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Consumer Financial Services Watch

News and developments related to consumer financial products and services

K&L Gates Programs: Election 2014: Policy Implications Across Industries

Posted in Bureau of Consumer Financial Protection (CFPB)

On the eve of the 2014 Congressional elections, the Public Policy and Law Group of K&L Gates is hosting two complimentary programs for our clients and contacts on topical issues and implications about the upcoming election. Please see below for more information on both, including how to register. If you wish to attend both programs, you must register for both programs.

Program 1
The Mid-Term Elections: What They Mean for Major National Policies
Thursday, October 30, 2014
3:00 – 4:00 pm EDT

Panelists will discuss alternative impacts of a Republican takeover or Democratic retention of the Senate and continued Republican control of the House on key issues, including energy/environment, financial services, health care and tax.

Register to attend live in our Washington, D.C. office.
Register to participate via Webinar.

Program 2
Election 2014: Its Impact on Federal Policy-Making in 2015
Monday, November 3, 2014
2:00 – 3:00 pm EDT

Panelists will discuss changes on key Congressional committees, the agenda for the 114th Congress and the impact on the Obama Administration’s policies and regulatory activities.

Register to attend live in our Washington, D.C. office.
Register to participate via Webinar.

 

 

K&L Gates Legal Insight: Start Your Compliance Engines: CFPB Proposes Rule to Supervise Larger Nonbank Auto Finance Companies

Posted in Bureau of Consumer Financial Protection (CFPB)

By: Melanie Brody, Anjali Garg, Christa Bieker

The Consumer Financial Protection Bureau (“CFPB” or “Bureau”) issued a proposed rule on September 17, 2014, that would empower the Bureau to supervise certain larger nonbank automobile finance companies. The CFPB proposed the rule pursuant to its authority under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) to supervise nonbank larger participants of certain financial product and service markets for compliance with federal consumer laws.

To read the full alert, click here.

K&L Gates Legal Insight: Is the Third Time the Charm? The Supreme Court to Again Consider Whether the Fair Housing Act Recognizes a Disparate Impact Theory of Liability

Posted in Mortgage Lending

By: Paul F. Hancock, Andrew C. Glass, Roger L. Smerage, Olivia Kelman

For the third time in four terms, the United States Supreme Court has granted certiorari to consider whether the Fair Housing Act recognizes a disparate impact theory of liability. Under that theory, a plaintiff may establish liability for actions performed without any intent to discriminate simply because they may have a disproportionate effect on groups sharing certain statutorily defined characteristics, such as race or national origin. In two recent cases, the Supreme Court was set to decide the issue, only to have the parties settle just before argument. Now, in Texas Department of Housing & Community Affairs v. The Inclusive Communities Project, Inc. (the “Texas DHCA case”), the Court has another opportunity to decide the question.

To read the full alert, click here.

If Bernanke Wants to Refinance, Maybe He Needs a Co-Signer?

Posted in Bureau of Consumer Financial Protection (CFPB), Litigation & Enforcement Actions, Mortgage Lending

By: Kristie D. Kully, Laurence E. Platt

While former Federal Reserve Chairman Ben Bernanke may be known for his loose monetary policy, unfortunately his mortgage lender is not. According to Bloomberg News, Mr. Bernanke complained (while addressing a conference of the National Investment Center for Seniors Housing and Care in Chicago on October 2) that he was recently unable to refinance his mortgage loan.

Although Mr. Bernanke reportedly remarked that “it’s entirely possible” that lenders “may have gone a little bit too far on mortgage credit conditions,” it’s hard to blame lenders. Mr. Bernanke may seem to be a good credit risk, but a lender that follows the underwriting standards mandated by the federal Qualified Mortgage (“QM”) regulations can’t make a loan to just anyone.
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K&L Gates Announcement: K&L Gates Receives Top Rankings in BTI’s Litigation Outlook Survey

Posted in Litigation & Enforcement Actions, Securitization

K&L Gates has been ranked as one of three top law firms as a “Powerhouse” in Class Action and Torts Litigation for the second consecutive year.  The firm was also named as a “Standout” in Securities and Finance Litigation, Complex Commercial Litigation and Routine Commercial Litigation in BTI Consulting Group’s 2015 Litigation Outlook survey.

In addition, the firm was once again included in BTI’s “Honor Roll of Most Feared Law Firms” listing as well as on the honor roll of firms noted by clients for IP Litigation.

The rankings were based on direct client feedback from more than 300 interviews with general counsel and in-house litigation counsel from a wide array of industries.

Click here to read the press release on our rankings.

 

K&L Gates Legal Insight: The CFPB Weighs in on Marketing Services Agreements

Posted in Bureau of Consumer Financial Protection (CFPB)

By: Phillip L. Schulman, Holly Spencer Bunting

The Consumer Financial Protection Bureau (“CFPB”) has, for the first time, publicly expressed views on marketing services agreements (“MSAs”) under Section 8 of the Real Estate Settlement Procedures Act. After months of rumors regarding the CFPB’s investigation, it issued a consent order against Lighthouse Title, Inc., a Michigan title insurance agency that had entered into a series of MSAs with various settlement service providers (“Consent Order”). Although the Consent Order fails to describe the nature of the services performed under the agreements, it clarifies the CFPB’s concerns regarding methods used in determining the payments under such agreements. The Consent Order also raises troubling questions about how the CFPB interprets Section 8 of the Act, since many of those interpretations seem to be at odds with guidance previously offered by the U.S. Department of Housing and Urban Development. This alert provides a brief background regarding MSAs, highlights issues raised by the CFPB Consent Order and discusses lessons learned for structuring new and existing MSAs.

To read the full alert, click here.

2013 HMDA Data is Now Available; Mortgage Lenders Should Consider Evaluating Redlining Risk

Posted in Bureau of Consumer Financial Protection (CFPB), Fair Lending/Anti-Discrimination, Mortgage Lending

By: Melanie Brody, Anjali Garg*
*Ms. Garg is not admitted in D.C. She is supervised by Stephanie Robinson, a member of the D.C. Bar.

It has been a busy week in the fair lending space. Last week, the CFPB issued a white paper describing its proxying methodology for imputing race and ethnicity when analyzing fair lending compliance on non-mortgage credit products along with a proposed rule to oversee nonbank auto finance companies. This week, the Federal Financial Institutions Examination Council released the 2013 Home Mortgage Disclosure Act (“HMDA”) data, and the Federal Reserve released its own analysis of the data. Continue Reading

K&L Gates Live Webcast: Telemarketing and the Telephone Consumer Protection Act—Avoiding Traps and Minimizing Risk

Posted in Mortgage Servicing

Join us for this upcoming live video webcast on Thursday, October 2nd, from 12:00 p.m. to 1:30 p.m. (ET).

The program will include an in-depth discussion, followed by a lively Q&A session on a variety of issues involving the Telephone Consumer Protection Act (TCPA). Our knowledgeable panel will cover a range is issues, including:

  • Restrictions on texting and other types of communications
  • Issues around “Automatic Telephone Dialing Systems”
  • “Prior Express Consent” and revocation
  • Damages and standards for finding knowing and willful violations
  • Defense of class certification
  • Compliance and telemarketing issues
  • Insurance coverage
  • Other emerging issues

Continue Reading

CFPB Proposes New Rule to Oversee Nonbank Auto Finance Companies

Posted in Bureau of Consumer Financial Protection (CFPB), Fair Lending/Anti-Discrimination, Personal Property Financing

By: Melanie Brody, Anjali Garg*
*Ms. Garg is not admitted in D.C. She is supervised by Stephanie Robinson, a member of the D.C. Bar.

The CFPB proposed a new rule on September 17, 2014, that would enable the Bureau to oversee nonbank auto finance companies. With the proposal, the CFPB takes another step toward expanding its supervisory authority over nonbanks. The Bureau released the proposed rule along with a report on recent examinations of bank auto lending activities and a white paper describing its proxying methodology for imputing race and ethnicity when analyzing fair lending compliance on non-mortgage credit products. Continue Reading

Big Data takes a Big Step: CFPB Offers Insight into Its Fair Lending Proxy Methodology

Posted in Bureau of Consumer Financial Protection (CFPB), Fair Lending/Anti-Discrimination, Mortgage Lending, Mortgage Servicing

By: Melanie BrodyAnjali Garg*
*Ms. Garg is not admitted in D.C. She is supervised by Stephanie Robinson, a member of the D.C. Bar.

The Home Mortgage Disclosure Act requires residential mortgage lenders to collect race and ethnicity information about loan applicants, and lenders, regulators and others routinely use this information to statistically evaluate whether there is a risk that a lender has discriminated against borrowers on a prohibited basis. With regard to other types of credit, with respect to which federal law generally prohibits the collection of demographic information, lenders and other interested parties must impute credit applicants’ race and ethnicity using proxies. For example, a lender could use the racial composition of the census tract in which a consumer resides to assign an assumed race to the consumer. Although proxying provides a way to evaluate fair lending risk in the absence of actual demographic data, there historically has not been a generally-accepted methodology for performing the proxy process, and this has made it particularly challenging to evaluate fair lending compliance for non-mortgage credit products. Continue Reading