Financial Services, Insurance & Reinsurance – The latest on mortgage rules, FDIC, CFPB, and more.
A substantial portion of Director Cordray’s
remarks yesterday at the American Bankers Association’s Annual Convention in New Orleans was directed at justifying the Bureau’s decision not to delay the January 2014 effective dates of the new mortgage rules. Mr. Cordray reminded bankers that if the CFPB had failed to complete the rules, most of Title XIV of Dodd-Frank “would have taken effect in its own right in January 2013″ and they “already would have been living under those provisions for quite some time with no guidance to resolve ambiguities and subject to whatever interpretations the courts might eventually arrive at through litigation.”… [
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The Federal Deposit Insurance Corporation (FDIC) recently released a letter clarifying its policy and supervisory approach for financial institutions that provide services to payment processors who, in turn, provide services to merchants engaged in high risk activities. In summary, the brief letter assures FDIC-supervised banks and savings associations that relationships with such payment processors are neither prohibited or discouraged as long as the financial institution conducts the risk assessments and due diligence necessary to determine that the processor’s merchants are operating their businesses in accordance with applicable law. The FDIC reminds financial institutions to remain engaged in the oversight of merchant activities as necessary to mitigate the risks and provide assurance to the financial institution that it is not supporting illegal or fraudulent activities… [
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As reported
last week, the CFPB
has decided to stop sending enforcement attorneys to routine examinations of financial institutions effective November 1. In a
recent interview, CFPB Deputy Director Steven Antonakes said that the decision followed an “assess[ment of] the effectiveness and efficiency of the operation” over the past two years. He clarified that the presence of enforcement attorneys was “absolutely not” intended to intimidate supervised institutions but rather reflected the CFPB’s ongoing efforts to ensure “strong communication” between supervision and enforcement teams throughout the examination process… [
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U.S. regulators on Tuesday said they do not expect lenders to run afoul of fair-lending laws if they opt to issue only the most basic mortgages after tough new rules take effect in 2014. The Consumer Financial Protection Bureau plans to begin enforcing a rule in January that requires mortgage lenders to verify borrowers can repay their loans. Many
banksRead More said they would comply at first by making only the least risky loans, also known as “qualified mortgages.”… [
Read More]
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