nkolen – Page 4 – Consumer Financial Services Watch

Fannie and Freddie Announce Guidelines for 3 Percent Down Payment Mortgage Program

Dec 12 2014

By: Phillip L. Schulman and Christa Bieker

Earlier this week, Fannie Mae and Freddie Mac announced guidelines for a new mortgage program that will allow down payments as low as three percent for some first-time and low-income home buyers. Melvin Watt, director of the Federal Housing Finance Agency which regulates Fannie and Freddie, explained that the new guidelines will “enable credit worthy borrowers who can afford a mortgage, but lack the resources to pay a substantial down payment plus closing costs, to get a mortgage with 3 percent down.”

Fannie Mae and Freddie Mac do not make loans, but instead buy loans from mortgage lenders and bundle them into securities to sell to investors. Fannie and Freddie’s loan guidelines have broad influence in the mortgage-lending market. The program, first announced in October, is designed to expand access to mortgages with low down payments, which Watt has stated is a “much needed piece to the broader access to credit puzzle.”

What You Need to Know about Defending Cyber Related Class Action Litigations

Dec 11 2014

15 January 2015
3:00 – 4:30 pm EST
Complimentary Webinar

Please join us for a complimentary program on defending cyber related class action litigation. The program will include an in-depth discussion, followed by a Q&A session, on recent developments involving cybersecurity class actions. Our knowledgeable panel will cover a range of issues including:

Coordinating with data breach response team
Theories of injury raised by consumers and credit institutions in response to data breaches
Statutory and common law causes of action typically pleaded
Approaches to defending claims and opposing class certification
Lessons learned from past data breach class actions
Insurance coverage considerations
Other emerging issues

K&L Gates Ranked Among Top 10 Firms for Superior Client Service

Dec 02 2014

Firm makes third consecutive appearance on Client Service 30 ranking

Boston – Global law firm K&L Gates LLP has been identified among the top 10 law firms for client service, ranking eighth out of nearly 650 firms noted by general counsel in the “2015 BTI Client Service 30” survey. The survey is part of BTI Consulting Group’s larger Client Service A-Team report released today, which rates firms in nearly 20 unique activities that drive client relationships based on direct, unprompted feedback from more than 300 Global 500 and Fortune 1000 corporate counsel.

This is the third consecutive year — and fifth time overall — that K&L Gates has been included on the “Client Service 30”. In addition, this marks K&L Gates’ 14th straight year on the Client Service A-Team, which evaluates firms in such client-defined activities as breadth of services, innovative approach, value for dollar, and anticipating client needs.

Mortgage Lenders File Brief with Supreme Court Arguing That Fair Housing Act Does Not Support Disparate-Impact Claims

Dec 01 2014

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

On November 24, 2014, K&L Gates filed a brief with the United States Supreme Court on behalf of the American Financial Services Association, the Consumer Mortgage Coalition, the Independent Community Bankers of America, and the Mortgage Bankers Association as amici curiae in Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc., No. 13-1371. The case presents the question left unresolved by settlements in Magner v. Gallagher, No. 10-1032, and Township of Mount Holly v. Mt. Holly Gardens Citizens in Action, Inc., No. 11-1507, namely whether the Fair Housing Act recognizes a disparate-impact theory of liability. The brief supports the petitioners’ argument that the Act is properly read as being limited to cases of intentional discrimination and explains the negative impact of the disparate-impact theory on the residential mortgage lending industry. A copy of the brief is available here. The Court will hear oral argument in the case on January 21, 2015.

A K&L Gates and Paybefore Webinar: 870 Pages in 90 Minutes: What the CFPB’s Prepaid Proposal Means for Your Business

Nov 25 2014

4 December 2014
2:00 p.m. – 3:30 p.m. ET
Complimentary Webinar

The payments industry is only starting to digest the potential consequences of the CFPB’s sweeping proposed rule on prepaid accounts.

On December 4, 2014, at 2:00 p.m. ET, K&L Gates and Paybefore will present a complimentary webinar for the Paybefore community and clients and friends of K&L Gates on the proposed rules. The focus will be on the practical impact the rules will have on prepaid accounts, and what they may mean to prepaid issuers, program managers and processors. The goal will be to give listeners information and tools to evaluate how the rule will impact their business—and provide practical advice on how to address concerns about the rule with the CFPB.

CFPB Issues Guidance to Mortgage Lenders on Verifying Disability Income

Nov 20 2014

By: Melanie Brody, Stephanie C. Robinson, Jay M. Willis

On Tuesday, the Consumer Financial Protection Bureau (“CFPB” or the “Bureau”) issued a compliance bulletin, CFPB Bulletin 2014-03, to help lenders avoid discrimination against recipients of Social Security Administration (“SSA”) disability income in violation of the Equal Credit Opportunity Act and its implementing regulation, Regulation B.

Creditors may occasionally feel stuck between a rock and a hard place when underwriting mortgage loans for disability income recipients. On the one hand, creditors have a legal obligation to ensure that applicants are able to repay any credit extended. When an applicant receives public assistance, Regulation B expressly allows creditors to consider the length of time that such assistance is likely to continue. On the other hand, while SSA provides recipients with disability benefits documentation, that documentation generally does not detail how long benefits will last. Creditors seeking to responsibly underwrite mortgage loans must somehow make that determination on their own.

Non-Direct Auto Lending: Is the CFPB Asserting Jurisdiction over the Capital Markets?

Nov 18 2014

By: Laurence E. Platt

The capital markets should look closely at the proposed rule of the Consumer Financial Protection Bureau (the “CFPB”) to supervise certain larger non-bank automobile finance companies because of the CFPB’s assertion of broad authority over large purchasers of auto loans and auto leases. The CFPB’s interest in indirect auto lending is not new. The proposed rule, however, purports to give the CFPB jurisdiction over any large purchaser of auto loans and auto leases, regardless of whether the purchaser had any direct involvement with the lender or reasonably could be construed to be the indirect originator. In its defense, the CFPB would stop its jurisdiction at the door of securitization, but any purchases up to that point may be fair game. The logic underlying this position could be extended by the CFPB to mortgages, credit cards, and virtually any other type of consumer product or service. Interested parties may want to comment by the December 8, 2014 due date.

To read the full alert, click here.

Another CFPB Loan Originator Compensation Enforcement Action

Nov 17 2014

By: Kris D. Kully

The Consumer Financial Protection Bureau (CFPB) has once again charged a mortgage lender with paying compensation to loan originators based on loan terms, which is prohibited under the Truth in Lending Act and its Regulation Z. This week, the CFPB asked a federal court to approve an order requiring Franklin Loan Corporation (which lends in California and Illinois) to pay $730,000 for allegedly paying loan originators quarterly bonuses based on loan terms.

A Cure for What Ails You – Or At Least One Thing That Does: CFPB’s Cure for “Points and Fees” Mistakes

Nov 17 2014

By: Kris D. Kully

In a recent amendment to Regulation Z, the CFPB offers a tonic to mortgage lenders and their assignees that have struggled with the “points and fees” calculation for Qualified Mortgages (QMs). The CFPB’s cure allows lenders or assignees of covered loans to reestablish the QM status of a loan for which the amount of points and fees inadvertently exceeds the thresholds set by the CFPB’s Ability to Repay/QM Rule. The cure is available for loans consummated on and after November 3, 2014, but it expires January 10, 2021.

To read the full alert, click here.

Eleventh Circuit Bolsters FCC Interpretation of “Prior Express Consent” under the TCPA

Nov 14 2014

By: Gregory N. Blase, Andrew C. Glass, Samantha A. Miko

The U.S. Court of Appeals for the Eleventh Circuit recently bolstered the Federal Communications Commission’s (“FCC”) interpretation of “prior express consent,” a key term under the Telephone Consumer Protection Act (“TCPA”).

In Mais v. Gulf Coast Collection Bureau, Inc., the plaintiff’s wife provided the plaintiff’s cellphone number on a hospital admittance form. The form disclosed that any information supplied could be shared with the hospital’s affiliates and used for any purpose, including for billing. After the plaintiff failed to pay a hospital affiliate’s invoice for treatment services rendered, the affiliate provided the plaintiff’s contact information to the defendant, which initiated collection activity, including contacting the plaintiff at the cellphone number that was provided on his admittance form by his wife. Read More

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