National Banker Teleconference Timely and Comprehensive Information - - PowerPoint PPT Presentation

National Banker Teleconference Timely and Comprehensive Information from the FDIC

Consumer Compliance-related Provisions of the Economic Growth, Regulatory Relief, and Consumer Protection Act October 25, 2018

Agenda

Title I – Improving Consumer Access to Mortgage Credit Title II – Regulatory Relief and Protecting Consumer Credit Title III – Protections for Veterans, Consumers, and Homeowners Title IV – Protections for Student Borrowers Discussion of Resources Questions

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Questions

If you have any questions related to the topics being discussed today, please email them to:

BankerTeleconference@fdic.gov

Questions asking for statutory or regulatory interpretations will not be addressed during this call, as the primary interpretive authority for many of the statutes and regulations discussed today rests with other agencies.

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activities conducted through third-party relationships as if the activity were handled within the institution

Disclaimer

The information contained in this presentation is for informational purposes only and is provided as a public service and in an effort to enhance understanding of the statutes and regulations administered by the FDIC. It expresses the views and opinions of FDIC staff and is not binding on the FDIC, its Board of Directors, or any board member, and any representation to the contrary is expressly disclaimed.

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Title I Improving Consumer Access to Mortgage Credit

Title I – Section 101 Minimum Standards for Residential Mortgages Background

• Ability to Repay (ATR) Requirement
• Must consider ability to repay a closed-end residential

mortgage loan according to its terms

• Qualified Mortgage (QM)
• Presumed to meet ATR requirement
• Flexibility for small creditors

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Title I Title I - Se Sectio ction n 101 101 Mi Minimum nimum Stan Standa dards rds for R for Resid esiden enti tial Mo al Mortgag rtgages es

New QM Category

• Originated and retained in portfolio by IDI with <$10 billion in total consolidated assets
• In compliance with respect to prepayment penalties
• Total points and fees do not exceed 3 percent
• No negative amortization or interest-only features
• IDI considered & documented debt, income, and financial resources.

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Title I Title I - Se Sectio ction n 10 102 2 Sa Safeg fegua uarding rding Acce Access to H ss to Hab abit itat at for Hu for Human manit ity H y Home

• mes

s

Appraisal Donation Provides that a fee appraiser’s voluntary donation of appraisal service to a tax-deductible eligible organization is considered customary and reasonable.

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Title I Title I - Se Sectio ction n 10 103 3 Ex Exemp empti tion

• n for A

for App ppraisals raisals in R in Rura ural l Ar Area eas s

Appraisal

Property located in a rural area as described in 1026.35(b)(2)(iv)(A) Contacted at least 3 State certified appraisers

Not

Documented that no State appraiser was available within 5 business days beyond customary and reasonable fee and timeliness standards

Required if:

Transaction value is less than $400,000 Oversight of a Federal financial institution regulatory agency

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Title Title I I - Sec Section tion 104 104 Home Home Mor Mortga tgage ge Disc Disclosu losure e Act Act

Partial Exemption Thresholds Closed-end mortgage loans: Open-end lines of credit: Fewer than 500 in each of the Fewer than 500 in each of the preceding two calendar years preceding two calendar years

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Title Title I I - Se Sect ction ion 104 104 Home Home Mor Mortg tgag age e Disclos Disclosur ure e Act Act

Partial Exemption Qualification Criteria Last two CRA Performance Last CRA Performance Evaluations: Evaluation: Rating cannot be Rating cannot be “needs to improve” “substantial noncompliance”

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Title Title I I - Se Sect ction ion 104 104 Home Home Mor Mortg tgag age e Disclos Disclosur ure e Act Act

Data Fields Covered by the Economic Growth Act’s Partial Exemptions

 Universal Loan Identifier  Property Address  Rate Spread  Credit Score  Reasons for Denial  Total Loan Costs or Total Points and Fees  Origination Charges  Discount Points  Lender Credits  Interest Rate  Prepayment Penalty Term  Debt-to-Income Ratio  Combined Loan-to-Value Ratio  Loan Term  Introductory Rate Period  Non-Amortizing features  Property Value  Manufactured Home Secured Property Type  Manufactured Home Land Property Interest  Multifamily Affordable Units  Application Channel  Mortgage Loan Originator Identifier  Automated Underwriting System  Reverse Mortgage Flag  Open-End Line of Credit Flag  Business or Commercial Purpose Flag FEDERAL DEPOSIT INSURANCE CORPORATION 12

Title Title I I - Se Section ction 104 104 Ho Home me Mo Mortga tgage ge Dis Disclos losur ure e Ac Act t

Data Fields Not Covered by the Partial Exemptions

 Application Date  Ethnicity  Loan Type  Race  Loan Purpose  Sex  Preapproval  Age  Construction Method  Income  Occupancy Type  Type of Purchaser  Loan Amount  HOEPA Status  Action Taken  Lien Status  Action Taken Date  Number of Units  State  Legal Entity Identifier  County  Census Tract FEDERAL DEPOSIT INSURANCE CORPORATION 13

Title Title I I -Se Sect ction ion 104 104 Home Home Mor Mortg tgag age e Disclos Disclosur ure e Act Act

Resources

• FFIEC Filing Instructions Guide for HMDA Data Collected in 2019 (October 2018)
• FIL-58-2018, HMDA: Bureau Interpretive Rule on Partial Exemptions
• FFIEC Filing Instructions Guide for HMDA Data Collected in 2018 (August 2018)
• FIL-36-2017, HMDA Examiner Transaction Testing Guidelines
• FIL-51-2017, FDIC Releases Interagency Designated Key HMDA Data Fields

List

• FIL-36-2018, Home Mortgage Disclosure Act: Statement on the Implementation
• f the Economic Growth, Regulatory Relief, and Consumer Protection Act

Amendments

• FIL-63-2017, Home Mortgage Disclosure Act: Statement on Institutions’ Good

Faith Compliance Efforts

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Title I Title I - Se Sectio ction n 106 106 Elimi Elimina nati ting ng B Barriers arriers to to Jo Jobs bs for L for Loa

• an

n Or Originato iginators rs

Temporary Authority to Originate Loans Loan originators moving from a depository institution to a non- depository institution State-licensed loan originators moving interstate

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Title Title I I - Se Sect ction ion 107 107 Pro Prote tect cting ing Acc Acces ess s to to Manu Manufact factur ured ed Home Homes s

Retailer or Manufacturer of Manufactured Homes

Does not receive compensation greater than a cash transaction Discloses affiliations Does not negotiate directly with consumer or lender on credit terms

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“

Title Title I I - Se Sect ction ion 108 108

Escrow Escrow R Req equireme uirements nts Relating elating to to Certa ertain in Con

• nsumer

sumer Cred redit it Tran Transaction sactions s

Small Institution Exemption Criteria

(to be implemented by regulation) $10 Billion or less in assets Originated 1,000 or fewer loans secured by a first lien on a principal dwelling during the preceding calendar year

Other criteria: extend credit secured by a first lien on property in a rural or underserved area; Except for specified escrow accounts, do not maintain” escrow accounts for any credit extension secured by real property at consummation; and Transaction not subject to transfer or sale to any person not eligible for the rural and underserved exemption under current criteria

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Title Title I I - Se Sect ction ion 10 109(a 9(a) ) No No Wait Wait for Lo for Lower wer Mor Mortg tgag age e Rat Rates es

Timing Requirements and Waiting Periods

TILA Section 128(b)

• Mortgage Disclosure Improvement Act

TILA Section 129(b)

• Home Ownership and Equity Protection Act

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Title II Regulatory Relief and Protecting Consumer Access to Credit

Title Title II II - Se Sect ction ion 208 208 Exp Exped edited ited Fu Fund nds s Ava Avail ilab abil ility ity Act Act

Extended Geographies

• Amends the Expedited Funds Availability Act (EFAA)
• EFAA expanded to include American Samoa, Guam

and the Northern Mariana Islands.

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Title Title II II - Se Sect ction ion 213 213

Mak Making Onli ing Online ne B Ban anking king I Initi nitiation ation L Leg egal al an and d Ea Easy sy Use of Scanned ID to Open Accounts

Preempts state law regarding scanned IDs to the extent of any conflict

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Title Title II II - Se Sect ction ion 215 215 Red Reduc ucing ing Iden Identity tity Fr Frau aud d

Social Security Administration Database Access with Written Customer Consent

Name Social Security Number Date of Birth

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Title III Protections for Veterans, Consumers, and Homeowners

Title Title III III - Se Sect ction ion 301 301 Protecting Consumers’ Rights

AMENDMENT TO THE FAIR CREDIT REPORTING ACT: Consumer Reporting Agency – Consumer direct request for Security Freeze preventing release of credit information from consumers changed from 90 days to one year) Received by Mail: Place 3 business days after receipt; Received Electronically: Place 1 business day after receipt CRA Sends Notice: by 5th day after placement – Confirmation of placement; how to remove; how to authenticate the consumer; and consumer rights No fee can be charged

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Title Title III III - Se Sect ction ion 301 301 Protecting Consumers’ Rights

Consumer Reporting Agency – Removal of Security Freeze on Credit Report Requests from Consumers Mail: Remove 3 business days after receipt; Electronic: Remove 1 hour day after receipt No fee can be charged

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Title Title III III - Se Sect ction ion 301 301 Protecting Consumers’ Credit

Consumer Applies for Credit Security Freeze not Released by Consumer “Application Incomplete”

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Title Title III III - Se Sect ction ion 302 302 Protecting Veterans’ Credit

 Amendment to the FCRA  Definition of “Veteran’s Medical Debt”  A medical collection debt of a veteran owed to a non- Department of Veterans Affairs health care provider that was submitted to the Department for payment for health care authorized by the Department of Veterans Affairs  Veteran Medical Debt removal from credit report process  Military Member Free Credit Monitoring Service  Effective date: May 24, 2019

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Title Title III III - Se Sect ction ion 303 303

Immuniz Immunization from Suit ation from Suit for Di for Disclos sclosure ure of Finan

• f Financial Exploitati

cial Exploitation

• n

 “Exploitation” – The fraudulent or

• therwise illegal, unauthorized, or

improper act or process of an individual, including caregiver or a fiduciary, that:  Uses senior’s resources for personal benefit  Deprives senior access to or use of rightful resources, belongings, or assets

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Title Title III III - Se Sect ction ion 303 303

Immun Immuniz izat ation ion from from Suit fo Suit for r Disclosur Disclosure e of

• f Fina

Financ ncial ial Exploitat Exploitation ion

 Generally, no liability for disclosing the suspected exploitation of a senior citizen if at the time of the disclosure:  The disclosure was made in good faith  Training was received  Among other things, the training must:  instruct individuals on how to identify and report suspected exploitation of a senior citizen  discuss the need to protect the privacy and respect the integrity of customers of the FI

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Title Title II III I - Sec Section tion 304 304

Re Restor storatio ation n of

• f the Pr

the Prote

• tectin

cting g Ten Tenant ants s at Forec at Foreclosur losure e Ac Act t

Sunset provision repealed Effective Date: 30 days after enactment

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Title Title III III - Se Sect ction ion 307 307 Pro Prope pert rty y Ass Asses esse sed d Clean Clean Ene Energ rgy y Fina Financ ncing ing

• Amends the Truth in Lending Act
• Directs the Bureau to prescribe

regulations that apply ability to repay requirements to PACE loans.

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Title Title III III - Se Sect ction ion 308 308

GAO GAO Rep Report

• rt on
• n Con

Consu sumer mer Rep Reporti

• rting

ng Age Agencies ncies

 Legal and regulatory review  Consumer appeal process review  Cause of reporting error review  Data furnisher responsibility review  Data security review  Access and use review  Control and ownership of information review  Supervisory and enforcement, and data security law review

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Title Title III III - Se Sect ction ion 309 309 Pro Prote tect cting ing Vet Veter eran ans s from Pr from Pred edat ator

• ry

y Le Lend nding ing

Refinancing of Housing Loans VA Loan Guarantee

Certification of loan fee recoupment schedule Fees must be recouped within 36 Months after loan issuance Recoupment calculated through regular monthly payments*

*Other than taxes, amounts held in escrow, and fees paid as a result of the refinanced loan.

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“ ”

Title Title III III - Se Sect ction ion 309 309 Pro Prote tect cting ing Vet Veter eran ans s from Pr from Pred edat ator

• ry

y Le Lend nding ing

Refinancing of Housing Loans VA Loan Guarantee

Net Tangible Benefit Test Fixed Rate to Fixed Rate reduction is not less than 50 basis points Fixed Rate to Adjustable Rate reduction is not less than 200 basis points Rate Reduction not Solely due to Discount Points Loan to be Refinanced is seasoned 210 days after 1st payment date, and 6th monthly payment is made

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Title Title III III - Se Sect ction ion 31 313 3

Foreclosur Foreclosure e Relief Relief and Ext and Extension ension for for Servicemember Servicemembers s

Original 90 day stay Temporary

• ne year

stay Permanent

• ne year

stay

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Title VI Protections for Student Borrowers

Title Title VI VI - Se Sect ction ion 601 601 Pro Prote tect ctions ions for St for Stud uden ent t Lo Loan an Bor Borro rower wers s

TILA Amendment

• Generally provides protections for student borrowers and

cosigners in the event of death or bankruptcy.

• The law applies only to private education loans

Private Education Loans

• Prohibits a creditor from declaring default or accelerating the

debt on the sole basis of debt or bankruptcy of a cosigner.

• Release of cosigner upon death of borrower

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Title Title VI VI - Se Sect ction ion 602 602 Reh Rehab abil ilitat itation ion of Privat

• f Private

e Edu Educa cation tion Lo Loan ans s

FCRA Amendment

• A consumer may request a financial institution to remove a default from

their consumer report, one time per loan.

Federal Banking Agency Feedback

• If a financial Institution regulated by a federal banking agency chooses to
• ffer a program under 602, the institution must seek written approval from

that agency on the terms and conditions of that rehabilitation program.

Optional

• Nothing in this section requires a financial institution to offer a loan

rehabilitation program as described in Section 602

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Title Title VI VI - Se Sect ction ion 603 603

Best Best Pract Practices ices For H For Higher igher Educat Education ion Financial Financial Liter Literacy acy

FLEC Responsibilities

• Solicit public comment
• Establish best practices

 Teaching financial literacy  Providing useful and necessary information to help students

at institutions of higher education to make student borrowing decisions

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Que Quest stions ions

If you have any questions related to this presentation, please email them to: BankerTeleconference@fdic.gov

Questions asking for statutory or regulatory interpretations will not be addressed during this call, as the primary interpretive authority for many of the statutes and regulations discussed today rests with other agencies.

FEDERAL DEPOSIT INSURANCE CORPORATION