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The Federal Housing Finance Agency (FHFA) on June 11, 2024, issued a request for input on the proposed 2025-2027 Underserved Markets Plans submitted by Fannie Mae and Freddie Mac (the Enterprises) under the Duty to Serve (DTS) program. The proposed Plans cover the period from January 1, 2025, to December 31, 2027.

The FHFA issued a final rule in 2016 that implemented the DTS provisions of the Housing and Economic Recovery Act of 2008. The statute requires the Enterprises to serve three specified underserved markets — manufactured housing, affordable housing preservation, and rural housing — by increasing the liquidity of mortgage financing for very low-, low-, and moderate-income families in those markets.

The FHFA invites interested parties to provide written input, feedback, and information on all aspects of the proposed Plans by August 12, 2024.

• Fannie Mae's proposed 2025-2027 Underserved Markets Plan
• Freddie Mac's proposed 2025-2027 Underserved Markets Plan

On June 11, the CFPB announced a proposed rule [published in the Federal Register at 89 FR 51682 on 6/18/2024] that would remove medical bills from most credit reports, increase privacy protections, help to increase credit scores and loan approvals, and prevent debt collectors from using the credit reporting system to coerce people to pay. The proposal would stop credit reporting companies from sharing medical debts with lenders and prohibit lenders from making lending decisions based on medical information. The proposed rule is part of the CFPB’s efforts to address the burden of medical debt and coercive credit reporting practices.

In 2003, Congress restricted lenders from obtaining or using medical information, including information about debts, through the Fair and Accurate Credit Transactions Act. However, federal agencies subsequently issued a special regulatory exception to allow creditors to use medical debts in their credit decisions. The CFPB is proposing to close the regulatory loophole that has kept vast amounts of medical debt information in the credit reporting system. The proposed rule would help ensure that medical information does not unjustly damage credit scores, and would help keep debt collectors from coercing payments for inaccurate or false medical bills.

Specifically, the proposed rule, if finalized would:

• Eliminate the special medical debt exception
• Establish guardrails for credit reporting companies
• Ban repossession of medical devices

Comments on the CFPB's proposal will be accepted through August 12, 2024. The CFPB proposes to make the final rule, when issued, effective 60 days after it is published in the Federal Register.

• Unofficial redline of the proposed rule amendments to Regulation V
• Fast Facts on the proposal

The Treasury Department has released a Request for Information on the Uses, Opportunities, and Risks of Artificial Intelligence (AI) in the Financial Services Sector.

Through this RFI, Treasury seeks to increase its understanding of how AI is being used within the financial services sector and the opportunities and risks presented by developments and applications of AI within the sector, including potential obstacles for facilitating responsible use of AI within financial institutions, the extent of impact on consumers, investors, financial institutions, businesses, regulators, end-users, and any other entity impacted by financial institutions’ use of AI, and recommendations for enhancements to legislative, regulatory, and supervisory frameworks applicable to AI in financial services. Treasury is particularly interested in understanding how AI innovations can help promote a financial system that delivers inclusive and equitable access to financial services.

UPDATE: Published at 89 FR 50048 in the June 12, 2024, Federal Register, with a comment period ending on August 12, 2024.

The Federal Reserve Board has announced that results from its annual bank stress tests will be released on Wednesday, June 26, at 4:30 p.m. EDT. Aggregate results from the Board's first exploratory analysis, which will not affect bank capital requirements, will also be released at that time.

This year, 32 banks with $100 billion or more in total assets are subject to the Board's stress tests. The scenario includes a severe global recession with heightened stress in commercial and residential real estate markets. Separately, the exploratory analysis includes four separate hypothetical elements, including two funding stresses applied to all banks tested and two market shocks applied to only the largest and most complex banks.

The NCUA has released its Quarterly Credit Union Data Summary for the quarter ending March 31, 2024.

According to the report, total assets in federally insured credit unions rose by $96 billion, or 4.4 percent, over the year ending in the first quarter of 2024 to $2.31 trillion. During the same period, total loans outstanding increased $71 billion, or 4.6 percent, to $1.60 trillion. Insured shares and deposits rose $40 billion, or 2.3 percent, to $1.77 trillion, from one year earlier. The delinquency rate at federally insured credit unions was 78 basis points in the first quarter of 2024, up 25 basis points compared with the first quarter of 2023.

Credit unions with assets over $1 billion were required to provide information on overdraft and NSF fees collected during the quarter. There were 443 credit unions that provided that information, with total assets of $1.781 trillion for the group. Those CUs reported $915.6 million in overdraft and NSF fees for the quarter. Forty-five of those CUs reported $0 in NSF fees. Twenty-five reporting CUs showed no overdraft fees, and nine CUs reported they collected neither NSF nor overdraft fees during the quarter.

The FDIC has issued FIL-32-2024 with guidance to provide regulatory relief to financial institutions and facilitate recovery in areas of Arkansas — Benton, Boone, and Marion Counties — affected by severe storms, straight-line winds, tornadoes and flooding May 24–27, 2024.

The FDIC has issued its June 2024 list of banks examined for CRA Compliance, which includes 61 financial institutions whose CRA evaluation ratings were assigned in March 2024. Fifty-three of those evaluations were rated Satisfactory. Four banks' evaluations were rated Outstanding:

• Cape Cod Five Cents Savings Bank, The, Hyannis, Massachusetts
• Medallion Bank, Salt Lake City, Utah
• Stock Exchange Bank, The, Woodward, Oklahoma
• Tustin Community Bank, Tustin, California

Four of the banks' evaluations were rated Needs to Improve:

• Century Bank of Kentucky, Inc., Lawrenceburg, Kentucky
• First Bank of Ohio, Tiffin, Ohio
• Milestone Bank, Salt Lake City, Utah
• United Savings Bank, Philadelphia, Pennsylvania

The OCC has released 19 CRA evaluations that became public in May for national banks and federal savings associations. Eleven of those institutions received rating of Satisfactory. Eight institutions received ratings of Outstanding:

• PNC Bank, National Association, Wilmington, Delaware
• First National Bank, Cloverdale, Indiana
• United Fidelity Bank, F.S.B., Evansville, Indiana
• Industrial Commercial Bank of China (USA), National Association, New York, New York
• Keybank National Association, Cleveland, Ohio
• Texas National Bank, Mercedes, Texas
• Community National Bank, Derby, Vermont
• Hilltop National Bank, Casper, Wyoming

The Federal Reserve Board's archive of CRA evaluations of state member banks shows that the Reserve Banks made public ten CRA evaluation in May. Eight of those evaluations were rated Satisfactory, and Outstanding ratings were assigned to:

• Bank of Hawaii, Honolulu, Hawaii
• First State Bank, Anadarko, Oklahoma

The FDIC has posted its Community Reinvestment Act examination schedules for the third and fourth quarters of 2024.

The CFPB has reported it has sued student loan servicer Pennsylvania Higher Education Assistance Agency (PHEAA), which does business as American Education Services (AES), for illegally collecting on student loans that have been discharged in bankruptcy and sending false information about consumers to credit reporting companies. The CFPB’s lawsuit asks the court to order PHEAA to stop its illegal conduct, provide redress to borrowers it has harmed, and pay a civil penalty.

PHEAA is a student loan servicer with its principal office in Harrisburg, Pennsylvania. It is a public corporation organized under the laws of the Commonwealth of Pennsylvania. As of December 2023, PHEAA serviced a portfolio of student loans worth roughly $17.8 billion.

The United States Bankruptcy Code provides consumers a financial fresh start by discharging debts and prohibiting creditors from collecting on discharged debts. Many student loans, both federal and private, can be discharged in bankruptcy only if a borrower initiates a separate proceeding and meets a more stringent legal standard than is applied to other debts. However, certain private student loans are discharged in normal bankruptcy proceedings like other unsecured consumer debt. These “non-qualified” private student loans include money borrowed to pay for tuition at schools that do not qualify for federal Title IV funding, such as unaccredited trade or K-12 schools, loans for medical and dental residency, loans to students attending school less than half-time, or loans where the loan amount was higher than the cost of attendance (which can occur when a loan is disbursed directly to a consumer).

AES services a range of private student loans, including those that have strict discharge requirements in bankruptcy and non-qualified loans that are routinely discharged. Nevertheless, when a consumer with private student loans serviced by AES receives a bankruptcy discharge, the company’s practice is to treat all of that consumer’s education-related loans as not discharged, unless it receives an explicit court order or other express direction from the loan owner.

In March 2023, the CFPB issued a bulletin warning the industry about this issue, detailing how supervisory examinations had found some student loan servicers illegally returning loans to collections after bankruptcy courts had discharged the loans.

The CFPB's complaint alleges that, between 2017 and 2021, AES collected or attempted to collect on approximately 7,934 private student loans after a bankruptcy proceeding. Although discovery in litigation will reveal the total scope of PHEAA’s unlawful collection activity, the Bureau says at least 177 were loans eligible for discharge in bankruptcy. Borrowers were thus subjected to illegal collections on loans they did not owe. AES also furnishes inaccurate information to credit reporting companies regarding borrowers’ outstanding debt, which causes financial harm to consumers and may make it harder to qualify for other credit in the future.

This is the CFPB’s second public enforcement action against PHEAA this year. On May 6 the CFPB filed a complaint and proposed stipulated judgment, which, if approved by the court, would require PHEAA and the National Collegiate Student Loan Trusts to pay more than $5 million for student loan servicing failures, including failing to provide accurate information to borrowers and incorrectly denying forbearance requests.