Mortgage regulation deadlines, a discrimination lawsuit, and more in this issue of Consumer Financial Services Practice Digest

3 min

lending laws

A Quick Look at Mortgage Regulation Deadlines

The compliance efforts of the mortgage industry are ongoing. The CFPB has finalized, or is in the process of finalizing, updates to mortgage-related regulations, including the TILA-RESPA Integrated Disclosure Rule and Regulation C, which implements the requirements of the Home Mortgage Disclosure Act. Accordingly, industry is continuing its efforts in complying with the updated rules.

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Lawsuit Claiming Discrimination by Lender on Basis of Immigration Status Survives Dismissal

The Northern District of California's recent decision in Perez v. Wells Fargo Bank, N.A. has potentially created a new "fair contracting" concern for banks and other financial institutions that consider applicants' citizenship or immigration status when deciding whether to extend credit or open an account.

On August 3, 2017, the Northern District of California denied a motion to dismiss claims that Wells Fargo Bank, N.A. engaged in discrimination on the basis of immigration status by refusing to extend loans and other financial products to individuals who are not U.S. citizens or permanent residents.

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financial data

CFPB's First No-Action Letter Addresses Alternative Data Underwriting

The CFPB has issued its first No-Action Letter, pursuant to a policy issued last year. We previously outlined the No-Action Letter Policy here, but to briefly summarize, under the Policy the CFPB will, in exceptional cases, issue an informal, non-binding letter indicating that it does not currently intend to take action under a specific consumer financial protection law or regulation (except for the prohibition on unfair, deceptive, or abusive acts or practices (UDAAP). Industry participants may submit applications for a No-Action Letter. The CFPB reviews both the applicant and the proposed product or service.

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CFPB Sanctioned for Bad Faith Conduct

A federal district court judge in Atlanta has granted five defendants' motions for terminating sanctions against the Consumer Financial Protection Bureau for the agency's conduct in connection with its Rule 30(b)(6) depositions. Venable attorneys represented one of those defendants, and were the principal authors of the briefs leading to the sanctions.

The court agreed with the defendants' arguments that the claims pleaded against them must be dismissed because of the CFPB's refusal to produce a knowledgeable and non-evasive Rule 30(b)(6) witness. The court described the refusal as a "pattern of conduct" that "demonstrate[d] a willful disregard of the Court's instructions." The court agreed with the defendants that the CFPB's misconduct warranted striking all counts pleaded against them.

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October 12, 2017: The Future of Advertising and Marketing for Consumer and Business Lending at the 2017 LEND360 Conference

October 13, 2017: Violation or No Violation at the NARCA 2017 Fall Conference

November 2, 2017: Remaining Compliant in a Sea of Changing Expectations at the 2017 ACA International Fall Forum and Expo in Chicago, IL


CFPB's Arbitration Rule – The Road Ahead

The CFPB's Arbitration Rule, published earlier this summer, became effective on September 18, 2017. Per its underlying statute, however, the compliance date of the rule is still a few months off – March 19, 2018. Of course, there are still a variety of challenges facing the Arbitration Rule, including the still-extant possibility that Congress will disapprove of the regulation under the Congressional Review Act, and likely legal challenges under the Dodd-Frank Act and the Administrative Procedures Act. Venable attorneys Allyson Baker, John Cooney and Peter Frechette discussed the final rule and the waterfront of possible challenged in a recent webinar.

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