The Consumer Financial Protection Bureau (“CFPB”) recently issued a compliance bulletin warning financial institutions that they may face potential liability as indirect lenders for fair lending violations in the process of making indirect loans through automobile dealerships (the “Bulletin”). Indirect auto lending is a process where an automobile dealership will typically collect credit information from a consumer seeking financing and then forward the information to prospective lenders....
Entries in CFPB (13)
The Consumer Financial Protection Bureau (“CFPB”) recently issued a Small Entity Compliance Guide on the Ability-to-Repay and Qualified Mortgage Rule (the “Rule”). The Rule was issued under Dodd-Frank. The Guide provides an overall summary of the Rule and discusses application of the Rule in a Q&A format. The CFPB issued the final rule on January 10, 2013, with an effective date of January 10, 2014.
The Consumer Financial Protection Bureau (“CFPB”) recently issued guidance regarding its expectations for when residential mortgage loans are transferred to mortgage servicers and subservicers (the “Guidance”). Servicing transfers of mortgages and mortgage portfolios are a common practice, with mortgage lenders outsourcing servicing duties (such as loan payment collection and processing) to a third-party vendor.
As of January 1, 2013, employers who obtain background checks on employees and job applicants from consumer reporting agencies were required to utilize revised notices and disclosures under the Fair Credit Reporting Act. For more information and links to the revised documents, refer to a Client Alert written by Tawny Alvarez, an attorney in our Labor and Employment Law Group, which was recently posted to the Group’s blog.
CFPB Issues Final Rules Governing MLO Compensation Restrictions and Other Requirements under Regulation Z
The Consumer Financial Protection Bureau (“CFPB”) recently issued a final rule (the “Final Rule”) implementing restrictions on mortgage loan originator (“MLO”) compensation under Regulation Z (Truth in Lending), along with additional interpretive guidance. These restrictions, which prohibit MLO compensation based on mortgage loan terms, or “proxies” for such terms, were mandated under the Dodd-Frank Act. In a number of prior blogs, we discussed the CFPB’s evolving guidance on these restrictions. One issue of particular interest was whether profit-based retirement and bonus plans would be prohibited under the rationale that profit serves as a “proxy” for certain loan terms such as interest rate (a view taken by Federal Reserve staff members when the rule was first introduced).