Form 10-K to the Securities and Exchange Commission. 
     
    For more information about mortgage loan reporting, subscribe to the Banking and Finance Law Daily.

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