Dodd-Frank 1071 – Initial Reactions to the CFPB’s NPRM Webinar [VIDEO]

Brian Epling assists financial services clients, including small-dollar lenders, auto finance companies, and mortgage servicers, with navigating regulatory compliance and litigation issues.On the regulatory compliance side, Brian has assisted financial services clients with policies and procedures to comply with state and federal law and investor requirements.

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Biden taps privacy advocate for U.S. FTC

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WASHINGTON — President Joe Biden will nominate Alvaro Bedoya, a privacy advocate and Georgetown University law professor, to serve on the U.S. Federal Trade Commission, the White House said on Monday.
“It is the honor of my life to be nominated to serve on the FTC. When my family landed at JFK in 1987 with 4 suitcases and a grad student stipend, this was not what we expected,” tweeted Bedoya on Monday afternoon. “Vamos,” he added, which is Spanish for “let’s go.”

Bedoya, the founding director of Georgetown Law’s Center on Privacy & Technology, is also a former chief counsel of the U.S. Senate Judiciary subcommittee on privacy, technology and the law. The FTC post requires Senate confirmation.

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In its statement, the White House praised Bedoya for work exposing the harms of facial recognition technology, leading to restrictions on its use and audits to ferret out biases in the systems.
Bedoya in a lecture at the University of New Mexico in 2019 called privacy “a civil right.”
“At its heart, privacy is about human dignity: Whether the government feels it can invade your dignity, and whether the government feels it has to protect the most sensitive, most intimate facts of your life,” Bedoya said.
Bedoya has been skeptical of widespread, untargeted use of facial recognition technology, calling it in a 2017 newspaper opinion piece something that creates “profound questions about the future of our society.” In the piece, Bedoya also notes that the software often makes mistakes, particularly when searching for the faces of African Americans, women and young people.
Bedoya, if confirmed, would step into a post currently held by Rohit Chopra, who has been nominated by Biden to head the Consumer Financial Protection Bureau (CFPB)- a political lightning rod since it was created following the 2009 financial crisis.
Bedoya was born in Peru but is a naturalized U.S. citizen.
The five-member FTC currently has three Democrats, including Chairwoman Lina Khan, and two Republicans. If Chopra were to be confirmed to the CFPB and step down, the FTC would have two members from each party.
The agency enforces antitrust law and pursues allegations of deceptive advertising.
FTC Commissioner Noah Phillips, a Republican, said on Twitter that Bedoya “would bring a bright and thoughtful voice and a depth of experience working across the aisle on privacy to the FTC.

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Servicer call volume up as borrowers exit forbearance – HousingWire

After a slight lull, forbearance numbers across the board have started to lurch downwards, with the total number of loans dropping by 15 basis points to 3.08% as of Sept. 5, according to the Mortgage Bankers Association‘s latest survey.
The portfolio loans and private-label securities (PLS) category, which has remained stubbornly high, saw the most notable decline last week, dipping by 25 bps to 7.27%, the report said.
Meanwhile, in the race for who can get to the bottom first, Ginnie Mae loans fell by 24 bps to 3.39%, while Fannie Mae and Freddie Mac loans declined by 11 bps to 1.52%.
Mike Fratantoni, senior vice president and chief economist at the MBA, said in a statement that last week saw forbearance exits rev up to their fastest pace since March.
“The fast pace of exits outweighed the slight increase in new forbearance requests and re-entries,” said Fratantoni.

How can servicers best help borrowers as they exit forbearance?
Servicers should be communicating with borrowers early, ensuring to do so in a compliant manner by staying abreast of the current and proposed regulations, CFPB or otherwise. Alert them that they do have the option to sell their house now while in forbearance if they wish as a forbearance exit option.
Presented by: Altisource

New forbearance requests increased from 0.04% to 0.05%, and reentries represented 8.2% of total loans, unchanged from the week prior, the MBA said.
Fratantoni also noted that further declines are expected in the near- term.
“Servicer call volume jumped last week as summer came to an end and many borrowers reached the end of their forbearance terms,” he said. “We anticipate a similarly fast pace of exits in the weeks ahead.”
MBA’s data revealed that servicer call volume increased to 7.7%, up from 5.8% the week prior and that the average call length was also slightly prolonged from 8.1 minutes to 8.2 minutes.
The trade group estimates that 1.5 million borrowers remain in forbearance.
Mortgage servicers need to worry about the Consumer Financial Protection Bureau (CFPB) which recently published a report that found a market increase in the share of borrowers exiting forbearance and becoming delinquent without a loss mitigation plan in place.
The report, which drew on data from 16 mortgage servicers from December 2020 to April 2021, also showed that some servicers are keeping up with the high call volume, while others are struggling to do so, causing higher wait times for some borrowers.
In a statement, the CFPB’s acting director, Dave Uejio, reiterated the agency’s chilly stance toward servicers.
“Many emergency mortgage protections are winding down, and servicers have had ample time to prepare for the millions of distressed homeowners who need their assistance,” said Uejio.

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Biden to Nominate Privacy Advocate Alvaro Bedoya for FTC Seat

President Joe Biden is set to nominate Alvaro Bedoya, a privacy advocate and professor at the Georgetown University Law Center, for a seat on the Federal Trade Commission, Politico reports.
Two unnamed sources familiar with the White House’s planning confirmed the decision to Politico, though it has yet to be officially confirmed. If nominated and confirmed by the Senate, Bedoya, a specialist in privacy law and the founder of Georgetown’s Center on Privacy & Technology, would replace outgoing Democrat Commissioner Rohit Chopra, who has been selected to lead the Consumer Financial Protection Bureau. 
Bedoya previously worked as chief counsel to the Senate Judiciary Subcommittee on Privacy, Technology, and the Law, where he worked to coordinate oversight hearings regarding the tracking of mobile location data and biometric information.
FTC Commissioner Noah Phillips, who was nominated by former President Donald Trump, told The Washington Post that he didn’t always agree with Bedoya but described him as “without fail as bright and thoughtful a person as you could find.”
Phillips added, “I don’t think of him as a person who just gets up and rants about entities he doesn’t like,” noting that Bedoya “thinks about the impacts of practices that concern him, engages with people who have views about those practices, and helps maps out a way forward.”
Jeffrey Zubricki, a veteran Senate staffer who previously worked with Bedoya and is now overseeing government relations with the marketplace website Etsy, said that Bedoya has “never seen privacy as a left or right issue, but as a core civil protection and civil rights concern in a way that can pull together both sides. There’s a whole generation of staffers he’s influenced that are still up there today.

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Michigan foreclosures rise, but no reason for alarm, experts say

Foreclosures in Detroit and across Michigan have increased at a higher rate than in much of the rest of the country, according to new data from RealtyTrac. But the numbers remain low, the company’s executive vice president said, and are not a cause for concern.
Rick Sharga, RealtyTrac’s executive vice president, said the increase is a sign that Michigan’s judicial foreclosure system is playing catch-up after a number of months where there were very few filings.
In August, there were 78 foreclosures in Detroit, making the city third behind only Chicago and New York in areas with a metropolitan population of more than a million people. The number of foreclosures in Michigan increased by 62 percent in August from July, only behind New York when it comes to states that had at least 100 foreclosures, according to RealtyTrac.
“The numbers themselves aren’t really scary, no matter how you look at it,” Sharga said. “It’s very, very likely we will continue to see foreclosure activity increase between now and the end of the year.”
Wayne County’s 97 August foreclosures represent a 234 percent increase over August 2020, while Macomb’s 90 are a 275 percent increase. In Oakland County, the 57 August foreclosures are 280 percent higher than August 2020.
Last August, Sharga said, there were 108 total foreclosures processed in Michigan. This year, the number has nearly quadrupled, to 425. But in 2019, there were 1,345 foreclosures in August.
“It’s nothing to be alarmed at,” he said of the higher numbers.
Rick Linnell, a real estate attorney in Keego Harbor, said the activity he’s seeing is “not even remotely close” to what he and others experienced in 2008. He echoed Sharga — while the percentages are significant, he said, the numbers themselves remain low.
“I don’t think it’s going to have any particularly chilling effect on the residential marketplace,” Linnell said. “It’s concerning in general for people, but there’s so much optimism in real estate.”
While foreclosures are tragic on an individual basis, Linnell said, an increase is beneficial to the rental market — and to the investors who often buy foreclosed homes.
“The sharks, the lions, they’re lining up, hoping there will be sales,” he said. “A lot of investors are fighting for not so many deals.”
Numbers are still low, Sharga said, because of foreclosure protections through the Consumer Financial Protection Bureau are just beginning to end. The rules required mortgage servicers to work with homeowners to try to modify loans or otherwise prevent avoidable foreclosures.
Most of the newest crop, he said, are those where borrowers are unresponsive, property has already been abandoned or all modification options were exhausted.
Different states, he said, are catching up at different speeds. But nonresponsive borrowers can perhaps stave off foreclosure by communicating with lenders about their situation.
“It’s apparent the foreclosure mechanisms are restarting,” Sharga said. “The clock has started ticking again.

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Mortgage giant Fannie Mae considers paying rent on time with mortgage approval – Texas News Today

Millions of lessors with little or no credit records have long been locked out of the American dream of owning a home. For some, it’s about to change for the better.
Starting September 18, mortgage giant Fannie Mae will review the latest 12-month rent payment history when lenders run an automated credit check system. Ambitious homeowners must grant Fanny permission to look up rent payment records from checking accounts or electronic services such as PayPal and Venmo.
Under the current system, landlords do not report rent payments to the three major credit rating agencies and are not included in traditional consumer credit score calculations. However, mortgage payments are included. Proponents have long fought to change that gap. It’s a great record of responsibly paying rent on time and can effectively lock out first-time buyers.

“For many households, rent is the single largest monthly cost. There is absolutely no reason why timely payments of monthly housing costs should not be included. [mortgage] Underwriting calculation “. Sandra L. Thompson, Deputy Director of the Federal Housing Finance Agency, Fanny’s regulator, said in a statement last month.
Fannie Mae estimates that about 17% of applicants over the last three years are eligible for a mortgage, given their rent history. It may not seem like much, but it includes the hordes of Americans most hurt by discriminatory housing policies dating back more than a century.

Investors with deep pockets drive homes …
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“Powerful additional tools”
“This is a very powerful addition to helping people left behind in this part of the market,” Cecilia Isaac, chief lender at One United Bank, the largest black-owned bank in the United States, told CBS Money Watch.
Fannie Mae CEO Hugh Freighter said in a recent blog post that he intentionally aims to narrow the racial wealth gap. According to the census at the end of June, about 45% of black Americans owned a home in the second quarter, compared to 74% of white Americans. that is, The booming single-family home market..
Still, according to a recent Urban Institute study, a record of rent payments on time could be a good credit indicator of someone paying a mortgage on time. Junchu, a co-author of the Urban Institute’s research and a clinical assistant professor at the University of Indiana at Bloomington, said that those who pay their monthly mortgages within a one-year deadline have traditionally low credit scores. Including, it states that there is a possibility of default of about 2.8%. ..
“Currently using the new Fannie Mae system, [potential borrowers] I have a second chance. And it shows that the probability of default is actually very low. So this is really good to take into account rent payments. “
Another important feature: Consumers do not lose their chances of buying a home if they miss or delay payment. Fannie Mae will only use the information if it increases creditworthiness and the likelihood of personal approval, as announced in August. Future homeowners can reapply if their credit score improves and they don’t have to worry about the bad things tied to previous rent checks.
“If you go through this process and the results of your rental history look are not positive, you won’t lose your ability to qualify on a regular basis. They won’t use it for you, and that’s what consumers know. Is important, “said Isaac of One United.
Close the wealth gap
In total, about 45 million Americans have little or limited credit history. It makes it difficult to apply for a mortgage, I found a 2015 report from the Consumer Financial Protection Bureau. Black and Hispanic applicants are likely to have little or no history, contributing to the country’s large wealth gap.
“Home ownership builds wealth in the sense that it has assets that are valued over time. It is used as a basis for retaining, transferring to relatives, and moving up. “Issac said,” Equity building in the house makes it possible to close a significant amount of wealth gaps. “
For Jenn Gummel, a real estate agent in Dover, Delaware, the change in rental income will not be immediate. Most first-time buyers she meets ask if she can include rental history, but are surprised to find that she can’t, she told CBS MoneyWatch.
“Almost all first-time buyers told me,’I really want the underwriting to take into account my rent payment history.’ Well, that’s what they actually say. No, but that’s what they’re trying to say. “
Gummel recalls a recent client in New York City who was denied a mortgage application.

Black realtor handcuffed at home v ..
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“They were paying an insane amount of rent and their rent in New York. [in Delaware] I fell a lot. If they could use their rent payment history, they would probably have been able to get a mortgage, “Gammel said.
Fanny itself does not lend directly to the borrower. Rather, buy a mortgage from a lender, including a bank. Fannie Mae and her cousin Freddie Mac, known as the Government-Sponsored Agency, were part of a program created to help promote home ownership and build wealth in the decades following the Great Depression. Mortgages held by GSE are guaranteed by the federal government and also help protect lenders from financial collapse.
GSE owns more than 60% of all US mortgages. Therefore, if Fannie Mae says the loan is not a good risk, the bank will usually refuse the application because the resulting mortgage cannot be sold to Fannie.
Experian, TransUnion, Equifax
These mortgage valuations are tied to credit scores like those used by three major credit agencies: Experian, TransUnion and Equifax. Mortgage underwriters use FICO scores edited by Fair Isaac Corporation. According to experts, the lowest score for a traditional 30-year mortgage at a bank is usually 620. However, people with a score of less than 700 tend to be scrutinized.
Urban Institute Jun and Gammel said rent checks are optional, so consumers may want to postpone if the score exceeds about 700. Without it, it is likely to be approved.
“Obviously, if they have a credit score of 760 or 700, I don’t think they really need it [the check]Gammel told CBS Money Watch. “It’s really people who are right under or above the bar, just to give them a little boost.

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Biden to nominate privacy advocate Alvaro Bedoya to FTC: reports

President Joe Biden will nominate Alvaro Bedoya, a Georgetown University law professor and privacy advocate, to serve on the Federal Trade Commission, according to news reports.
Bedoya is the founding director of Georgetown’s Center on Privacy and Technology and previously served as chief counsel on the Senate Judiciary privacy subcommittee, then chaired by former Democratic Sen. Al Franken of Minnesota. He is seen as an expert on privacy issues related to the technology industry.

Bedoya will replace current Commissioner Rohit Chopra, whom Biden nominated to lead the Consumer Financial Protection Bureau.

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Biden reportedly to tap Georgetown professor for top FTC job

President Joe Biden is set to nominate Alvaro Bedoya, a Georgetown University law professor and privacy advocate, to serve on the US Federal Trade Commission, three sources briefed on the matter said on Monday.
Alvaro Bedoya
Alvaro Bedoya, the founding director of Georgetown Law’s Center on Privacy & Technology, is also a former chief counsel of the US Senate Judiciary subcommittee on privacy, technology and the law. The FTC post requires Senate confirmation.
A White House announcement is expected later on Monday. Axios reported the planned nomination earlier.
Bedoya, if confirmed, would step into a post currently held by Rohit Chopra, who has been nominated by Biden to head the Consumer Financial Protection Bureau — a political lightning rod since it was created following the 2009 financial crisis.
The five-member FTC currently has three Democrats, including Chairwoman Lina Khan, and two Republicans. If Chopra were to be confirmed to the CFPB and step down, the FTC would have two members from each party.

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Biden to tap Georgetown law professor for U.S. FTC, sources say

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By Diane Bartz and David Shepardson
WASHINGTON (Reuters) -President Joe Biden is set to nominate Alvaro Bedoya, a Georgetown University law professor and privacy advocate, to serve on the U.S. Federal Trade Commission, three sources briefed on the matter said on Monday.
Bedoya, the founding director of Georgetown Law’s Center on Privacy & Technology, is also a former chief counsel of the U.S. Senate Judiciary subcommittee on privacy, technology and the law. The FTC post requires Senate confirmation.
A White House announcement is expected later on Monday. Axios reported the planned nomination earlier.
Bedoya in a lecture at the University of New Mexico in 2019 called privacy “a civil right.”
“At its heart, privacy is about human dignity: Whether the government feels it can invade your dignity, and whether the government feels it has to protect the most sensitive, most intimate facts of your life,” Bedoya said.
Bedoya has been skeptical of widespread, untargeted use of facial recognition technology, calling it in a 2017 newspaper opinion piece something that creates “profound questions about the future of our society.” In the piece, Bedoya also notes that the software often makes mistakes, particularly when searching for the faces of African Americans, women and young people.
Bedoya, if confirmed, would step into a post currently held by Rohit Chopra, who has been nominated by Biden to head the Consumer Financial Protection Bureau – a political lightning rod since it was created following the 2009 financial crisis.
The five-member FTC currently has three Democrats, including Chairwoman Lina Khan, and two Republicans. If Chopra were to be confirmed to the CFPB and step down, the FTC would have two members from each party.
The agency enforces antitrust law and pursues allegations of deceptive advertising.
FTC Commissioner Noah Phillips, a Republican, said on Twitter that Bedoya “would bring a bright and thoughtful voice and a depth of experience working across the aisle on privacy to the FTC.

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Biden to Nominate Georgetown Privacy Law Professor Bedoya to FTC

President Joe Biden plans to nominate Georgetown University law professor Alvaro Bedoya to be a commissioner on the Federal Trade Commission, according to a person familiar with the matter.
Bedoya, a privacy law expert who leads the Center on Privacy & Technology at Georgetown’s law school, would replace FTC Commissioner Rohit Chopra, who has been nominated to run the Consumer Financial Protection Bureau.

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Biden to Nominate Georgetown Privacy Professor Bedoya to FTC

Sep 13 2021, 9:15 PMSep 13 2021, 11:03 PMSeptember 13 2021, 9:15 PMSeptember 13 2021, 11:03 PM(Bloomberg) — President Joe Biden plans to nominate Georgetown University law professor Alvaro Bedoya to be a Democratic commissioner on the Federal Trade Commission, according to a person familiar with the matter.

(Bloomberg) — President Joe Biden plans to nominate Georgetown University law professor Alvaro Bedoya to be a Democratic commissioner on the Federal Trade Commission, according to a person familiar with the matter.

Bedoya, a privacy law expert who leads the Center on Privacy & Technology at Georgetown’s law school, would replace FTC Commissioner Rohit Chopra, who has been nominated to run the Consumer Financial Protection Bureau. 

Bedoya would bolster the commission’s expertise in privacy and data security, which is increasingly becoming one of its high-profile responsibilities in addition to antitrust enforcement. The agency in 2019 fined Facebook Inc. a record $5 billion for privacy violations in a settlement that the FTC’s two Democratic commissioners at the time said didn’t go far enough to protect consumers.

Privacy advocates cheered the news of Bedoya’s nomination. Tech policy organization Public Knowledge called him a “fierce advocate for consumer privacy” and applauded his work showing that surveillance and facial-recognition technology can have disparate impacts on people of color. Alvaro was one of the authors of a 2016 report on the use of facial-recognition technology by police departments and the risks posed to privacy and civil liberties.

“He’s blazed a trail in holding big tech accountable and has spent his career fighting on behalf of the powerless, particularly those in immigrant communities,” Charlotte Slaiman, Public Knowledge’s competition policy director, said in a statement.

Before joining Georgetown, Alvaro was the chief counsel for the Senate Judiciary Committee’s privacy subcommittee, where he worked on matters involving mobile location privacy and biometrics and helped draft legislation, according to a biography on the school’s website.

Chopra is still awaiting Senate confirmation after his nomination moved out of the Senate Banking Committee in March on a split, party-line vote. 

Axios previously reported on Biden’s intent to nominate Bedoya.

©2021 Bloomberg L.P.

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Biden to nominate critic of surveillance software to FTC, further bolstering agency as check on Big Tech

His confirmation would further bolster expectations about the agency’s scrutiny of an industry led by trillion-dollar companies with unprecedented influence over how people live, work and speak.

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Biden’s announcement is expected Monday afternoon. Bedoya and the White House declined to comment.

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Born in Peru, Bedoya has worked to reframe the debate around emerging surveillance technology from its technical abilities to its most devastating impacts, particularly on immigrants and people of color.

As a staffer for former senator Al Franken (D-Minn.), Bedoya became the first chief counsel of the U.S. Senate Judiciary subcommittee on privacy, technology and the law, which since 2011 has held hearings on location tracking and the opacity of National Security Agency surveillance.

He has been praised on Capitol Hill for his bipartisan approach to privacy as a human right, and his nomination to Silicon Valley’s top watchdog could presage a more aggressive approach to the private sector, particularly in issues of data protection.

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Noah Phillips, who worked with Bedoya in the Senate and was nominated by Trump as an FTC commissioner in 2018, said he has not always agreed with Bedoya but found him to be “without fail as bright and thoughtful a person as you could find.”

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“I don’t think of him as a person who just gets up and rants about entities he doesn’t like,” Phillips said. He “thinks about the impacts of practices that concern him, engages with people who have views about those practices, and helps maps out a way forward.”

Bedoya’s nomination comes as Biden’s FTC chair, Lina Khan, has faced calls from both Democrats and Republicans to forcefully police the tech giants’ most dominant players, including Amazon and Facebook.

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Biden has also elevated people who have scrutinized tech’s impact on civil rights in other agencies. Vanita Gupta, a civil rights leader who criticized Facebook, earlier this year became associate attorney general at the Department of Justice.

Bedoya’s work could also help the agency further expand its ambitions in safeguarding Americans’ privacy online. House Democrats last week proposed a $1 billion boost of the FTC’s budget to help launch a division to patrol for privacy violations and online abuse.

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It is unclear when Bedoya’s confirmation hearings will be scheduled, though it will likely take months. He would replace FTC commissioner Rohit Chopra, who Biden nominated to lead the Consumer Financial Protection Bureau but is still awaiting confirmation.

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In the Senate, Bedoya was a key driver of privacy and surveillance as public-interest issues, helping draft legislation and conduct oversight hearings into tech-company practices. He was known for organizing informal Thursday night “pizza and privacy” gatherings, attracting House and Senate staffers from across the aisle.

“He’s never seen privacy as a left or right issue, but as a core civil protection and civil rights concern in a way that can pull together both sides,” said Jeff Zubricki, a longtime Senate staffer who worked with Bedoya and now leads government relations for the online marketplace Etsy. “There’s a whole generation of staffers he’s influenced that are still up there today.”

Later, as a director of Georgetown’s privacy center, Bedoya pushed authoritative studies that would become a centerpiece of Congressional interest and help fuel political movements across the country.

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Since 2016, when Bedoya and the researchers Clare Garvie and Jonathan Frankle wrote how unregulated police use of facial recognition had forced Americans into a “perpetual lineup,” more than a dozen states and cities have passed laws banning or restricting its public use.

In recent months, he has been a vocal critic of the digital systems used by Immigration and Customs Enforcement agents to find and track immigrants in the United States, writing columns criticizing the “technology behind ICE’s brutality.”

Consumer and civil rights advocates also celebrated the Bedoya pick. Wade Henderson, the interim president and chief executive of the Leadership Conference on Civil and Human Rights, the country’s biggest civil rights umbrella group, said in a statement that he urged the Senate to quickly confirm his nomination.

“An influential scholar focused on the principle that privacy is a civil right, Professor Bedoya is exactly the leader our country needs right now,” Henderson said.

Cat Zakrzewski and Cristiano Lima contributed to this report.

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Wells Fargo trials, $250M penalty are all part of a door-window continuum

If the adage about closed doors and opened windows ever applied to a bank — even on outlook alone — that bank might be Wells Fargo.
As the San Francisco-based lender announced Thursday that the Office of the Comptroller of the Currency (OCC) had handed down a fresh penalty — $250 million for failing to develop a program for mortgage borrowers to avoid losing their homes — Wells Fargo also took a moment to acknowledge that another regulator, the Consumer Financial Protection Bureau (CFPB), had let a separate consent order against the bank expire.

“Sometimes — as is the case today — we will reach a positive milestone on one set of issues and be reminded that we need to redouble our focus on another,” CEO Charlie Scharf said in a statement. “That will not stop us from getting to where everyone expects us to be, and where we expect ourselves to be.”
The OCC’s consent order is the first to be opened against the bank during the Scharf era, Bloomberg reported. Wells Fargo faced 12 enforcement actions when he took the helm in October 2019, and the bank had winnowed that to 10 by the start of 2021.
In his first earnings call as Wells’ CEO, Scharf said his primary focus had been “advancing our required regulatory work with a different sense of urgency and resolve.” Wells’ actions, at least in home lending, weren’t urgent enough for the OCC, it could be speculated. Last week’s penalty dings the bank for failing to make progress on a 2018 consent order — specifically, for failing to “detect, prevent and quantify inaccurate loan modification decisions” — in a timely manner.
Along with the penalty, the OCC last week barred Wells Fargo from acquiring certain third-party residential mortgage servicing and ordered the bank to ensure harmed borrowers aren’t transferred out of its loan-servicing portfolio until they’re given remediation.
“Wells Fargo has not met the requirements of the OCC’s 2018 action against the bank,” Acting Comptroller Michael Hsu said in a Thursday press release. “This is unacceptable.”
The April 2018 consent order came with a $1 billion penalty for, among other practices, improperly charging customers fees for mortgage interest rate locks even if Wells Fargo’s actions had resulted in the loan failing to close in the specified time frame, American Banker reported.
Wells Fargo disclosed three months later that it had found a calculation error that caused 625 customers to be incorrectly denied loan modifications, including about 400 who lost their homes. At the time, the bank said the issue was corrected in October 2015. A subsequent securities filing revised that assessment, indicating that more customers were affected and the errors continued through April 2018.
Last week’s OCC actions weren’t entirely unexpected. Bloomberg reported earlier that Wells could face new sanctions over the pace at which it was complying with some consent orders.

“Our work to build the right foundation for a company of our size and complexity will not follow a straight line,” Scharf said. “We are managing multiple issues concurrently, and progress will come alongside setbacks. That said, we believe we’re making significant progress, the work required is clear, and I remain confident in our ability to complete it.”
The order the CFPB allowed to expire last week stemmed from Wells Fargo’s 2016 fake-accounts scandal, which appears to have its own door-window continuum. The long-running scandal will get a spotlight in court this week, as trials for three former Wells Fargo executives — former Chief Auditor David Julian, former Executive Audit Director Paul McLinko and former community bank group risk officer Claudia Russ Anderson — are slated to begin Monday.
The OCC is seeking penalties of $10 million from Russ Anderson, $7 million from Julian and $1.5 million from McLinko, American Banker reported this month. The agency alleges the three executives failed to perform their duties and responsibilities adequately, contributing to systemic issues at the bank.
OCC examiners charged the former executives in January 2020, when it also announced a settlement with ex-Wells Fargo CEO John Stumpf, who paid a $17.5 million penalty and is barred from the banking industry. Stumpf and fellow former Wells CEO Tim Sloan are among a list of potential witnesses for Monday’s trial.
Lawyers for the defendants are trying to focus attention on flaws in the OCC’s supervision. The OCC missed several opportunities to reel in the bank’s sales-related misconduct, according to a government watchdog report published last September.
“According to OCC examiners, historically, Wells Fargo had a solid reputation,” the report said.
Scharf, in Thursday’s press release, continued his conciliatory tone regarding penalties radiating from the 2016 scandal. 
“We have done substantial work designed to ensure that the conduct at the core of the consent order — which was reprehensible and wholly inconsistent with the values on which this company was built — will not recur,” he said.

Incidentally, the bank last week named a new executive, Ann Thorn, to lead its home lending servicing group. The move, Wells Fargo said, is unrelated to last week’s mortgage-related penalty. Thorn is replacing Jeff Smith, who announced his retirement in January.

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Brand New Rules To Ban Payday Lending ‘Debt Traps’ – Adotas

inplace-infolinks

Inplace #2

The buyer Financial Protection Bureau on Thursday is proposing new laws to protect consumers from predatory financing techniques that the CFPB’s top regulator call
Americans are being “create to fail” by payday and auto-title loan providers, Richard Cordray, the manager of this customer Financial Protection Bureau, informs NPR.

“just how the products are structured, it is rather hard to repay the mortgage, and for that reason people become borrowing over repeatedly and having to pay much more in charges and interest than they borrowed when you look at the beginning,” Cordray claims.
Beneath the proposed guideline, so-called “payday,” “auto-title” as well as other short-term loan providers could be needed to figure out that individuals they loan cash to could make the re re re payments and charges if they come due whilst still being meet basic cost of living and major obligations.
With rates of interest of 300 % and greater, these loan providers have actually dropped under greater scrutiny at both their state and federal degree. In March of a year ago, President Obama stated he supported tougher laws for payday loan providers who revenue by charging you borrowers interest that is super-high. “If you are making that gain trapping hard-working People in america into a vicious period of financial obligation, you have got to locate a business that is new,” the president stated.
Pay Day Loans: A assisting Hand Or Predatory Quicksand?
Suppose a low-wage worker’s car stops working. She’s got to make it to work and simply simply just take her young ones to college. But she’s got bad credit, no bank cards with no solution to pay money for the automobile fix. a lender that is payday in place say, “no issue. We’ll supply you with the cash you’ll need at this time getting your vehicle fixed, and I am given by you your money quantity, when you obtain compensated in 2 days We’ll withdraw the income your debt me personally from your own bank account.”

The industry claims these loans are essential to assist working People in america through a money squeeze and that the brand new laws are unwarranted. “The CFPB’s proposed guideline presents an astounding blow to customers since it will take off use of credit for an incredible number of People in america whom utilize small-dollar loans to handle a budget shortfall or unanticipated cost,” claims Dennis Shaul, CEO for the payday financing industry team, the Community Financial Services Association.
But regulators state the nagging issue is that the terms are incredibly onerous that numerous borrowers can not manage to spend the loans as well as continue to have sufficient for his or her rent as well as other basics. And they also wind up taking out fully another loan, after which another loan from then on, over repeatedly for months or often years, sinking much much deeper into a quagmire.
Cordray claims customers think these are titlemax loan typically engaging in an one-time loan but they have “caught” by this period. He states it really is like “getting in a taxi merely to drive across town and also you end up in cross-country journey that may be ruinously high priced.”
The CFPB learned the lending that is payday before crafting the proposed guideline and found that four away from five among these single-payment loans are re-borrowed within 30 days. Within the instance of auto-title loans where borrowers place their cars up as collateral, one out of five borrowers eventually ends up having trucks and cars seized by the lending company for failure to settle.
Customer Groups Applaud The Rule But Cautious With Loopholes
Watchdog groups for many years have already been critical of payday lenders. “The concept through the final twenty years because this industry began is the fact that this has been remarkably good at evading attempts at legislation and making use of an extremely high-powered lobbying device to push for loopholes,” states Mike Calhoun, the president of this Center for Responsible Lending.
Calhoun states he supports the proposed rule through the CFPB, but he is nevertheless worried the industry will see a real method to your workplace around it.
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Fair Isaac : Understanding Overdraft Programs (Part 1) | MarketScreener

We all experience unexpected expenses such as medical bills, needing a new roof, and car repairs. Sometimes unexpected expenses hit all at once, or we haven’t put away enough in our rainy-day fund. This is where Overdraft (OD) programs come into play. Courtesy overdraft is a service offered with a deposit account to provide liquidity to a bank customer when their balance has insufficient funds to cover incoming payments from a debit card, ATM, check or an ACH (Automated Clearing House) payment. In the United States, a customer must opt-in to this service for debit and ATM card transactions (required by the 2010 update to Regulation E) and a flat fee is applied per the terms and conditions of the program offered by the bank.With the change in the regulatory climate, overdraft programs have been drawing scrutiny, but the need remains for consumers. The concept of providing customers with an extension of funds is not going away, and the overdraft programs continue to evolve.The use of overdraft services has been extensively researched by organizations such as the Pew Charitable Trusts, and the Consumer Financial Protection Bureau (CFPB). Researchers often cite the negative financial impact of fee-based overdraft on the most financially fragile consumers. Over the past few years, the fees generated, and usage of overdraft has been an ongoing debate, with concerns raised by both policy leaders in Congress as well as consumer advocacy organizations. Recently, a growing number of banking institutions have introduced changes to their overdraft programs including no longer charging fees to alternative ways to assist customers with their short-term cashflow needs.In this first of two blog posts, I had an opportunity to chat with David Pommerehn, the General Counsel and Senior Vice President at the Consumer Bankers Association (CBA), an expert on the state of overdraft in the banking industry. Our discussion explored the shifting regulatory landscape, banks’ latest overdraft program changes, and what’s next with regulations on overdraft. My second blog post will focus on solutions for banks to better serve their customers who need short-term liquidity.Let’s begin with our discussion with CBA’s David Pommerehn.FICO: Could you briefly explain the existing state of overdraft regulations (opt-in treatment of debit card/ATM vs. check/ACH)?Mr. Pommerehn: Overdraft regulations have remained relatively unchanged since the opt-in provisions (Reg E) were implemented in 2010. New leadership at the CFPB has indicated that OD is on the agenda for a possible rulemaking. What that will look like, we do not know, but we do know the CFPB has been collecting data on OD practices for years and many of their concerns center around ‘chronic users’ (those who overdraft 10 or more times a year) and the process of opt in as it pertains to consumer disclosure and transparency. In 2014, the Bureau moved to recategorize overdraft on prepaid cards as a ‘credit feature’ under regulation Z. However, we do not believe that is the direction for deposit account overdraft.There are numerous enforcement actions under way as well as litigation related to overdraft. All this is in addition to a legislative proposal by Rep. Carolyn Maloney (D-NY) that would severely curtail overdraft practices.FICO: Is there consensus within the industry that the existing regulations are sufficient?Mr. Pommerehn: Yes, we believe that regulation E opt-in has been sufficient in giving consumers the choice to use overdraft or not. Average opt-in rates hover around 20% and we believe consumers need to make their own informed choices. Additionally, there are few viable options currently in the market that provide consumers with a financial cushion for emergencies. Overdraft becomes a valuable service for those who find themselves in need of emergency funds.FICO: There is a lot of focus on the cost of overdraft coverage. Overdraft protection provides a benefit to the bank customers and the merchants they are paying but does comes with a risk that a customer cannot address their balance shortfall. In your opinion, is there an appreciation of the risks for banks in extending payment when insufficient funds exist?Mr. Pommerehn: Of course. Debt cycles and charge offed accounts are always a concern. Banks have implemented many ways for consumers to avoid overdraft, including de minimis exemptions, grace periods, low balance and OD alerts, and accounts that do not maintain the ability to overdraft at all. For those that cannot sufficiently address a shortfall, there should be a discussion with their account provider and an examination of possible alternatives.FICO: Recently, a number of banks (led by Ally, PNC, TD and others) are reworking their overdraft strategies. What is driving this wave of changes? Do you expect other banks to implement similar changes even if this results in lower generated revenue?Mr. Pommerehn: The market is responding to consumer needs. We believe depositories will continue to innovate in this space, giving consumers more flexibility while retaining options for those that decide to utilize them.FICO: Looking into your crystal ball, what, if any, policy changes do you expect regarding overdraft in the next year?Mr. Pommerehn: It’s hard to say. Again, many changes from the account providers themselves, will certainly happen, which may mitigate much of the desire to regulate/legislate in this space. We expect the CFPB to continue its review of the service and a proposal could be made as early as the first half of 2022. What that may look like is unknown, but possible ‘solutions’ could be wide ranging.Since our conversation, more and more banks have made statements on possible new services or changes to fees within the overdraft service category. In August of 2021 Jamie Dimon stated ‘A lot of competitors are making changes and we may be a day late and a dollar slow, but if it’s appropriate, we’re going to make a bunch of changes.’ Fintech offerings such as Chime’s ‘SpotMe’ have illustrated a few possibilities to provide a short-term, small dollar liquidity service for consumers.The push for new short-term liquidity solutions is definitely in full gear and I look forward to sharing my insights and suggestions on this important topic in my next post.AttachmentsOriginal documentPermalinkDisclaimerFair Isaac Corporation published this content on 13 September 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 September 2021 14:41:07 UTC.

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