CFPB Mortgage Rules Still Dominate Lenders' Compliance Concerns
May 21st, 2014 | by Jason Oliva Published in CFPB, News, Reverse Mortgage
Mandates and deadlines from the Consumer Financial Protection Bureau (CFPB) continue to be mortgage lenders’ top concerns for the third year in a row, according to QuestSoft’s eighth annual compliance survey.
CFPB’s Qualified Mortgage rule commanded the greatest share of lenders’ compliance qualms, with 62.2% of the more than 500 lenders surveyed saying this is a high concern.
Other Bureau rulings, including Ability-to-Repay violations and the combined Truth in Lending and Good Faith Estimate disclosure forms also ranked as high concerns, with 57.2% and 54.8% of lenders.
CFPB-related rule making has captured the top spot in the survey every year since 2012, which was also the first survey year available following the creation of the regulatory body.
Compared to last year’s survey, lenders appear more weary than ever of the CFPB’s rules, as non-CFPB issues are seen as increasingly lower priorities, stated Leonard Ryan, founder and president of QuestSoft.
Discussion points for proposed Home Mortgage Disclosure Act changes (57.5% high concern) and other CFPB-related rules (47.7% high concern) both outscored any non-CFPB category in the QuestSoft survey.
“It seems the message of the survey is that for many lenders, the mortgage environment has become highly dependent on the box of lending that the CFPB rules are creating,” Ryan stated.
The survey also indicated lenders have a growing concern regarding vendor management, with QuestSoft experiencing a four-fold increase in the cost of processing compliance requests.
“The timeframe in between regulatory rule announcements and implementation dates simply doesn’t allow enough leeway for lenders to rework processes and implement new technologies in order to achieve compliance,” said Ryan. “Lenders will continue to seek counsel and integrate with venerable compliance providers, in efforts to prepare for audits and meet industry compliance standards.”
The Laguna Hill, California-based QuestSoft provides automated compliance software and services to the mortgage, banking and credit union industries.
The company’s customer satisfaction survey has been conducted using the same methodology after each year’s Home Mortgage Disclosure Act reporting deadline since 2007. This year’s survey was based on lender responses collected between March 4-13.
May 21st, 2014 | by Jason Oliva Published in CFPB, News, Reverse Mortgage
Mandates and deadlines from the Consumer Financial Protection Bureau (CFPB) continue to be mortgage lenders’ top concerns for the third year in a row, according to QuestSoft’s eighth annual compliance survey.
CFPB’s Qualified Mortgage rule commanded the greatest share of lenders’ compliance qualms, with 62.2% of the more than 500 lenders surveyed saying this is a high concern.
Other Bureau rulings, including Ability-to-Repay violations and the combined Truth in Lending and Good Faith Estimate disclosure forms also ranked as high concerns, with 57.2% and 54.8% of lenders.
CFPB-related rule making has captured the top spot in the survey every year since 2012, which was also the first survey year available following the creation of the regulatory body.
Compared to last year’s survey, lenders appear more weary than ever of the CFPB’s rules, as non-CFPB issues are seen as increasingly lower priorities, stated Leonard Ryan, founder and president of QuestSoft.
Discussion points for proposed Home Mortgage Disclosure Act changes (57.5% high concern) and other CFPB-related rules (47.7% high concern) both outscored any non-CFPB category in the QuestSoft survey.
“It seems the message of the survey is that for many lenders, the mortgage environment has become highly dependent on the box of lending that the CFPB rules are creating,” Ryan stated.
The survey also indicated lenders have a growing concern regarding vendor management, with QuestSoft experiencing a four-fold increase in the cost of processing compliance requests.
“The timeframe in between regulatory rule announcements and implementation dates simply doesn’t allow enough leeway for lenders to rework processes and implement new technologies in order to achieve compliance,” said Ryan. “Lenders will continue to seek counsel and integrate with venerable compliance providers, in efforts to prepare for audits and meet industry compliance standards.”
The Laguna Hill, California-based QuestSoft provides automated compliance software and services to the mortgage, banking and credit union industries.
The company’s customer satisfaction survey has been conducted using the same methodology after each year’s Home Mortgage Disclosure Act reporting deadline since 2007. This year’s survey was based on lender responses collected between March 4-13.
CFPB Slams Ally Auto Lender with $98 Million Enforcement Action
December 22nd, 2013 | by Elizabeth Ecker Published in CFPB, News, Reverse Mortgage
The Consumer Financial Protection Bureau announced Friday its first-ever enforcement action for discriminatory lending practices in its action against indirect auto lender Ally.
The Bureau, in partnership with the Department of Justice, is ordering Ally to pay $98 million to address the company’s auto loan pricing structure, which the agencies allege has caused discrimination against more than 235,000 minority borrowers through “dealer markups,” or indirect lending channels.
“Too many consumers have had to pay more for their auto loans simply because of their race or other characteristics protected under the law,” said CFPB Director Richard Cordray in announcing the action. “Too often, these consumers do not know they are paying more or are simply unable to get recourse. Today’s action signals new attention to this serious problem.”
The action marks the first fair-lending action taken by the Bureau since its launch.
Under the order, Ally is required to pay $98 million toward resolution with the impacted borrowers and establish a new compliance framework. The company has also agreed to confer regularly with the CFPB in working to comply with fair lending law.
“We are committed to fair and equal access to credit for all consumers,” Cordray said. “In fact, it is one of our statutory responsibilities as a financial regulatory agency. Whether or not Ally consciously intended to discriminate makes no practical difference. In fact, we do not allege that Ally did so. Yet the outcome, and the harm to consumers, is the very same here.”
December 22nd, 2013 | by Elizabeth Ecker Published in CFPB, News, Reverse Mortgage
The Consumer Financial Protection Bureau announced Friday its first-ever enforcement action for discriminatory lending practices in its action against indirect auto lender Ally.
The Bureau, in partnership with the Department of Justice, is ordering Ally to pay $98 million to address the company’s auto loan pricing structure, which the agencies allege has caused discrimination against more than 235,000 minority borrowers through “dealer markups,” or indirect lending channels.
“Too many consumers have had to pay more for their auto loans simply because of their race or other characteristics protected under the law,” said CFPB Director Richard Cordray in announcing the action. “Too often, these consumers do not know they are paying more or are simply unable to get recourse. Today’s action signals new attention to this serious problem.”
The action marks the first fair-lending action taken by the Bureau since its launch.
Under the order, Ally is required to pay $98 million toward resolution with the impacted borrowers and establish a new compliance framework. The company has also agreed to confer regularly with the CFPB in working to comply with fair lending law.
“We are committed to fair and equal access to credit for all consumers,” Cordray said. “In fact, it is one of our statutory responsibilities as a financial regulatory agency. Whether or not Ally consciously intended to discriminate makes no practical difference. In fact, we do not allege that Ally did so. Yet the outcome, and the harm to consumers, is the very same here.”
The Ever Present Need for Effective and Proactive Vendor Oversight-FDIC Advisory
PUBLISHED ON OCTOBER 16, 2013 BY BRAD KELLER | POSTED IN: VENDOR OVERSIGHT
The FDIC Advisory Committee on Community Banking meeting in July 2013 included an extensive discussion of the responsibility of banks in ensuring their vendors consistently meet privacy and other information security regulations and requirements.1 One of the greatest takeaways from these committee sessions is that while regulators examine financial services vendors that contract for core bank services or other third party services that are covered under the Bank Service Company Act, they are not allowed to make direct report of findings to the banks that contract with these vendors.2 The Committee advised that bank’s need to do more due diligence to determine that their vendors are capable of meeting their compliance obligations adding additional auditing of their third party relationships.
The serious need for more effective due diligence is evidenced by the 2011 case of a hacker break in at Fidelity National Information Services (FIS). FIS reportedly found no red flags through its due diligence, but ultimately had a significant data breach. The recent (June 2013) disclosure that this breach was far more extensive than FIS had previously revealed “highlights a shocking lack of basic security protections throughout one of the nation’s largest financial services providers.”3 Given that FIS provides a range of services to more than 14,000 financial institutions in over 100 countries, the impact of this breach is quite significant.According to the Advisory Committee on Community Banking, financial institutions can be more effective and proactive ensuring vendors identify and address security gaps by becoming more thorough in their monitoring procedures by:
PUBLISHED ON OCTOBER 16, 2013 BY BRAD KELLER | POSTED IN: VENDOR OVERSIGHT
The FDIC Advisory Committee on Community Banking meeting in July 2013 included an extensive discussion of the responsibility of banks in ensuring their vendors consistently meet privacy and other information security regulations and requirements.1 One of the greatest takeaways from these committee sessions is that while regulators examine financial services vendors that contract for core bank services or other third party services that are covered under the Bank Service Company Act, they are not allowed to make direct report of findings to the banks that contract with these vendors.2 The Committee advised that bank’s need to do more due diligence to determine that their vendors are capable of meeting their compliance obligations adding additional auditing of their third party relationships.
The serious need for more effective due diligence is evidenced by the 2011 case of a hacker break in at Fidelity National Information Services (FIS). FIS reportedly found no red flags through its due diligence, but ultimately had a significant data breach. The recent (June 2013) disclosure that this breach was far more extensive than FIS had previously revealed “highlights a shocking lack of basic security protections throughout one of the nation’s largest financial services providers.”3 Given that FIS provides a range of services to more than 14,000 financial institutions in over 100 countries, the impact of this breach is quite significant.According to the Advisory Committee on Community Banking, financial institutions can be more effective and proactive ensuring vendors identify and address security gaps by becoming more thorough in their monitoring procedures by:
- 1. Requesting reports from their vendors on all audits and examinations on an ongoing basis
- 2. Carefully and regularly reviewing reports.
- 3. Ensuring that contract language covers all regulations and requirements that vendors must meet to allow institutions to remain in compliance at all times.
- Establishing a company-wide culture of dedicated, forward thinking due diligence.
- Establishing a contracting process that includes automated audit request and reporting review.
- Training all employees on security and privacy issues and processes.
- Reinforcing training with ongoing awareness emails and other postings.
