ABA Dodd-Frank Tracker

The Week Ahead: May 20 - May 24

2013-05-17T10:50:00.000-04:00

Tuesday

Hearing House Financial Services: "Qualified Mortgages: Examining the Impact of the Ability to Repay Rule" Read more.
Hearing Senate Banking Committee: "The Financial Stability Oversight Council Annual Report to Congress” Read more.

Wednesday

Hearing Full Committee: “Who is Too Big to Fail: Are Large Financial Institutions Immune from Federal Prosecution?" Read more.
Hearing Oversight and Investigations Committee: “The Annual Report of the Financial Stability Oversight Council” Read more.

All times in Eastern Standard Time. See future events on the Dodd-Frank Calendar.

Join us at the 2013 ABIA Annual Conference
The 2013 ABIA Annual Conference is the only national event devoted exclusively to the issues and concerns of the bank-insurance industry. Our 2013 conference will offer numerous networking opportunities with industry peers and top providers.Read more and join us!

CFPB Published Final List of 2013 Rural and Underserved Counties

2013-05-17T10:15:00.003-04:00

The CFPB has issued a final rule clarifying and making technical amendments to the 2013 Escrows Final Rule.

The final rule clarifies how to determine whether or not a county is considered “rural” or “underserved” for purposes of applying an exemption in the 2013 Escrows Final Rule and special provisions adopted in three other Dodd-Frank Act mortgage rules issued by the CFPB in January. The CFPB has used the changes to compile the final 2013 rule or underserved counties list.

Find the full list here.

The final rule also establishes a temporary provision to ensure existing protections remain in place for higher-priced mortgage loans until the expanded provisions take effect in January 2014.

In addition, the CFPB issued a proposed rule with clarifications and updates to the ATR/QM and Servicing rules from January. The Bureau noted it plans to issue a final rule based on that proposal in June.

Read more.

CFPB Posts Video Guides to Mortgage Rules

2013-05-16T07:56:00.002-04:00

The CFPB yesterday posted video presentations on the new mortgage rules it finalized in January. The videos, which include a one-hour overview video of all the rules as well as individual spots on each rule, are part of the bureau’s efforts to provide plain-language information that is accessible to a broad array of industry constituents, especially smaller businesses with limited legal and compliance staff.

View the videos.

Cordray: QM Rules Cover Vast Majority of Loans But Not All

2013-05-15T09:54:00.003-04:00

Richard Cordray, Director of the CFPB, spoke to the National Association of Realtors reading the Bureau’s work in the mortgage market. On the topic of the CFPB’s qualified mortgage rules, Cordray stated:

Qualified Mortgages cover the vast majority of loans made in today’s market, but they are by no means all of the mortgage market. This point is quite important, and it should not be misunderstood. Those lenders that have long upheld strong underwriting standards have little to fear from the Ability-to-Repay rule…Nothing about their traditional lending model has changed, and they should continue to offer such mortgages to borrowers whom they evaluate as posing reasonable credit risk – whether or not they meet the criteria to be classified as Qualified Mortgages.

Read full prepared remarks.

Fed Governor: QM May Reduce Credit for Some Homebuyers

2013-05-10T07:38:00.002-04:00

Aspects of the ability-to-repay rule and "qualified mortgage" standards may make credit access difficult for homebuyers with low credit scores, including many low-income and first-time homebuyers, said Federal Reserve Board Governor Elizabeth Duke.

For example, she said, lenders usually compensate for risk by charging higher rates, points and fees. But, she added, "if lenders originate a first-lien QM with an annual percentage rate that is 150 basis points or more above the rate available to the highest-quality borrowers, lenders receive less protection against lawsuits claiming violation of the ability-to-repay and QM rules."

"The extent to which these rules regarding rates, points and fees will damp lender willingness to originate mortgages to borrowers with lower credit scores is still unclear," Duke concluded.

Read the speech.

Fannie, Freddie to Limit Future Loan Purchases to Qualified Mortgages

2013-05-06T15:44:00.001-04:00

The Federal Housing Finance Agency (FHFA) announced today that it is directing Fannie Mae and Freddie Mac to limit their future mortgage acquisitions to loans that meet the requirements for a qualified mortgage, including those that meet the special or temporary qualified mortgage definition, and loans that are exempt from the “ability to repay” requirements under the Dodd-Frank Act.

In January, the CFPB issued a final rule implementing the “ability to repay” provisions of Dodd-Frank, including certain protections from liability for loans that meet the criteria of a qualified mortgage as outlined in the rule.

Beginning January 10, 2014, Fannie Mae and Freddie Mac will no longer purchase a loan that is subject to the “ability to repay” rule if the loan:

is not fully amortizing,
has a term of longer than 30 years, or
includes points and fees in excess of three percent of the total loan amount, or such other limits for low balance loans as set forth in the rule.

ABA Staff Analysis on CFPB’s Remittance Rule

2013-05-06T12:10:00.000-04:00

ABA has posted a staff analysis of the Consumer International Wire Transfers Final Remittances Rule issued by the CFPB on April 30.

The CFPB recently modified the final remittance rule, incorporating several changes that ABA and other trade groups had requested. The modifications eliminate the requirement to disclose third-party fees and foreign taxes and cease holding institutions liable for a sender’s mistake when the sender provides an incorrect account number or incorrect bank identifier.

The new remittance rule will be effective October 28, 2013.

Read the ABA Staff Analysis.

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ABA Asks CFPB to Clarify Escrow Rule, Expand Exemption Definitions

2013-05-06T08:31:00.000-04:00

ABA asked the CFPB to clarify its recently released compliance guide for the escrow rule for higher-priced mortgages, and to expand the rule's exemption for smaller banks.

Based on comments from ABA members, ABA's letter asked the CFPB to clarify at what specific point an escrow account must be opened, and to specify whether the escrow requirement applies to loan modifications.

ABA also asked the CFPB to expand the definitions of “rural” and “underserved” areas, which are the criteria for locales where banks are exempt from the escrow rule, as well as rules related to balloon payments and qualified mortgages.

Read the letter.

CFPB Issues ‘Small Entity Compliance Guides’ to Mortgage Rules

2013-05-03T07:46:00.002-04:00

The CFPB has published Small Entity Compliance Guides to three of recently finalized mortgage rules related to expanded Home Ownership and Equity Protections Act coverage, appraisals and appraisals for higher-risk mortgages.

The guides are intended to provide an overview of the rules in a plain language and FAQ format so that the content is more accessible for a range of industry constituents, especially smaller businesses with limited legal and compliance staff.

Read the guide for the HOEPA rule.
Read the guide for the appraisals rule.
Read the guide for the higher-risk mortgage appraisals rule.

FDIC to Hold Teleconferences on Mortgage Reform Rules

2013-04-26T08:14:00.002-04:00

The FDIC will hold nationwide banker teleconferences -- focused on the CFPB’s mortgage reform regulations -- on May 2, May 15 and June 6.

The first call will focus on the ability-to-repay/QM rule, the new escrow requirements and the loan originator compensation rule. The second call will address mortgage servicing. The final call will focus on the additional aspects of the loan originator compensation rule and the HOEPA amendments.

The FDIC encourages institutions to submit questions on teleconference topics in advance of the calls.

Read more.

ABA to Congress: It’s Time to Move from Good Intentions to Tangible Results for Community Banks

2013-04-16T13:53:00.000-04:00

The ABA testified on the critical steps needed to reduce community banks’ regulatory burden and assure our country has a healthy and vibrant community banking sector in the future.

Kenneth Burgess, chairman of FirstCapital Bank of Texas, testified on behalf of ABA before the House Subcommittee on Financial Institutions and Consumer Credit. FirstCapital is a $713 million bank serving Midland, Amarillo and Lubbock, Texas.

In his testimony, Burgess said that it’s time to move from good intentions to substantive changes that will have tangible results for community banks. He noted that recent actions taken by regulators on capital standards and mortgage lending can have unintended consequences that slow economic growth.

Read more.

Groups Ask CFPB for Mortgage Rule Clarifications, Extensions

2013-04-11T08:43:00.001-04:00

ABA and three other trade groups have urged the CFPB to quickly publish much-needed clarifications on its new mortgage-related rules and to extend the rules’ compliance deadlines.

The trade groups emphasized in a letter to bureau Director Richard Cordray that they are repeating their urgent request that the CFPB use its exemption authority to extend the mortgage rules’ compliance deadline from 12 months to 18 to 24 months.

Without more time to comply, we are concerned certain lenders may choose to mitigate the resulting operational risks by reducing, or even eliminating, their mortgage lending activities. This will be devastating to the industry and reduce mortgage loan options for consumers at a time when all agree there should be an increase in responsible mortgage lending.

The trade groups also explained the importance of receiving clarifications on the rules as quickly as possible.

Read the letter.

FDIC Offers Free Teleconferences on CFPB Mortgage-Related Rules

2013-04-10T09:12:00.000-04:00

The FDIC’s Division of Depositor and Consumer Protection will host three free teleconferences in May and June on mortgage-related rules the CFPB has issued in recent months.

The first teleconference -- 2-3:30 p.m. EDT on May 2 -- will review CFPB final rules on the ability to repay, qualified mortgage standards and escrow accounts, along with loan originator compensation requirements involving the prohibition on mandatory arbitration clauses and single premium credit insurance.

The second teleconference -- 2-3:30 p.m. EDT on May 15 -- will focus on the bureau’s mortgage-servicing final rule, while the third event -- 2-3:30 p.m. EDT on June 6 -- will cover the CFPB’s final rules on loan originator compensation and Home Ownership and Equity Protection Act expansion.

Registration is required for all teleconferences.

Read more.
Register for teleconferences.

CFPB: Sign Up to Receive Compliance Guides for New Mortgage Rules

2013-04-08T10:26:00.003-04:00

The CFPB is encouraging mortgage-industry stakeholders and other interested parties to sign up for the agency’s regulations-specific email list.

Those who sign up will receive plain-language compliance guides and other materials that will help them understand and comply with the slew of new mortgage-related rules the CFPB issued in January.

“In the coming months, we’ll release plain-language compliance guides, updates of the official interpretations, examination procedures, and other materials. We’re planning to release the first set of materials next week,” officials said.

Sign up for the email list.

Housing Coalition Urges Regulators to Align ‘QRM’ With ‘QM’

2013-03-05T08:41:00.003-05:00

The Coalition for Sensible Housing Policy -- of which ABA is a member -- yesterday urged federal regulators in a letter to align the pending risk retention rule’s “qualified residential mortgage” standard with the “qualified mortgage” standard under the ability-to-repay final rule that the CFPB issued on Jan. 10.

The coalition emphasized that it strongly opposes adding stringent down payment and other restrictive requirements to the QRM definition that would limit the ability of private capital to reach lower-income households and first-time buyers.

“Aligning the QRM and QM standards will encourage safe and financially prudent mortgage lending, while also creating more opportunities for private capital to reestablish itself as part of a robust and competitive mortgage market,” the coalition said.

Read the letter.

ABA Comments on QM & Ability to Repay Standards

2013-02-26T10:51:00.000-05:00

ABA submitted two comment letters to the CFPB regarding proposals to expand certain definitions of qualified mortgages (QM) and certain exemptions from the ability to repay (ATR) standards.

In the first letter, ABA expressed general support for the CFPB’s proposals, writing that the final ability to repay rule “sets a reasonable framework for determining a borrower’s ability to repay, and establishes a QM safe harbor which will broadly serve borrowers and lenders well for most loans, ensuring that fair, reasonable and affordable credit remains available.”

In the letter ABA also applauded the CFPB for issuing a concurrent proposal “recognizing the need for exceptions to ATR and expansions of the QM safe harbor to fit the needs of…specialized communities and markets.”

The second letter focused on those portions of the proposal that deal with the calculation of points and fees under the ability to repay rule. ABA expressed support for the CFPB’s second alternative provided in the proposed rule, setting forth the standard that consumer payment of up-front fees and points must offset creditor payments to the loan originator when calculating points and fees.

Read the first of the two letters.
Read the second of the two letters.

Tarullo: Regulators Should Consider Making QM, QRM ‘Congruent’

2013-02-15T07:59:00.002-05:00

Regulators should consider aligning the pending risk retention rule’s “qualified residential mortgage” standard with the “qualified mortgage” standard under the ability-to-repay rule the CFPB finalized on Jan. 10, Federal Reserve Governor Daniel Tarullo said yesterday at a Senate Banking Committee hearing on bank oversight and Dodd-Frank Act implementation.

Regulators should be careful to ensure that different rules do not “constrict credit to middle and lower-middle class people, who might be priced out of the housing market,” Tarullo explained. “So I think it’s definitely the case that on the table should be consideration of making QRM more or less congruent with QM.”

Tarullo also told senators that they should expect “a good bit of change” in the final regulations implementing the Volcker Rule and Basel III. Both proposals have been criticized for being too complex, and Tarullo said regulators are taking that into consideration.

Read witnesses’ testimony.

CFPB Lays Out Implementation Plan for New Mortgage Rules

2013-02-14T08:45:00.001-05:00

The CFPB announced a plan it will implement over the next year that focuses on the mortgage industry’s compliance with new consumer protections that go into effect in January 2014.

Under the Dodd-Frank Act, the CFPB was required to issue new mortgage rules by Jan. 21, 2013. The CFPB met that deadline and set a January 2014 deadline for industry to comply.

In an effort to support rule implementation and ensure the industry is ready for the new mortgage rules, the CFPB announced it will:

Coordinate with other agencies to promote a consistent regulatory experience for the industry.
Publish plain-language guides and summaries of the regulations in both written and video form.
Publish updates to the official interpretations which will provide guidance on how to comply with the rules. These updates will allow the CFPB to address important questions raised by industry, consumer groups, or other agencies. The CFPB expects to issue the first update in the spring.
Publish readiness guides giving mortgage originators and servicers suggested implementation plans. The CFPB expects these to be available this summer. In addition, the CFPB notes that more in-depth examination procedures are expected to be published later this year by the Federal Financial Institutions Examination Council.
Educate consumers with information about the new rules.

ABA Updates ‘Compliance Central’ Resource

2013-02-13T08:03:00.000-05:00

ABA has updated its special compliance resources Web page—ABA Compliance Central—to include links to the association’s many mortgage reform resources. The page lists resources in four key areas—advocacy; information and resources; training and events; and endorsed products and strategic alliances. Each area features direct links to ABA’s most popular and frequently used compliance resources, including telephone briefings, ABA Experts on Call, and compliance conferences and schools.

Visit aba.com/ComplianceCentral.

The Week Ahead: February 11 – February 15

2013-02-08T10:34:00.000-05:00

Tuesday

ABA Telephone Briefing: Understanding Ability-to-Repay and QM. Read more.
FDIC Board Meeting. Read more.

Wednesday

ABA Telephone Briefing: New Employment Obligations and Risks. Read more.

Thursday

Hearing Senate Banking Committee: Oversight & Dodd-Frank Implementation.

Friday

Comments Due Federal Reserve: Stress Testing Scenario Design. Read more.
Comments Due FSOC: MMMF Reform Recommendations. Read more.

All times in Eastern Standard Time. See future events on the Dodd-Frank Calendar.

Join us at the ABA Government Relations Summit The ABA Government Relations Summit is your opportunity to educate lawmakers and regulators about the vital role banks play in the economy. It’s also a time to meet with new leadership and advocate for policy change to support the banking industry. Read more and join us this April!

Bankers Estimate Percentage of Mortgages Qualifying as ‘QM’

2013-02-07T07:48:00.003-05:00

Based on what they’ve read about the new “qualified mortgage” rule, about 42% of bankers estimate that more than 80% of their current mortgage production would qualify as some form of QM, according to early results in the weekly ABA Center for Regulatory Compliance survey.

The early results also show that 17% of bankers believe between 66 and 80% of their mortgage production would meet QM standards, while about 13% estimate it’s between 50 and 65%, and 27% say it’s less than 50%.

ABA Releases Analysis on Loan Originator Compensation Rule

2013-02-06T09:12:00.002-05:00

ABA yesterday released a staff analysis on the final loan originator compensation rule that the CFPB issued on Jan. 20. The rule generally implements Dodd-Frank Act requirements that regulate industry compensation practices for originators, and adds new qualification and screening standards. It also revises and clarifies existing regulations and commentary on loan originator compensation.

Read the ABA analysis.

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ABA Real Estate Lending Conference

2013-01-29T11:00:00.000-05:00

Over the next few weeks, massive Dodd-Frank reform rules will be rolled out. These rules will affect every aspect of the mortgage lending business as we know it today. Everything you know about mortgage lending is about to change. With very short compliance timelines, how will you manage your residential mortgage business going forward?

The ABA Real Estate Lending Conference is the one place where you can get in-depth insights on these transformational Dodd-Frank reforms and their potential impact on your business.

Register now and benefit from the early bird discount in effect until January 31st. Plus, an attractive team discount makes it affordable to attend with your colleagues.

Click here for complete program details.

OCC’s Curry: Regulators ‘Listening Carefully’ on QRM Definition

2013-01-29T08:02:00.000-05:00

Regulators are listening carefully to all stakeholders as they work hard to finish the risk retention final rule and its definition of a “qualified residential mortgage,” Comptroller of the Currency Tom Curry said yesterday at the American Securitization Forum in Las Vegas.

Curry noted that there has been a great deal of controversy over the proposed QRM definition, and he assured attendees that he understands how important it is to them.

I can assure you that the OCC and the other regulatory agencies involved in its formulation are working hard to achieve our objectives: encouraging the availability of consumer credit on reasonable terms facilitated by the secondary mortgage market, on the one hand, and sound credit market practices and investor protection on the other.

Read Curry’s speech.

ABA Banking Journal: How Will Banks Fare in Washington This Year

2013-01-24T10:24:00.000-05:00

ABA Banking Journal has published a special report entitled “The Road Ahead: How Will Banking Fare in Washington This Year.” The ABA Banking Journal interviewed ABA’s top lobbyist and staff experts to gain their insights on what the banking industry might face in 2013.

Topics covered range from Basel III, mortgage reform, possible Dodd-Frank fixes, the CFPB, and exam reform.

Wayne Abernathy, ABA executive vice-president, financial institutions policy and regulatory affairs, on the outlook for 2013:

We're hoping that with the elections being over, the political fun with the banking industry is now also over. Now, maybe, people here [in Washington] can recognize that the banking industry can actually be an important part of economic recovery. And that kind of depoliticizes it.

[In 2013,] I believe that bank policy on the Hill and among the regulators is going to be far less politicized.

Read the full ABA Banking Journal article.