regulatory compliance update - acuia · trid timing violations •loan estimate delays –3 days...

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CLAconnect.com

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Regulatory Compliance Update

Justin Robinson

Managing Director

CliftonLarsonAllen

612-414-6590

[email protected]

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Agenda

•Compliance Management

•BSA

•Military Lending Act

•Real Estate Lending

•Fair Lending

•UDAAP

•CFPB Upcoming Agenda

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Compliance Management

• Key Components

– Oversight

– Program

– Complaints

– Compliance audit

• Program and management tone are vital

• Avoid appearance of compliance breakdowns

• Compliance review

• Complaint Management

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Complaint Management

• Drives compliance focus

• All complaints can be important

• Expectations greatly increasing

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Compliance Best Practices

• Compliance integration

• Management support

• Training

• Reviews

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BSA

• More in depth examinations

• Focus on program structure

– Due diligence

– MSBs

• New Developments:

– Due Diligence Rule

– CIP for Prepaid Cards

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BSA

• CIP for Certain Prepaid Cards

– Regulatory Interpretation:

◊ CIP on individuals purchasing Prepaid cards if:

• The card is reloadable, or

• The card has access to credit or overdraft features

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Military Lending Act (MLA)

• Compliance deadlines 2016 and 2017

• Covered borrower

– Member of armed forces ◊ Active duty

◊ Active guard

◊ Reserve duty

– Includes dependents of covered borrower

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Changes to MLA

• MAPR covers more types of loans

• MAPR includes more fees

• Additional Disclosures

• Arbitration prohibited

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Key Concerns of MLA

• Share secured loans

• Right to set-off

• Process for identifying covered borrowers

• Logistics of providing required notice

• Reliance on credit bureaus

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Real Estate Lending

• Mortgage regulations continue

– HMDA

– Servicing

– Amended TRID rules

• TRID issues

– Common violations

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Real Estate Lending

• HMDA

– Effective for loans originated January 1, 2018

– New data to be collected

– Now required ◊ Denial reasons

◊ Preapproval requests approved, but not accepted

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Real Estate Lending

• HMDA

– Must report HELOCs

– New filing method (beginning in 2019) ◊ Universal Loan Identifier

– In 2020, new threshold for filing quarterly ◊ 60,000 total applications reported in preceding calendar year

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Real Estate Lending

• Servicing

– Effective August 2017

– Applies to small servicers: ◊ Definition of Delinquency

◊ Forced Placed Insurance

◊ Successors in Interest

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Real Estate Lending

• TRID Amendments

– Tolerance clarification ◊ Service Provider List

◊ “Total Payments” section of CD

– Expand coverage for all cooperatives

– Expand post-consummation disclosures: ◊ Escrow cancellation

◊ Partial payment

– Mandate revised LE after rate lock

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Real Estate Lending

• TRID Common Violations

– Timing

– Technical

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TRID Timing Violations

• Loan Estimate delays

– 3 days after receiving an “application” ◊ “application” defined as the submission of the consumer's name,

the consumer's income, the consumer's social security number to obtain a credit report, the property address, an estimate of the value of the property, and the mortgage loan amount sought.

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TRID Timing Violations

• Revised LE and CD given on the same date

– “The creditor may not provide a revised Loan Estimate on or after the date the creditor provides the consumer with the Closing Disclosure.”

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TRID Technical Violations

• Title Fees

– Must be itemized.

– Must include “title”

– Must be alphabetized (this applies to all services)

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• Taxes and Insurance and Escrow Fields

– Refinances that do not indicate estimate T&I ◊ Even if there is no escrow, there should be an estimate of T&I

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• Written List of Service Providers

– Must include at least one example for every service listed on the LE that the applicant can shop for

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Fair Lending

• Still a focus for regulators

– NCUA more “offsite” Fair Lending reviews

• Real estate loan policies

• Indirect lending

• HMDA

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UDAAP: Unclear Expectations

• Strict compliance is not enough

• Examiners and Consumer scrutiny

• SUBJECTIVE!

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UDAAP

• Always remember the Four Ps

– Prominence

– Presentation

– Placement

– Proximity

• Review Third party relationships

• Footnotes in marketing and disclosures

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UDAAP Examples

• Recent Issues

– Inaccurate and sloppy credit reporting

– Credit card add-on products

– Overdraft programs

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CFPB Rulemaking

• Spring 2016 Rulemaking Agenda:

– Debt protection

– Overdrafts

– Reg B data collection for commercial loans

– Arbitration agreements

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CFPB Rulemaking

• Debt Protection

– Looking to expand current FDPA ◊ Currently applies only to 3rd party debt collectors

◊ CFPB indicates similar restrictions would apply in collecting own debt

• Collecting correct debts

• Limit excessive or disruptive communications

• Make debt details clear and disputes easy

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CFPB Rulemaking

• Overdrafts

– Rules are coming

– We don’t have much clarity on what it will look like

– Potential changes: ◊ Fee limits

◊ More disclosures

◊ Additional opt-in requirements

◊ Strict monitoring requirements

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CFPB Rulemaking

• Regulation B Data Collection

– Potential new rules for commercial loan applications

– Require credit unions to collect certain data at application: ◊ Application number

◊ Date the application was received

◊ Type and purpose of loan

◊ Amount of credit applied for and approved

◊ Action taken and date

◊ The census tract of the principal place of business

◊ The gross annual revenue of the business

◊ The race, sex, and ethnicity of the principal owners of the business

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CFPB Rulemaking

• Arbitration Agreements

– Proposed rule aimed at restricting arbitration agreements ◊ Ban arbitration clauses that block class action lawsuits

◊ Submit arbitration claims filed and awards issued to the CFPB

◊ “The Bureau is also considering publishing the claims and awards on its website so the public can monitor them”

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Justin Robinson

• [email protected]

• 612-414-6590

mailto:[email protected]

regulatory compliance update - acuia · trid timing violations •loan estimate delays –3 days...

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