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CFPB Issues Policy Regarding Same-Sex Marriages

CFPB Director Richard Cordray recently issued a memorandum clarifying the CFPB’s policy with respect to same-sex marriages. The memorandum clarifies that the CFPB recognizes all lawful marriages that were valid at the time of the marriage in the jurisdiction where the marriage was celebrated.

Happy Holidays from the CFPB: 1,088 Pages of New Disclosure Rules that will Present Some Interesting Practical Problems for Implementing Banks

Just in time for the holidays, the CFPB gifted the banking industry another 1,088 pages of final mortgage disclosure rules. 

Changes Regarding Force-Placed Hazard Insurance

Along with the CFPB’s numerous other mortgage regulations, some regulations concerning force-placed hazard insurance are set to take effect on January 10, 2014. The new regulations, which can be found in 12 C.F.R. § 1024.37, dictate a specific procedure that must be followed before a servicer can charge a borrower for force-placed insurance.

Agencies Issue Disappointing Statement on Qualified Mortgage Fair Lending Risks

Earlier this year, I authored a client alert examining the potential implications of the CFPB’s new mortgage rules in light of HUD’s recent clarification on how it will apply the statistical disparate impact approach to fair housing enforcement. That article examines the potential conflict between the two rules and concludes that bankers who attempt in good faith to comply with the new mortgage rules by making only “Qualified Mortgages” will be at high risk for a fair housing / fair lending enforcement action.

Interagency Guidance Clarifies Banks’ Right to Report Financial Abuse of Elders

The Federal Reserve, CFPB, FDIC, OCC, SEC, NCUA, FTC, and CFTC recently issued Interagency Guidance to clarify that banks and other financial institutions are generally free to report suspected exploitation of elderly customers to government authorities without violating federal privacy provisions of the Gramm-Leach-Bliley Act.

CFPB Releases Final List of Rural and Underserved Counties for 2014

A number of the Consumer Financial Protection Bureau’s (“CFPB’s”) new mortgage rules contain exemptions or safe harbors for mortgage loans made by creditors that, during the preceding year, operated predominantly in “rural” or “underserved” counties or for mortgage loans made in “rural” counties. The CFPB has now released its 2014 final list of “rural” and “underserved” counties that may be used by banks to determine whether a county is “rural” or “underserved” during 2013, and accordingly, whether it will qualify for an exemption under the CFPB’s new mortgage rules in 2014. The CFPB has confirmed that banks may rely on this list as a safe harbor in determining whether a county is “rural” or “underserved” in a given calendar year.

Bankers Caught Between the Fair Lending Rock and the Credit Quality Hard Place

In the wake of the housing and foreclosure crisis, the United States Department of Justice (“DOJ”) and federal bank regulatory agencies have made fair lending enforcement a top priority. As a result, banks have become subject to severe examination criticism, enforcement actions and even civil actions alleging discrimination in loan pricing, particularly with respect to unsecured consumer loans. Banks have endured these harsh consequences, even where there was no evidence or even any allegation that the bank intended to discriminate. In response, many community banks have revised lending policies to eliminate virtually all loan officer discretion in the pricing of unsecured consumer loans, with the inevitable result that unsecured credit is generally less available to the very consumers that the fair lending laws were designed to protect.

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