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Yesterday, the CFPB announced its has banned private dispute resolution platform Ejudicate from arbitrating disputes about consumer financial products after the company misled student borrowers about its neutrality and initiated sham arbitration proceedings. Ejudicate initiated those proceedings for the company Prehired, which was permanently shut down in 2023 by the CFPB and several state attorneys general for its illegal lending practices. Ejudicate acted as a service provider to Prehired by providing these sham arbitration services. The CFPB found that Ejudicate treated borrowers unfairly and was not truthful about its role while hiding that its financial interests were aligned with Prehired.

The Federal Housing Finance Agency yesterday announced new national datasets on price trends for manufactured homes.

Following yesterday’s release, pricing data for manufactured homes will be updated quarterly and included along with the flagship FHFA HPI — released monthly and quarterly — featuring publicly available data series on trends in single-family home prices. The new data release for manufactured homes includes purchase-only as well as all-transactions house price indexes (the latter combining purchase and refinance data). Both measure quarterly changes in prices since 2000, on a national scale, based on repeat-sale transactions for individual homes. The data series on median manufactured home prices list the national median prices in dollars for every quarter since the beginning of 1985. The price indexes and data on median prices are still in development and may undergo changes in the future.

According to the FHFA, house price indexes for manufactured homes increased by 7.9 percent between the second quarters of 2023 and 2024. They increased by 3.2 percent in the second quarter of 2024 compared with the first quarter. In the second quarter of 2024, the median price of manufactured homes for sale was $231,000. This represents an increase of $1,000 from the second quarter of 2023.

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Our monthly review of the Federal Reserve Board's CRA Evaluation Archives reveals that in September the Reserve Banks released 18 evaluations of state-chartered member banks. Fifteen of those banks received Satisfactory ratings.

Outstanding ratings were attached to the evaluations of Stifel Bank, Saint Louis, Missouri; Stifel Bank and Trust, Saint Louis, Missouri; and The Farmers and Merchants Bank of Craig County, New Castle, Virginia.

Yesterday, the CFPB announced it had published a new edition of Supervisory Highlights describing the agency’s supervisory findings between November 2023 and August 2024 related to illegal practices in auto finance, including lenders repossessing consumers’ cars after the borrower made timely payments or received loan extensions.

Other illegal conduct detailed in the report includes lenders providing inaccurate disclosures, misapplying loan payments, and putting incorrect information on consumers’ credit reports. The report also highlights significant problems with add-on products that are packaged at the front-end of the auto loan, increasing the loan costs, and then not properly refunded at the back end upon early loan termination, when the consumer can no longer use the products.

Yesterday, the OCC reported it had issued a proclamation allowing national banks, federal savings associations, and federal branches and agencies of foreign banks to close offices in areas of Florida affected by Hurricane Milton.

In issuing the proclamation, the OCC expects that only those bank offices directly affected by potentially unsafe conditions will close. Those offices should make every effort to reopen as quickly as possible to address the banking needs of their customers.

• OCC Bulletin 2012-28, Supervisory Guidance on Natural Disasters and Other Emergency Conditions

The CFPB, Federal Reserve Board, and OCC have announced that the 2025 threshold for higher-priced mortgage loans (HPMLs) that are subject to special appraisal requirements will increase from $32,400 to $33,500, effective January 1, 2025. The increase is based on the 3.4 percent annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), as of June 1, 2024.

The change will add paragraph xii. to Official Interpretation comment 35(c)(2)(ii)-3.

The CFPB and the Federal Reserve Board have also announced the dollar thresholds used to determine whether certain credit and lease transactions in 2025 will be subject to certain protections under Regulation Z (Truth in Lending) and Regulation M (Consumer Leasing).

Based on the CPI-W increase noted above, Regulation Z and Regulation M generally will apply to consumer credit transactions and consumer leases of $71,900 or less in 2025 (private education loans and loans secured by real property or by personal property used or expected to be used as the principal dwelling of the consumer, such as mortgages, are subject to Regulation Z regardless of the amount of the loan). The changes will add paragraph 3(b)-3.xvi. to the Official Interpretations of Regulation Z and paragraph 2(e)-11.xvi. to the Official Interpretations of Regulation M.

Each of the changes above has been made to the BankersOnline Regulations pages.

The FDIC has issued its list of 55 state nonmember banks recently evaluated for CRA compliance whose evaluations were assigned in July 2024. Three banks received "Needs to Improve" ratings. One was rated "Substantial Noncompliance." Forty-eight banks received "Satisfactory" ratings.

We congratulate The Dime Bank (Honesdale, PA), Beardstown Savings S.B. (Beardstown, IL), and Toyota Financial Savings Bank (Henderson, NV), for receiving "Outstanding" ratings.

The Federal Reserve Board has released two enforcement actions.

The OCC has issued Bulletin 2024-29 to provide OCC-supervised institutions with commercial loans with guidance for managing credit risk associated with refinance risk, and has rescinded Bulletin 1993-50, "Loan Refinancing."

According to the Bulletin, refinance risk is the risk that borrowers will not be able to replace existing debt at a future date under reasonable terms and prevailing market conditions. Refinance risk increases in rising interest rate environments and can be amplified by large volumes of loans set to mature in underperforming markets. If a borrower cannot refinance under current market conditions, a bank could be burdened with an underperforming or nonperforming loan. Refinance risk primarily affects loans with principal balances remaining at maturity and borrowers who rely on recurring debt to finance their capital structure or business operations. Examples of loan types most affected by refinance risk include interest-only loans, commercial real estate loans, leveraged loans, and revolving working capital lines. Fully amortizing loans to sound borrowers generally have lower refinance risk than loans that are not fully amortizing.

Banks should have processes to identify, measure, monitor, and control refinance risk at both the transaction and portfolio levels. The tools to monitor refinance risk should be tailored to the bank’s size, complexity, risk profile, and types of lending. Sound transaction-level credit risk management practices include assessing refinance risk at underwriting, during ongoing monitoring, and near maturity. At the portfolio level, banks should have systems and processes to monitor the volume and cadence of upcoming loan maturities. Independent credit risk review should consider the level of refinance risk when determining an appropriate review scope and assessing credit quality.

The FDIC has released the 2024 Small Business Lending Survey Report (SBLS). Conducted in 2022, the SBLS is a nationally representative sample of U.S. banks that offers important insights into their small business lending practices and how banks meet the credit needs of the nation’s small businesses.

The SBLS gathered responses from over a quarter of the nation’s banks on the way they approve and underwrite small business loans, their geographic markets and competition, their use of financial technology, and their lending to start-ups. Overall, the FDIC’s survey found that while most banks are adopting new technologies, these innovations have not replaced the relationship-oriented and staff-intensive nature of small business lending that continues to be focused around local branch office locations.