Top Story Lending Related

The Federal Emergency Management Agency has published a rule in today's Federal Register identifying communities in California, Colorado and Iowa that have been scheduled for suspension from the National Flood Insurance Program on April 4, 2018, for noncompliance with the floodplain management requirements of the program. Communities to be suspended include:

• CA: City of Thousand Oaks, Ventura County; unincorporated areas of Ventura County; City of Westlake Village, Los Angeles and Ventura Counties.
• CO: Cities of Brush and Fort Morgan, Morgan County; unincorporated areas of Morgan County.
• IA: City of Corwith, Hancock County; Forest City, Hancock and Winnebago Counties; City of Garner, Hancock County; City of Woden, Hancock County; unincorporated areas of Hancock County.

The FDIC has announced settlements with Cross River Bank, Teaneck, New Jersey, and its institution-affiliated party, Freedom Financial Asset Management, LLC (FFAM), San Mateo, California, for unfair and deceptive practices in violation of Section 5 of the Federal Trade Commission Act related to the marketing and origination of Consolidation Plus Loans (C+ Loans). In addition, the FDIC found the bank and FFAM violated TILA and EFTA.

As part of the settlement, Cross River Bank and FFAM stipulated to the issuance of Consent Orders, Orders for Restitution, and Orders to Pay Civil Money Penalties and required restitution to harmed consumers. Twenty million dollars have been placed in a segregated account for the purpose of providing restitution to harmed consumers. Additionally, the FDIC Orders assess civil money penalties of $641,750 against the bank, and $493,500 against FFAM.

For additional information and links to the FDIC's orders, see our Penalty page.

The OCC has announced it will host two workshops in Memphis, Tennessee, on May 8 and 9, for directors of national community banks and federal savings associations.

• The Compliance Risk workshop on May 8 will address the critical elements of an effective compliance risk management program. The workshop also focuses on major compliance risks and critical regulations. Topics of discussion include the Bank Secrecy Act, Flood Disaster Protection Act, Fair Lending, Home Mortgage Disclosure Act, Community Reinvestment Act, and other compliance areas of interest.
• The Operational Risk workshop on May 9 focuses on the key components of operational risk—people, processes, and systems. The workshop also covers governance, third-party risk, vendor management, internal fraud, and cybersecurity. The fee for each workshop is $99 and each session is limited to 35 registrants.

The FHFA February Index has been released. It indicates that, nationally, interest rates on conventional purchase-money mortgages increased from January to February, according to several indices of new mortgage contracts.

• The National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders Index was 4.28 percent for loans closed in late February, up 16 basis points from 4.12 percent in January.
• The average interest rate on all mortgage loans was 4.24 percent, up 14 basis points from 4.10 in January.
• The average interest rate on conventional, 30-year, fixed-rate mortgages of $453,100 or less was 4.36 percent, up 17 basis points from 4.19 in January.
• The effective interest rate on all mortgage loans was 4.34 percent in February, up 18 basis points from 4.16 in January. The effective interest rate accounts for the addition of initial fees and charges over the life of the mortgage.
• The average loan amount for all loans was $311,900 in February, up $13,500 from $298,400 in January.

The OCC has announced it will host a workshop in Glendale, California, May 1–2, for directors, senior management team members, and other key executives of national community banks and federal savings associations supervised by the OCC. The Building Blocks: Keys to Success for Directors and Senior Management workshop combines lectures, discussion, and exercises to provide practical information on the roles and responsibilities of board participation. Taught by seasoned OCC supervision staff, the workshop focuses on duties and core responsibilities of directors and management, discusses major laws and regulations, and increases familiarity with the examination process.

The Federal Reserve Board has announced it has issued a Notice of Intent to Prohibit and Notice of Assessment of civil money penalties to Nathaniel Frazier and Jeffrey Garrison, former employees of Regions Bank, Birmingham, Alabama. Frazier, a former branch manager at Regions Bank, and Garrison, a former financial services specialist at Regions Bank, are alleged to have made false entries in Regions Bank's records by improperly inflating credit applicants' reported income and, in Garrison's case, opening credit card accounts without customer authorization. The Federal Reserve Board's enforcement action alleges that Frazier's and Garrison's conduct constituted violations of law and unsafe or unsound banking practices. The Notice states the Board's intent to impose civil money penalties of $18,936 on Frazier and $9.468 on Garrison.

UPDATE: The Board of Governors announced on June 21, 2018, that it had issued final prohibition orders against Frazier and Garrison.

The Federal Reserve has revised its index of industrial production (IP) and the related measures of capacity and capacity utilization. Net revisions to total IP for recent years were negative: For the 2015–17 period, the current estimates show rates of change that are 0.4 to 0.7 percentage point lower in each year. Total IP is still reported to have moved up about 22 1/2 percent from the end of the recession in mid-2009 through late 2014. Subsequently, the index declined in 2015, edged down in 2016, and increased in 2017. Revisions to capacity for total industry were mixed. Capacity growth was revised up about 1/2 percentage point for 2016, but revisions to other recent years were negative. Capacity for total industry is estimated to have expanded less than 1 percent in 2015, 2016, and 2017, but it is expected to increase about 2 percent in 2018.

The Federal Housing Finance Agency (FHFA) has released its fourth quarter Foreclosure Prevention Report, which shows that Fannie Mae and Freddie Mac completed 67,569 foreclosure prevention actions in the fourth quarter of 2017, bringing the total number of homeowners helped to 4,040,258 since the start of the conservatorships in September 2008. The percentage of 60+ days delinquent loans rose from 1.32 percent to 1.65 percent at the end of the fourth quarter, primarily as result of the impact of Hurricanes Harvey, Irma and Maria in Texas, Florida and Puerto Rico.

The Federal Housing Finance Agency (FHFA) has released its January 2018 Housing Price Index, which indicates U.S. house prices rose in January, up 0.8 percent from December 2017. The FHFA monthly HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac. From January 2017 to January 2018, house prices were up 7.3 percent. For more information see the FHFA HPI FAQs.

The operators of a deceptive and abusive debt collection scheme are banned from the debt collection business and from buying or selling debt under settlements with the Federal Trade Commission and the New York Attorney General’s Office. The defendants were also assessed penalties totaling over $78 million, with over $1 million in assets to be surrendered, and the balance of the penalties suspended. A complaint filed in federal court by the agencies had alleged the defendants used threats and abusive language, including false threats that consumers would be arrested or sued, to collect supposed debts. See "Abusive debt collectors banned and fined" in our Penalties pages for details.