Regulatory News
CFPB Announces Two Annual Threshold Adjustments
HMDA Asset-Size Exemption Threshold Unchanged at $44 Million; Higher-Priced Mortgage Loan Escrow Account Exemption Threshold Declines to $2.052 Billion WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) today issued two final rules regarding annual threshold adjustments under the implementing regulations for the Home Mortgage Disclosure Act and the Truth in Lending Act. Home Mortgage Disclosure Act The CFPB issued a final rule regarding the asset-size exemption threshold for banks, savings associations, and credit unions under Regulation C, which implements the Home Mortgage Disclosure Act (HMDA). HMDA requires that the CFPB adjust this threshold yearly by the annual percentage change in the average of Consumer Price Index for Urban Wage Earners and Clerical Workers…
Agencies Announce Threshold for Smaller Loan Exemption from Appraisal Requirements for Higher-Priced Mortgage Loans
WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB), Federal Reserve Board, and Office of the Comptroller of the Currency (OCC) today announced that the threshold for exempting loans from special appraisal requirements for higher-priced mortgage loans during 2016 will remain $25,500. The threshold amount will be effective January 1, 2016, and is the same threshold that applied in 2015–based on the annual percentage decrease in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) as of June 1, 2015. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 amended the Truth in Lending Act to add special appraisal requirements for higher-priced mortgage loans, including a requirement that creditors obtain a written appraisal…
CFPB's new rule will shine light on mortgage market practices
Today the Consumer Financial Protection Bureau is updating the Home Mortgage Disclosure Act (HMDA) requirements with a new rule that will shine more light on lending practices in America's largest consumer financial market, the mortgage market. HMDA is a statute that provides the public and policymakers with information about the mortgage market and ensures market transparency. HMDA requires many financial institutions to collect, report, and disclose information about their mortgage activity. The original law was enacted by Congress 40 years ago to respond to concerns that some banks may be failing to serve their communities. Everyone in America deserves a fair shot at accessing the American Dream. The Home Mortgage Disclosure Act: Helps to show whether lenders are serving the housing…
CFPB Takes Action Against Fifth Third Bank for Auto-Lending Discrimination and Illegal Credit Card Practices
Company to Pay $18 Million to Minority Auto Borrowers, $3 Million to Credit Card Customers
WASHINGTON, D.C. – Today the Consumer Financial Protection Bureau (CFPB) announced two separate actions against Fifth Third Bank, for discriminatory auto loan pricing and for illegal credit card practices. The joint CFPB and Department of Justice (DOJ) auto-lending enforcement action requires Fifth Third to change its pricing and compensation system to minimize the risks of discrimination, and to pay $18 million to harmed African-American and Hispanic borrowers. The CFPB's action against Fifth Third's deceptive marketing of credit card add-on products requires the bank to provide an estimated $3 million in relief to eligible harmed consumers and pay a $500,000 penalty.
| Institution | Regulator(s) | Violation | Penalty | Period covered | HMDA/fair-lending data field involved |
|---|---|---|---|---|---|
| Fifth Third Bank | CFPB, DOJ | Discriminatory auto loan pricing — violated the Equal Credit Opportunity Act by charging African-American and Hispanic borrowers higher dealer markups than non-Hispanic white borrowers, without regard to creditworthiness | $18 million to harmed African-American and Hispanic borrowers ($12 million into a settlement fund, plus credit of $5–$6 million for remediation already provided, with any additional funds paid in to reach $18 million total); no penalty assessed for this action | January 2010 through September 2015 | Dealer markup on auto loan interest rate (race and national origin) |
| Fifth Third Bank | CFPB | Deceptive marketing and sales of "Debt Protection" credit card add-on product, in violation of the Dodd-Frank Act | $3 million in relief to roughly 24,500 customers, plus a $500,000 penalty to the CFPB civil penalty fund | 2007 through February 2013 (fulfillment kit misrepresentations from December 2011 through September 2012) | — |
Justice Department and Consumer Financial Protection Bureau Reach Settlement with Hudson City Savings Bank to Resolve Allegations of Mortgage Lending
Settlement Provides Over $27 Million to Ensure Equal Lending Services to Predominantly Black and Hispanic Communities
The Justice Department and Consumer Financial Protection Bureau (CFPB) filed a consent order today to resolve allegations that Hudson City Savings Bank (Hudson City) engaged in a pattern or practice of "redlining" predominantly Black and Hispanic neighborhoods in its residential mortgage lending practices. "Redlining" is the discriminatory practice by banks or other financial institutions to deny or avoid providing credit services to a consumer because of the racial demographics of the neighborhood in which the consumer lives. This resolution represents the Justice Department's largest residential mortgage redlining settlement in its history.
| Institution | Regulator(s) | Violation | Penalty | Period covered | HMDA/fair-lending data field involved |
|---|---|---|---|---|---|
| Hudson City Savings Bank | Justice Department; Consumer Financial Protection Bureau (CFPB) | Redlining predominantly Black and Hispanic neighborhoods in residential mortgage lending, in violation of the Fair Housing Act and Equal Credit Opportunity Act (ECOA) | $25 million loan subsidy fund; $2.25 million for advertising, outreach, financial education, and community partnership efforts; two new full-service branches; $5.5 million civil monetary penalty (total over $27 million) | At least 2009 to 2013 | — |
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