News

2018 Consumer Response Annual Report - CFPB

The Consumer Financial Protection Bureau began consumer response operations on July 21, 2011, and became the first federal agency solely focused on consumer financial protection. The Bureau’s Consumer Response team hears directly from consumers about the challenges they face in the marketplace, brings their concerns to the attention of financial institutions, and assists in addressing their complaints.


HMDA Modified Loan Application Registers Released - ABI

WASHINGTON, D.C. — Today, the Home Mortgage Disclosure Act (HMDA) Modified Loan Application Registers (LARs) data were published for approximately 5,400 financial institutions. This is the first year in which additional data reported by certain institutions under the 2015 HMDA rule will be available. The Modified LARs contains loan level information for 2018 on individual HMDA filers, modified to protect privacy.


Payday Lenders Get Unexpected Reprieve from CFPB Rule - American Banker

A federal judge delivered another victory to payday lenders by leaving in place a stay on the compliance date for the Consumer Financial Protection Bureau’s 2017 payday lending rule, American Banker reported. That rule, drafted under former CFPB Director Richard Cordray, had two key components: new underwriting requirements for high-cost, small-dollar lenders, and limits on how often a lender can attempt debiting payments from a borrower's bank account. The CFPB under Trump-appointed Director Kathleen Kraninger already proposed eliminating the underwriting portion. But in a surprising development, U.S. District Judge Lee Yeakel's ruling that a stay of the Aug. 19 deadline will remain in effect means the payment provision will continue to be delayed as well. Yeakel, who did not indicate when he would lift the stay, is presiding over an industry lawsuit in Texas seeking to kill the rule. Once the Trump administration took control of the CFPB, the bureau sided with the plaintiffs in the case and announced its intent to reopen the rule and propose changes. The judge issued the stay in November to give the agency time to formulate a proposal.


Investors Keep Puerto Rico Bonds After First Chapter of Restructuring - The Wall Street Journal

Investors are hanging on to bonds issued as part of Puerto Rico’s massive restructuring effort, a sign of confidence in the fiscally troubled island’s prospects, the Wall Street Journal reported. Prices have edged higher for $12 billion in new debt backed by sales taxes that Puerto Rico issued several weeks ago. The bonds, known by their Spanish acronym as Cofinas, were issued to investors including hedge funds as part of the U.S. territory’s financial restructuring, marking the first settlement in ongoing negotiations to fix its broken finances. Though the bonds’ prices have pared some of their earlier gains, one slice of newly issued sales tax bonds recently traded with an average price of about $95.44, up from $93.00 last month, according to Refinitiv’s Municipal Market Data.


Banks seek Congress’ help to block fintech path to ‘industrial’ charters - Roll Call

A bank industry group is lobbying Congress to block financial technology firms, such as online lender Social Finance Inc. and payment processor Square Inc., from obtaining an obscure form of a state bank charter that would let them operate nationally with little federal supervision. The Independent Community Bankers of America last week distributed a policy paper around Washington calling for an immediate moratorium on providing federal deposit insurance to industrial loan companies, or ILCs, which are chartered by only a few states — most notably Utah.


Investors Eagerly Await Trump Rules on Opportunity Zones - ABI

A new batch of tax regulations from the Treasury Department will establish the most comprehensive guidelines yet for what sorts of investments qualify for tax benefits associated with opportunity zones, which were created by the 2017 tax law, and how investors must proceed in order to take advantage of them, The New York Times reported. Civic leaders are hoping the rules will be broad enough to improve the odds of attracting new businesses that offer well-paying jobs to residents. Investors are also clamoring for guidelines that could determine the types of projects they can back. Among the money dependent on the Trump administration’s rules is $22 million in investment guarantees, to be announced Monday, to support two socially conscious investment funds that hope to pour $800 million into manufacturing, clean energy and other business development in Opportunity Zones. The zones are a creation of President Trump’s signature tax law that use tax advantages to lure capital to economically lagging cities, suburbs and rural areas. So far, they have stirred growing investor interest and criticism from some tax experts who worry they will serve mostly as a handout to the rich. Most of the projects spurred so far by the zone designations are real estate, like condominium developments, or hospitality. Whether the zones can ultimately spur other types of investment will depend on how the rules are structured. The tax break works by allowing investors to roll capital gains from other investments into the funds. Taxes on those original gains are deferred and, if the investment is held for several years, can be sharply reduced. Adding to the attraction is the potential for investors who hold their money in the opportunity fund for a full decade to be exempt from any capital gains taxes on that investment.


Senators Want a Boost for the SEC’s Financial Recovery Powers - ABI

A bipartisan pair of U.S. senators want to give Wall Street’s top cop more power to recover funds for burned investors, the Wall Street Journal reported. The legislation, to be introduced today, would allow the Securities and Exchange Commission to recover money for harmed investors based upon wrongdoing that occurred as much as a decade ago. The measure would help restore some of the muscle the SEC lost when the Supreme Court unanimously decided in 2017 that federal regulators are bound by a five-year statute of limitations. Sens. John Kennedy (R-La.) and Mark Warner (D-Va.) said that the bill would give the SEC more time to spot hard-to-detect financial crimes. “Financial fraudsters can sometimes go on for years, even decades, before they finally get caught,” Warner said in a written statement. “They shouldn’t be able to rip off investors just because some arbitrary five-year window has expired.” Last year, SEC Chairman Jay Clayton told a House committee that regulators should have the authority to seek restitution for harmed investors beyond the five-year window.


U.S. Leveraged Loan Default Rate Dips To 7-Year Low - ABI

S&P Global's LCD News found in analysis that despite mounting concern from high-profile regulators concerning the asset class, the default rate on U.S. leveraged loans just dipped to 0.93 percent, its lowest level in almost seven years, Forbes reported. The current rate is down from the already-low 1.62 percent in February. The cause for that relatively steep drop is not a dramatic decrease in loan issuers filing chapter 11 — indeed, defaults have been scarce for years as booming corporate earnings and easy access to credit buoyed all but the most troubled speculative-grade borrowers — but a benchmark name falling off the rolling 12-month calculation on which the default rate is based, according to the analysis. iHeart this month exited the default rate calculation. When the broadcast and internet radio concern filed chapter 11 last March it did so with some $6.3 billion in outstanding term debt, making it one of the largest leveraged loan bankruptcies ever. That filing helped boost the default rate to 2.42 percent at the time, a three-year high, according to LCD's Rachelle Kakouris.


CoreLogic Reports U.S. Overall Delinquency and Foreclosure Rates Lowest for December - ABI

CoreLogic, a leading global property information, analytics and data-enabled solutions provider, today released its monthly Loan Performance Insights Report. The report shows that, nationally, 4.1 percent of mortgages were in some stage of delinquency (30 days or more past due, including those in foreclosure) in December 2018, representing a 1.2 percentage point decline in the overall delinquency rate compared with December 2017, when it was 5.3 percent.  As of December 2018, the foreclosure inventory rate – which measures the share of mortgages in some stage of the foreclosure process – was 0.4 percent, down 0.2 percentage points from December 2017. The December 2018 foreclosure inventory rate tied the November 2018 rate as the lowest for any month since at least January 2000.  Measuring early-stage delinquency rates is important for analyzing the health of the mortgage market. To monitor mortgage performance comprehensively, CoreLogic examines all stages of delinquency, as well as transition rates, which indicate the percentage of mortgages moving from one stage of delinquency to the next.


New Overtime Rule Expected to Boost Pay Eligibility - ABI

Rep. Tim Ryan (D-Ohio) said that he plans to reintroduce 2017 legislation that would define worker claims in bankruptcy as administrative expenses, meaning they’d be paid in full, like the investment bankers, consultants, lawyers and liquidators who earn millions of dollars dismantling dying companies, Bloomberg News reported. It comes after 19 Democrats, including Ryan and presidential candidates Bernie Sanders and Tulsi Gabbard, teamed up in July to demand answers from Toys “R” Us’ owners after its bankruptcy left workers in the lurch. Rep. Alexandria Ocasio-Cortez (D-N.Y.) released a video featuring struggling former Toys “R” Us workers on the first Black Friday since their layoffs. And Sen. Elizabeth Warren (D-Mass.), another 2020 candidate, publicly challenged former Sears Chairman Eddie Lampert’s “commitment to the company’s employees” in a January letter. Ryan's bill would prioritize pension claims for fired workers when their companies go under. It joins legislation to hike taxes on the wealthiest Americans, provide wage and leave guarantees and restrict corporate share buybacks. Though the bill is a longshot to become law because it would have to pass the Republican Senate, it could lead to legislation on the state level that would complicate the bankruptcy process.