Top Story Lending Related

Yesterday, the Federal Reserve Board, CFPB, FDIC, OCC, FinCEN, NCUA and state financial regulators issued a joint press release to announce a joint Statement on Elder Financial Exploitation.

The eleven-page Statement provides supervised institutions with examples of risk management and other practices that may be effective in combating such exploitation.

• FDIC FIL-83-2024
• OCC Bulletin 2024-34

The CFPB yesterday announced it has taken action to permanently ban Student Loan Pro and Judith Noh, its owner, from offering or providing consumer financial products. The CFPB alleges that Student Loan Pro and Noh violated federal law by charging borrowers upfront fees to file paperwork on their behalf to access free debt-relief programs available to consumers with federal student loans. The CFPB’s stipulated judgment, if entered by the court, would also require Noh to take steps to dissolve Student Loan Pro and a related business, FNZA Marketing, LLC, and pay a civil money penalty.

According to the CFPB's press release, Student Loan Pro is a California sole proprietorship formed in 2015 by Noh that telemarketed debt-relief services for consumers with federal student loan debt. The CFPB filed a lawsuit in 2021 alleging that Student Loan Pro, Noh, and Syed Gilani—Student Loan Pro’s manager and owner-in-fact—violated the Telemarketing Sales Rule by requesting and receiving advance fees, initially running as high as $795, for its debt-relief services. The company’s services included filing paperwork on consumers’ behalf to apply for programs that were already available to borrowers for free from the United States Department of Education.

The Federal Trade Commission's Telemarketing Sales Rule (16 C.F.R. part 310) prohibits sellers and telemarketers from requesting or receiving advance fees for any debt-relief service before renegotiating, settling, reducing, or otherwise altering the terms of at least one of a consumer’s debts, and before a consumer has made at least one payment on such altered debt. Student Loan Pro’s advance-fee violations cost approximately 3,300 consumers nearly $3.5 million in advance fees.

• CFPB Complaint
• Proposed stipulated judgment and order

The OCC has issued Bulletin 2024-33 announcing it has issued version 1.1 of its “Unfair or Deceptive Acts or Practices and Unfair, Deceptive, or Abusive Acts or Practices” booklet of the Comptroller’s Handbook. The booklet contains information for examiners regarding supervision of a bank’s practices related to section 5 of the Federal Trade Commission Act, which prohibits banks from engaging in unfair or deceptive acts or practices (UDAP), and sections 1031 and 1036 of the Dodd-Frank Act, which prohibit unfair, deceptive, or abusive acts or practices (UDAAP).

The updated booklet—

• provides further clarity regarding sound risk management practices and guidance to examiners regarding overdraft services.
• incorporates updates from the Consumer Financial Protection Bureau regarding data protection and information security.
• includes an updated version of the “Appendix B: UDAP and UDAAP Risk Indicators.”
• reflects OCC and interagency issuances that have been published or rescinded since June 2020.
• includes other minor updates for general clarity.

The FDIC has released its December 2024 list of banks examined for CRA compliance. This month's list includes 65 institutions whose most recent CRA evaluations have been made public. CRA evaluations are assigned one of four ratings: Outstanding, Satisfactory, Needs to Improve, or Substantial Non-compliance.

The December 2024 list includes 60 banks whose evaluations were rated Satisfactory. Two banks — one in Brentwood, Tennessee, and one in New York, New York — were rated "Needs to Improve.

We congratulate three institutions whose evaluations were rated Outstanding:

• Bank of Wiggins, Wiggins, Mississippi
• Liberty Bank, Middletown, Connecticut
• Waukesha State Bank, Waukesha, Wisconsin

The OCC has released a list of 19 OCC-supervised financial institutions whose Community Reinvestment Act performance evaluations became public during November. The list includes 16 institutions that received evaluation ratings of "Satisfactory," and the following three whom we congratulate for receiving "Outstanding" ratings:

• Evergreen Federal Bank, Grants Pass, Oregon
• FNC Bank, National Association, Brookville, Indiana
• Santander Bank, National Association, Wilmington, Delaware

The FDIC has posted its CRA Examinations Schedules for the first quarter and second quarter of 2025. The schedules can be sorted by location, bank name, and other criteria.

There are 238 evaluations scheduled for the first quarter, and 210 for the second quarter.

The FDIC has released a list of enforcement orders issued in October 2024.

• The Stockgrowers State Bank, Maple Hill, Kansas, was assessed a $5,250 civil money penalty (CMP) for violations of the Flood Disaster Protection Act and National Flood Insurance Act.
• First & Peoples Bank and Trust Company, Russell, Kentucky, paid a $1,500 CMP for engaging in a pattern or practice of committing violations of the National Flood Insurance Act and 12 C.F.R. § 339.7(a), by failing to follow force placement flood insurance procedures for three loans.
• Bank of Frankewing, Frankewing, Tennessee, received a consent order regarding lending-related concerns, management succession, budgeting, capital, and violations noted in a November 2023 Visitation Report.
• John C. Ponte, formerly a loan referral agent for Independence Bank, East Greenwich, Rhode Island, was issued an Order of Prohibition and Order for Restitution of $1 million, for violations of regulations and unsafe and unsound practices in connection with the bank, causing the bank to suffer financial loss and Ponte to receive financial gain.

The Department of Housing and Urban Development has announced new loan limits for calendar year 2025 for its Single Family Title II forward and Home Equity Conversion Mortgage (HECM) mortgage insurance programs. Loan limits for most of the country will increase in the coming year due to the continued appreciation of home prices over the past year.

The Federal Housing Finance Agency yesterday announced the conforming loan limit values (CLLs) for mortgages acquired by Fannie Mae and Freddie Mac (the Enterprises) in 2025. In most of the United States, the 2025 CLL value for one-unit properties will be $806,500, an increase of $39,950 (or 5.2 percent) from 2024.

The FHFA also published its third quarter 2024 FHFA House Price Index (FHFA HPI) report, which includes statistics for the increase in the average U.S. home value over the last four quarters. According to the nominal, seasonally adjusted, expanded-data FHFA HPI, house prices increased 5.21 percent, on average, between the third quarters of 2023 and 2024. Therefore, the baseline CLL in 2025 will increase by the same percentage.

For areas in which 115 percent of the local median home value exceeds the baseline conforming loan limit value, the applicable loan limit will be higher than the baseline loan limit. The Housing and Economic Recovery Act (HERA) establishes the high-cost area limit in those areas as a multiple of the area median home value, while setting the ceiling at 150 percent of the baseline limit. Median home values generally increased in high-cost areas in 2024, which increased their CLL values. The new ceiling loan limit for one-unit properties will be $1,209,750, which is 150 percent of $806,500.

Special statutory provisions establish different loan limits for Alaska, Hawaii, Guam, and the U.S. Virgin Islands. In these areas, the baseline loan limits will be $1,209,750 for one-unit properties.

Due to rising home values, the CLL values will be higher in all but six U.S. counties or county equivalents.

• List and map of the 2025 CLLs for all counties and county-equivalent areas in the U.S.
• List of FAQs covering broader topics related to CLL values

The OCC has released its schedule of Community Reinvestment Act (CRA) evaluations to be conducted in the first and second quarters of 2025. The list is in a PDF format, sorted by state.