Consumer Financial Services Alert - February 7, 2012

The Consumer Financial Protection Bureau started a third round of testing of its mortgage loan disclosure drafts.  In this round, the CFPB is asking for comments on how two mortgage closing disclosure prototypes work with its current application disclosure prototype. The CFPB asks for consideration of a number of questions, including whether changes to loan terms or costs from application to closing can be easily identified. Click here for the CFPB blog post publicizing this round which includes useful background information and links to the prototypes.

The Consumer Financial Protection Bureau announced a joint effort among its Office of Servicemember Affairs, state Attorneys General and the Department of Defense to combat financial scams directed at servicemembers, veterans, and their families. The CFPB has created the Repeat Offenders Against Military Database to track companies and individuals who repeatedly target the military community. The database will have information on formal actions against perpetrators of financial schemes against the military.  Law enforcement officials across the country, including state Attorneys General, United States Attorneys, local officials, and Judge Advocates will be able to contribute to and search the database. Click here for the CFPB announcement.

The Treasury Department announced enhancements to the Home Affordable Modification Program by extending HAMP through December 31, 2013, expanding borrower eligibility, and encouraging principal reduction modifications through new and increased incentives. Click here for Treasury’s blog entry announcing the enhancements.

FinCEN finalized regulations that require non-bank residential mortgage lenders and originators to establish anti-money laundering programs and file suspicious activity reports under the Bank Secrecy Act as required of other types of financial institutions. The final rule will be effective 60 days after publication in the Federal Register and the compliance deadline is six months after publication which is expected shortly. Click here for the final rule.

The CFPB issued a memorandum to persons providing comments on the Bureau’s “financial aid shopping sheet thought starter” – a discussion piece published by the Bureau on how schools might improve the information they present to prospective students and their families on college costs and student loans. Commenters most frequently expressed interest in improvements in the following areas:  estimated debt at graduation, estimated monthly payment after graduation, ability to repay loans, complete breakdown of cost at school by category, and whether students at a particular school have been able to repay loans. Click here for the memorandum.

HUD issued a final rule designed to provide equal access to housing, regardless of sexual orientation, gender identity, or marital status. The rule (1) prohibits owners and operators of HUD-assisted housing or housing for which financing is insured by HUD from obtaining information from applicants about sexual orientation and gender identity, and requires owners and operators to make housing available without regard to those factors, and (2) prohibits lenders from making FHA-insured financing eligibility determinations based on sexual orientation or gender identity.  The rule is effective on March 5, 2012. Click here for the rule.