Consumer Financial Services Law Blog
Dykema Gossett PLLC
Dykema Gossett PLLC

Consumer Financial Services Law Blog

Consumer Financial Services Law Blog

News and analysis regarding Consumer Financial Services litigation and regulation, and activities of the Consumer Financial Protection Bureau


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Showing 15 posts in Office of Comptroller of Currency.

Agencies Address Fair Lending Concerns of Industry and Indicate that ECOA, Ability-to-Repay Rule Compatible

In an October 22, 2013 statement released by the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the National Credit Union Administration (collectively, “the Agencies”), the Agencies addressed the impact of the new Ability-to-Repay Rule, which takes effect in January 2014, on the Equal Credit Opportunity Act (ECOA). Specifically, the Agencies provided guidance regarding whether creditors would be liable under the disparate impact doctrine of ECOA (one of the methods of proving lender discrimination) if the creditors chose to only originate Qualified Mortgages (QMs) under the Ability-to-Repay Rule. As you might suspect, the Agencies indicated that the requirements of the Ability-to-Repay Rule and ECOA are compatible. Read More ›

RBS Reaches $14 Million Settlement With Regulators: Why Preparing for Regulatory Examinations Matters

The OCC and FDIC announced they reached a settlement with two subsidiaries of the RBS Group over allegations of inaccurate or misleading disclosures involving the banks' overdraft protection programs, checking rewards program, and recurring electronic fund transfers. The alleged violations took place between September 2007 and September 2011 and were purportedly discovered  during regulatory examinations, which highlights the importance of conducting regular internal examinations to identify and address any potential issues. Read More ›

Second Wave Independent Foreclosure Review Payments In The Mail

As readers of the CFS-Lawblog know, the OCC announced at the beginning of this week that the first wave of checks from the “independent foreclosure review” had been sent consumers. Now the OCC is announcing that the “second wave of 1.4 million checks totaling $1.2 billion was sent on April 18, 2013. This brings the total number of checks sent consumers 2.8 million worth $2.4 billion. The OCC expects that remaining checks—approximately 1.4 million checks totaling $1.2 billion—will be sent to consumers by “mid-summer.”. The OCC is also reporting that, as of April 18, 2013, 434,484 checks totaling nearly $419 million were cashed or deposited.  The OCC did not indicate whether those amounts include the checks that failed to clear some customer accounts. According to the OCC’s  Independent Foreclosure Review Disbursement Breakdown the eligible borrowers will receive between $300 and $125.000 with most consumers receiving $500 to $600 dollars. Stay tuned to the CFS-Lawblog as we continue to follow this story. Read More ›

OCC: "The Check's In The Mail" For Independent Foreclosure Review Recipients

Although it will be barely a trickle of the amount spent on the consultants themselves, money has started to flow from the “independent foreclosure review” imposed on banks subject to OCC consent orders.  According to the OCC, about $50 million has already been cashed or deposited by approximately 50,000 mortgage customers supposedly wronged by the subject banks.    But, according to some reports some of the checks (mailed from accounts managed by the Rust consulting firm) have failed to clear some customer accounts, adding figurative insult to the supposed injury these checks are intended to reimburse.  Stay tuned.

Williams & Connolly FOIA Suit: How Did OCC Influence Selection of Independent Foreclosure Firms?

On the heels of press reports critical of firms that conducted the independent foreclosure review, and those suggesting that one of those firms has become as powerful as a “shadow regulator,” the law firm of Williams & Connolly has just filed a Freedom of Information Act (FOIA) lawsuit against the OCC, demanding access to communications and directives that may have influenced the selection of firms that ultimately reaped almost $2 billion in fees from a process that was perceived as so flawed that Ben Bernanke personally apologized.  Stay tuned.

Lies, Damn Lies And Statistics: OCC Says Foreclosures At Four-Year Low. The End Of The Cycle Or Just A Mirage?

In a March 27 report on first-lien mortgages, the Office of the Comptroller of the Currency (OCC) likewise announced that in-process residential foreclosures had fallen below one million at the end of 2012, the lowest number since June 2009.  In fact, nationwide, servicers initiated just 156,773 foreclosures in the fourth quarter.  So what triggered the steep decline?  The OCC attributes the drop to "strengthening economic conditions, the ongoing effects of both home retention efforts and home forfeiture actions, and servicing transfers to institutions outside the federal banking system."  It is the last part of the sentence that deserves your attention:  Yes, defaulted loans are being transferred outside the federal banking system at a remarkable pace, as non-depository servicers grab an increasing share of the mortgage service market.  By way of example, the recent purchase by Quicken Loans of $34 billion in MSR's from Ally will result in a further drop in the OCC's foreclosure stats.   This follows Ally's previously-announced sale of $90 billion in MSR's to Ocwen.   Stay tuned.

FFIEC Proposes Social Media Guidance

Last week, the Federal Financial Institutions Examination Council (“FFIEC”) issued proposed risk management guidance regarding the use of social media by financial institutions, including banks, credit unions, and non-bank entities supervised by the Consumer Financial Protection Bureau (CFPB). The proposed guidance calls on these institutions to develop and maintain risk management programs to identify, measure, monitor, and control the risks of social media. The proposed guidance, according to the FFIEC is intended to assist financial institutions identify, oversee and manage the potential risk associated with the use of social media to attract and interact with customers. The guidance is also intended to assist these institutions in addressing the applicability of existing federal consumer protection laws and regulations that may be implicated by the use of social media. Read More ›

FFIEC Proposes Social Media Guidance

Last week, the Federal Financial Institutions Examination Council (“FFIEC”) issued proposed risk management guidance regarding the use of social media by financial institutions, including banks, credit unions, and non-bank entities supervised by the Consumer Financial Protection Bureau (CFPB). The proposed guidance calls on these institutions to develop and maintain risk management programs to identify, measure, monitor, and control the risks of social media. The proposed guidance, according to the FFIEC is intended to assist financial institutions identify, oversee and manage the potential risk associated with the use of social media to attract and interact with customers. The guidance is also intended to assist these institutions in addressing the applicability of existing federal consumer protection laws and regulations that may be implicated by the use of social media. Read More ›

OCC: Deal with Servicers Provides $3.3 Billion in Payments, $5.2 Billion in Mortgage Assistance

The Office of the Comptroller of the Currency (OCC) announced January 7, 2013 that ten mortgage servicing companies have reached an agreement in principle with the OCC and the Federal Reserve Board to pay more than $8.5 billion in cash payments and other assistance to certain borrowers.  There will be $3.3 billion in direct payments to eligible borrowers and $5.2 billion in “other assistance,” which includes loan modifications and forgiveness of deficiency judgments.  The payments involve mortgage servicers operating under enforcement actions issued in April 2011 by the OCC, the Federal Reserve, and the Office of Thrift Supervision (which ceased to exist in October 2011).  According to the OCC, more than 3.8 million borrowers whose homes were in foreclosure in 2009 and 2010 will receive cash compensation. The amount of compensation, says the OCC, will vary from “hundreds of dollars up to $125,000,” depending on the type of alleged error.  Covered by the agreement are Aurora, Bank of America, Citibank, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo.  With the agreement, the Independent Foreclosure Review previously mandated by regulators will come to a close.  The OCC indicates that the review will be replaced by a “framework” for expedited borrower compensation.  Stay tuned to the CFS-Lawblog as we follow this developing story.

Ninth Circuit on High-Low Postings: National Bank Act Preempts California’s Unfair Competition Law as to Transaction Posting Practices but not as to Misrepresentation of Transaction Posting Methods

In Gutierrez v. Wells Fargo, --- F.3d ----, 2012 WL 6684748 (9th Cir. Dec 26, 2012), the Ninth Circuit has recently held that the federal National Bank Act  “preempts state regulation of transaction posting practices and any obligation for national banks to make specific, affirmative disclosures to their customers.”  A national bank’s decision to post payments to checking accounts in a particular order “is a federally authorized pricing decision” which “is within the exclusive purview of the [Office of the Comptroller of the Currency (OCC)]”.  Accordingly, federal law preempts state law that “prevents or significantly interferes with a national bank’s federally authorized power to choose a posting order,” including California’s Unfair Competition Law (UCL) with respect to “unfair” business practices. Read More ›