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Inplace #2

Consumers have many options with regards to pay day loans — nearly all which offering lower interest as well as other advantages
Stopping right into a lender that is payday these is straightforward, but you can find best methods of getting crisis funds.
Referenced Symbols
The buyer Financial security Bureau has proposed gutting a guideline that aimed to manage the pay day loan markets.
The agency circulated two proposals for rolling back the regulations on payday, vehicle title and other balloon-payment installment loans that were finalized in 2017 and were set to go into effect in August wednesday. The statement comes over an after the cfpb, which is now run by trump appointee kathy kraninger, first said it would explore rolling back the rule year.

Customers pays dearly for such loans. Payday advances generally reference short-term loans, frequently of $500 or less, which are designed to become paid back in one re payment with a consumer’s next payday. The loans typically come with a high fees — the common percentage that is annual means nearly 400per cent, based on the CFPB.
“ ‘What you’re speaing frankly about try wiping out of the life blood associated with guideline right right here.’ ”
— — Richard Cordray, former manager associated with customer Financial safeguards Bureau
Opponents into the CFPB’s proposal argue that removing requirements that are underwriting decrease the agency’s cap cap ability to safeguard people.
“What you’re speaing frankly about is wiping out of the life blood of this guideline right right right here,” stated Richard Cordray, the previous manager associated with customer Financial security Bureau who oversaw the look and utilization of the current guideline.
The CFPB’s guideline additionally put on more short-term loans, like car name loans. Those loans is organized likewise for the reason that they come with a high interest levels and must certanly be paid back in complete after a quick time frame. The key huge difference with these loans is the fact that they is supported by the name for a motor vehicle, vehicle or bike.
The CFPB try rolling consumer that is back key
The CFPB that is first proposal payday advances circulated earlier in the day this week would rescind the conditions requiring loan providers offering the products to underwrite the loans to be able to confirm borrowers’ ability to settle them. “The bureau was preliminarily discovering that rescinding this requirement would augment customer use of credit,” the agency stated in a press launch.
The second proposal would wait if the rule’s conditions get into impact until November 2020.
In the event that CFPB’s arrange goes in impact, laws regarding just just how lenders that are payday re payments will continue to be set up. The 2017 guideline stipulated that loan providers must definitely provide written notice before trying to withdraw funds from the consumer’s account to settle the mortgage.
Loan providers will also be banned from building a withdrawal effort after two past efforts has unsuccessful because of inadequate funds until they bring consumer consent for future withdrawals.
Town Financial solutions relationship of America, a trade team that represents the payday financing markets, welcomed the CFPB’s proposals, though criticized the agency’s selection to go out of portions regarding the regulation intact that is existing.
“We are disappointed that the CFPB has, so far, elected to keep up specific conditions of the earlier last guideline, that also have problems with the possible lack of supporting proof and had been an element of the same arbitrary and capricious decision-making associated with earlier manager,” the organization’s CEO Dennis Shaul stated in a general public statement. “As such, we think the 2017 final rule must feel repealed with its entirety.” (The CFSAA would not get back a request remark.)
80% of people that make use of payday advances move them over
These loans need drawn criticism in big role because loan providers typically do little to no underwriting before supplying the funds to customers. a customer can usually reveal as much as a payday lender’s storefront and compose a check when it comes to loan levels and interest, and also the loan provider then holds onto this check and can exchange it for money once the loan arrives.
In the event that debtor cannot repay the mortgage over time, but, some customers will prefer to simply take down another cash advance to repay the initial any, rather than get into standard. And thus it becomes a punitive period of considerably high-interest loans piled together with the initial loan.
Certainly, a CFPB research discovered that a lot more than 80% of payday advances had been rolled over or followed closely by another loan within a fortnight. A written report from Pew Charitable Trusts unearthed that 70% of payday borrowers were utilizing their loans for recurring spending such as for example lease.
Pay day loans often result in the issue worse
“If you don’t has that cash nowadays, it is likely to be also difficult to create that funds and also a hefty charge in 2 days,” Martindale said. “People is effortlessly in debt for the entire season as an outcome of taking out fully these loans.”
“ Eighteen states in addition to District of Columbia basically prohibit high-cost payday financing by establishing interest limit. ”
Consequently, the national government additionally the CFPB under Cordray’s leadership had written laws needing the payday lending business to validate borrower’s money and credit before lending in their mind to make certain they are able to repay the loans in a prompt fashion.
“That’s exactly just exactly what being carried out now within the home loan marketplace in addition to credit-card marketplace, also it made feeling to use that to payday advances,” Cordray stated.
The CFPB isn’t the actual only real agency managing the payday financing business. Eighteen states and also the region of Columbia really prohibit high-cost lending that is payday setting rate of interest caps. In certain states, like Connecticut, Massachusetts and western Virginia, payday financing https://paydayloanadvance.net/payday-loans-tn/bolivar/ has not become permitted.
Three states — Maine, Colorado and Oregon — just allow lower-cost lending that is payday. Elsewhere, high-cost payday lending are permitted.
Voters in a few states, like Southern Dakota and Colorado, have actually authorized limitations or outright bans on payday lending during the ballot field. “Where it offers gone to your ballot, people generally supports restrictions on payday advances,” Cordray stated.

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Even more impressively, the Consumer Financial Protection Bureau has given its version of a stamp of approval to Upstart’s models.

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Getting started in investing can feel overwhelming. There are so many companies and strategies to choose from and so many metrics to consider that you could be forgiven for just buying an S&P 500 index fund and moving on with your life. It’s a logical approach, and ensures your returns will essentially match the market.
But if you want to try for better-than-benchmark results, you could focus on companies that are paving the way to the future. It wouldn’t even take you that much money to get started: As little as $1,500 would get you one share each of Upstart (NASDAQ:UPST), The Trade Desk (NASDAQ:TTD), MongoDB (NASDAQ:MDB), Teladoc (NYSE:TDOC), and Axon Enterprises (NASDAQ:AXON). Here’s why those companies would make a great foundation for an investment portfolio focused on growth.

Image source: Getty Images.

1. Upstart
Lending decisions used to be very subjective. Banks often took factors into account that didn’t affect a borrower’s ability to pay back a loan. In many instances, loan officers made decisions that actually excluded worthy people from getting credit. Through the years, those decisions have come to be based more on analytics and algorithms. The resulting processes are much better, but they are far from perfect.
Upstart is taking these analytics models to another level. It uses complex machine learning models crunching 1,600 variables to arrive at lending decisions, and the model is proving itself in the eyes of its banking customers and regulators. The company’s second-quarter revenue was $194 million — up more than 1,000% year over year. Even more impressively, the Consumer Financial Protection Bureau has given its version of a stamp of approval to Upstart’s models. 
The agency found the service was leading to a higher approval rate at lower interest rates for customers. That’s a win-win-win for the company, its customers, and borrowers. Upstart has focused on personal loans, but is now moving into the much larger auto loan and home mortgage markets. The stock is up 600% this year. It could just be getting started.

2. The Trade Desk
The Trade Desk offers a self-service cloud platform for buyers of advertising to manage their digital marketing campaigns. That’s a fancy way of saying its customers can create and manage their advertising in mediums like audio, video, and social media across the web, mobile, and internet-connected TVs, so that they can get the most out of their advertising dollars. Clients use The Trade Desk’s services to figure out when and where to put their messages in front of prospective customers — and then do it. The company’s revenues and profits have been growing like gangbusters.
For the first six months of 2021, revenue climbed 66% year over year to $500 million. Net income was up 43%. With people spending more and more time viewing digital channels, that growth doesn’t look likely to slow anytime soon — and The Trade Desk’s customers know it. Its streak of seven consecutive years of customer retention above 95% speaks to its value proposition.
The stock is up 420% in the past 3 years, but don’t let that scare you. For investors starting a growth portfolio, there may not be a better way to bet on the future of entertainment than The Trade Desk.
3. MongoDB
Another company helping businesses adapt to a new landscape is MongoDB. It offers a cloud-based database supporting NoSQL (not only structured query language). It’s a format that eschews the traditional tables of rows and columns. It can handle the old stuff, but it also allows customers to easily store and retrieve the flood of messy, unstructured data that comes with audio, video, and images — the kind that we are all consuming on our mobile devices these days. Although some tech titans like Amazon have similar offerings, MongoDB is the hands-down favorite among developers.

The company’s Atlas product is its crown jewel. It’s a fully managed service and innovation is helping accelerate its growth. While the overall top line grew 41% in the first six months of 2021, revenue was up 83% for Atlas. The product now accounts for 56% of all revenue. That bodes well for the future, and Wall Street knows it.
MongoDB’s share price is up 84% since mid-May, but that’s no reason to avoid the stock. The company’s sales in the past 12 months were $702 million. Compare that to its estimated market opportunity of $22 billion by 2026 and the potential is obvious.
4. Teladoc
This stock experienced a meteoric rise earlier in the pandemic, climbing almost 160% in the 12-month period that ran through the end of January 2021. However, from its peak early this year, it’s now down by about 51%. That doesn’t reflect the company’s progress toward creating a virtual healthcare system.
Management has made bold acquisitions that put the company at the center of chronic disease management — the largest expense category in the U.S. healthcare system — and pieced together an offering that appeals to insurers and hospital systems alike. Membership growth has slowed this year after a 2020 in which many many organizations were searching for virtual healthcare solutions for their employees. CEO Jason Gorevik expects the pace to pick back up in the years ahead. Still, adding members isn’t the only way this company can grow. 

By adding new services, Teladoc has been able to drive the price paid per member up significantly. In fact, it was 142% higher in the second quarter than it was a year earlier. In a related note, it recently reported that 75% of its deals are now for more than one product.
For the next few years, Teladoc should see significant tailwinds both from the global pandemic and from political efforts to improve the U.S. healthcare system. As it continues to prove the value of its platform, expect healthcare plans offering virtual options to become the norm rather than the exception. That should eventually benefit Teladoc’s shareholders.
5. Axon Enterprise
You might know Axon Enterprises by its former name — Taser International. It still makes non-lethal electric shock weapons, but its future is now tied more to evidence.com — a software platform used by police departments to store and manage the footage captured by Axon’s body and patrol car cameras.
The company is continuing to innovate and expand its offerings. Its recently released dash camera uses artificial intelligence to scan license plates across multiple lanes of traffic. It also upgraded its virtual reality simulator. The program is now wireless and offers modules to help officers learn how to deal with complex situations like domestic violence. It also contains modules to identify and engage with citizens who are hard of hearing, as well as those with schizophrenia, autism, dementia, and other conditions like post-traumatic stress disorder. 
Axon also continues to expand globally. In 2020, 16% of its revenue came from outside the U.S. In the most recent quarter, management cited momentum in the Asia Pacific and Latin American markets as key growth drivers. This highlights the opportunity that lies ahead.
Another indication about where Axon is headed is how much business it already has locked in. The company has put up $806 million in revenue over the past 12 months, but has another $2 billion under contract for the future. That contracted number is 52% higher than it was at this time last year. It’s just another reason I think Axon is a great stock to buy if you’re crafting a high-growth portfolio.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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“While credit history is a key element in evaluating a borrower’s ability to make a mortgage payment, building credit in the United States is not an equitable endeavor,” said Hugh Frater, Fannie Mae’s chief executive, in a blog post.So rent should count for something. But according to FICO, which uses data from credit reports to build scoring systems that are already part of the mortgage underwriting process, only 0.3 percent of the 80 million or so adults who live in rental housing have any mention of rent in their credit files.How can this be? I wanted to talk to the three dominant bureaus — Equifax, Experian and TransUnion — about renters. Equifax and TransUnion did not reply at all, while Experian sent a statement in lieu of an interview. As is often the case when I ask after their doings, my request somehow ended up at their industry association instead, even though I hadn’t asked to speak with anyone there.Francis Creighton, who runs the Consumer Data Industry Association, said it, too, was aghast at the fact that, according to FICO, information on rent payments made up less than 1 percent of the data that companies and others sent to the bureaus.“It’s a really big problem,” he said. “We desperately want that information on file.”For the credit bureaus to get it, however, landlords — including hundreds of thousands of people who own an apartment here or a three-flat there — would have to hand it over.“They have no incentive to do it,” said Laurie Goodman, vice president of housing finance policy at the Urban Institute. It’s worth doing only if everyone contributes, because then the landlords could make use of that new collection of data to screen tenants. And everyone is very much not contributing at present.Given that the credit bureaus don’t have the rental data that Fannie Mae and others want so much, Fannie developed a somewhat abstruse workaround involving a “desktop underwriter” validation engine and orders for “verification of assets.

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By Jon Hill (September 10, 2021, 10:37 PM EDT) — After a Texas federal judge upheld the Consumer Financial Protection Bureau’s remaining payday loan regulations, the trade groups that sued to block them are asking for the regulations to remain suspended while they take their fight to the Fifth Circuit.The Community Financial Services Association of America Ltd. and Consumer Service Alliance of Texas filed a formal notice of appeal on Thursday over U.S. District Judge Lee Yeakel’s rejection last month of their legal challenge to the agency’s 2017 rule on small-dollar loans.

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By Jon Hill (September 10, 2021, 10:37 PM EDT) — After a Texas federal judge upheld the Consumer Financial Protection Bureau’s remaining payday loan regulations, the trade groups that sued to block them are asking for the regulations to remain suspended while they take their fight to the Fifth Circuit.The Community Financial Services Association of America Ltd. and Consumer Service Alliance of Texas filed a formal notice of appeal on Thursday over U.S. District Judge Lee Yeakel’s rejection last month of their legal challenge to the agency’s 2017 rule on small-dollar loans.

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Wells Fargo will pay $250 million after regulators accused the bank of failing to properly oversee home mortgages, which are handled by a Des Moines-based company division.
Bank executives and the U.S. Office of the Comptroller of the Currency announced a consent order Thursday requiring Wells Fargo employees to improve their decision-making when evaluating whether borrowers qualify for relief on loan payments. 
“This is unacceptable,” Acting Comptroller of the Currency Michael Hsu said in a statement. “…  The OCC will continue to use all the tools at our disposal, including business restrictions, to ensure that national banks address problems in a timely manner, treat customers fairly, and operate in a safe and sound manner.”
In addition to paying the fine, Wells Fargo executives agreed to temporarily stop servicing other lenders’ mortgages, an arrangement in which the bank receives fees for handling other banks’ customer payments. At the other end of such arrangements, Wells Fargo also will stop giving other lenders the fee-generating servicing responsibilities for some mortgages in exchange for an up-front payment.

More:Ankeny is getting a new Costco; city officials approved the plan for the Des Moines suburb
Wells Fargo & Co. issues more mortgages than any other bank in the country. Ranked as metro Des Moines’ No. 1 private employer, it has about 13,000 workers in central Iowa, a spokesperson told the Des Moines Register earlier this year.
According to an OCC cease-and-desist order, a committee at the bank needs to write policies to help employees more accurately evaluate whether borrowers qualify for mortgage relief.
The OCC also ordered the company to assess employees’ decision-making every three months, create a new plan for how to handle customer complaints, properly document all decisions and maintain enough workers to handle borrowers’ requests for relief.

“Building an appropriate risk and control infrastructure has been and remains Wells Fargo’s top priority,” Wells Fargo CEO Charlie Scharf said in a statement Thursday. “The OCC’s actions today point to work we must continue to do to address significant, longstanding deficiencies.”
Guy Cecala, publisher of Inside Mortgage Finance, said the regulators’ penalty against Wells Fargo ties back to the Great Recession, when subprime mortgages caused of wave of foreclosures.

More:Huge, new Hy-Vee set to open next week in Grimes with gym showroom, other new departments
In the wake of the economic collapse, lawmakers and regulators required banks to offer special debt relief to certain borrowers who may have been victims of predatory lending. For example, a borrower whose mortgage rate doubled to 12% may not have enough income to keep up with monthly payments.
As that borrower fell behind, Cecala said, regulators required lenders to offer help rather than immediately foreclose. The banks may have needed to lower the borrower’s interest rate or provide more time to catch up.

Cecala said some lenders have struggled to determine which customers qualify for relief. The OCC and the Consumer Financial Protection Bureau also fined Wells Fargo a combined $1 billion three years ago after the bank improperly charged customers fees to “lock” a mortgage interest rate for a certain period of time.
“Despite a lot of effort, Wells Fargo hasn’t fixed everything that needs to be fixed,” Cecala said Friday.

In its statement Thursday, Wells Fargo also announced that its 2016 consent order from  the Consumer Financial Protection Bureau expired this week. That action was tied to the bank’s fake accounts scandal, in which thousands of employees opened new accounts in unwitting customers’ names to increase commissions.
More:Casey’s continues strong recovery despite pandemic reduction in commuter traffic
“Our work to build the right foundation for a company of our size and complexity will not follow a straight line,” Scharf said in a statement. “We are managing multiple issues concurrently, and progress will come alongside setbacks. That said, we believe we’re making significant progress.”
Wells Fargo most recently reported a $6 billion profit for the quarter ending June 30. That included $2.07 billion in revenue from its home lending division, a 40% increase over the same period a year earlier.
Tyler Jett covers jobs and the economy for the Des Moines Register. Reach him at [email protected], 515-284-8215, or on Twitter at @LetsJett.

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In a House Financial Services Committee hearing on Friday, Democrats and Republicans agreed that COVID-related rental assistance has been slow to get into the hands of tenants and landlords. But the agreement largely ended there, as elected officials and invited witnesses clashed over how to get the ball rolling on disbursement, with much of the money allocated unspent even though millions of tenants are facing eviction as pandemic protections expire.
“There’s no question that the funds aren’t reaching landlords and renters quickly enough,” Maxine Waters, a Democratic representative from California and the committee’s chair, said in her opening statement.
For renters, the slow pace of assistance payouts can mean a heightened chance of eviction, and for landlords, it can mean less income to keep a building maintained.

Rental assistance basics
Congress has authorized $46 billion in rental assistance since the start of the pandemic and arranged for those funds to be distributed locally. Tenants have had vastly different experiences applying for and receiving that assistance based on where they live. Some municipalities have distributed most of the money they were allocated, while others have only given out a small portion.
The New York Times reported that only about 40 percent of eligible tenants are receiving assistance or are temporarily protected from eviction by local regulations.
In general, the program is structured so that tenants need to apply, but landlords need to accept the funding and ultimately receive the disbursements directly.
Proposed fixes for rental assistance
Diane Yentel, president and CEO of the National Low Income Housing Coalition, a witness at Friday’s hearing, said some small tweaks to the legislation would go a long way to making funding more accessible nationally.
Among her proposals, most of which were included in a Democratic bill to update the programs, were suggestions that municipalities and landlords should be doing more outreach to make sure tenants were aware of the assistance that was available. She also said local administrators should hire more employees to process assistance applications, and that tenants should be allowed to receive the funds directly, even if their landlords did not want to participate.
Another speed bump, she noted, was that some places required formal documentation of the pandemic’s impact on a tenant’s ability to pay, even though both the White House and Treasury Department said that self-attestation was acceptable. Yentel said more robust enforcement of those guidelines would give a boost to tenants.
What other resources are available?
If you’re struggling to make your rent payments, you should be in touch with your landlord to keep them in the loop and possibly work out a payment plan.
Then, you should get in touch with your state or local housing authority to see what’s involved in applying for rental assistance.
The Consumer Financial Protection Bureau’s rental assistance finder is designed to help renters and landlords easily find and apply for payment assistance for rent, utilities and other expenses, the agency said in a statement.
If you do not have regular access to a computer, housing advocacy or legal aid groups in your area may be able to help you fill out your application, so it’s worth getting in touch with them, too.
Bottom line
The coronavirus pandemic affected renters much more than homeowners when it comes to housing stability. The federal government made billions of dollars available in rental assistance, but those funds have been slow to get into the hands of tenants in many areas. Most cities and states have resources to help if you’re behind on rent, and it’s important to do your research and get the aid you’re entitled to.

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… fair and recognized as such by the Consumer Financial Protection Bureau. Altogether, this is driving tremendous growth rates for Upstart.

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Federal regulators slapped Wells Fargo with yet another fine for failing to move fast enough to compensate customers who were victims of the bank’s “unsafe or unsound” practices.
The Office of the Comptroller of the Currency, the banking regulator within the Treasury Department, told the scandal-plagued bank it must pay $250 million because it couldn’t -— or wouldn’t — make good on its promises. The punishment stems from a 2018 order that found problems with the bank’s auto and home lending operations, including insufficient risk-management practices and improper fines imposed on customers.

At the time, as part of a $1 billion settlement, the bank agreed to improve its practices and pay restitution to customers. But that’s not happening fast enough, according to the OCC.
“Wells Fargo has not met the requirements of the OCC’s 2018 action against the bank. This is unacceptable,” said Acting Comptroller Michael J. Hsu.
In addition to the fine, the regulator is restricting the bank’s mortgage business until it can address the problems.
Wells Fargo has struggled to get its house in order after a series of scandals erupted five years ago. Since fall 2016, the bank has admitted to forcing customers to pay unnecessary fees and opening millions of fake accounts in what the Federal Reserve has described as “widespread customer abuse.” In 2018 the Fed imposed a cap on Wells Fargo’s assets — essentially barring the it from increasing its balance sheet until it addresses the compliance failures that led to the scandals.
“The OCC’s actions today point to work we must continue to do to address significant, longstanding deficiencies,” said Charlie Scharf, Wells Fargo’s fourth CEO in five years, in a statement Thursday. “Building an appropriate risk and control infrastructure has been and remains Wells Fargo’s top priority.”
Wells Fargo shares were up slightly midday Friday, signaling that investors were shrugging off the OCC fine.
“Overall, I think this is a modest positive for the stock,” said Kyle Sanders, a senior analyst at Edward Jones. Sanders noted that the stock took a hit last week after media reports suggested bigger regulatory setbacks were around the corner. “For many investors, today’s announcement was less punitive than feared.”
In addition to regulatory headaches, Wells found itself mired in a recent PR nightmare, first canceling a popular lending tool and then partially reversing the decision after a month of outrage from consumers and advocates.
In his statement Thursday, Scharf announced a silver lining of sorts that may have soothed investors. A separate consent order aimed at the bank’s sales practices from 2016 — this one from the Consumer Financial Protection Bureau — has expired.
“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,” the CEO said.
Scharf, who has worked to transform the bank since he took the helm in 2019, said the bank had come a long way, but isn’t out of the woods.
“Our work to build the right foundation for a company of our size and complexity will not follow a straight line … That said, we believe we’re making significant progress, the work required is clear, and I remain confident in our ability to complete it,” he said.
The-CNN-Wire™ & © 2021 Cable News Network, Inc., a WarnerMedia Company. All rights reserved.

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The Office of the Comptroller of the Currency (OCC), which regulates national banks in the U.S., announced Thursday that it would fine Wells Fargo (NYSE:WFC) $250 million for “unsafe” practices tied to its home lending loss-mitigation program. The OCC also said the fine had to do with the bank taking too long to become compliant with a 2018 OCC consent order related to mortgage violations and deficiencies in risk management. The OCC also issued a cease and desist order against the bank, requiring Wells Fargo to create a better home lending loss-mitigation program. 
While all of this sounds pretty bad, Wells Fargo stock price actually climbed in after-hours trading following the announcement, as investors reacted positively to the news. Here’s why.

Image source: Wells Fargo.

How did Wells Fargo get here?
The bank has been dealing with a litany of regulatory issues since its phony-accounts scandal came to light in 2016. Employees at the bank previously opened millions of depository and credit card accounts without the consent of customers. In 2018, the situation continued to get worse when the Federal Reserve placed a $1.95 trillion asset cap on the bank that essentially prevented Wells Fargo from growing its balance sheet.
But after five years of lawsuits, billions of dollars in fines, three years under the asset cap, and essentially a whole new leadership team being put in place, Wells Fargo appeared to be turning the corner this year. In January, the OCC ended a 2015 consent order related to anti-money-laundering issues at the bank.
Then in February, Bloomberg reported that the Federal Reserve had approved the bank’s proposal for overhauling its risk-management and governance structure, which is seen as a critical step toward getting the asset cap removed. Although Wells Fargo is currently operating under roughly 10 consent orders from various banking regulators, the asset cap is seen as the most prohibitive for the stock.

Wells Fargo stock traded around $50 a share toward the end of August until Bloomberg reported that regulators such as the OCC and Consumer Financial Protection Bureau (CFPB), which deals with consumer complaints in the banking and financial industry, were contemplating further regulatory action. The stock tumbled into the low $40s on the news. But the official news of the fine and order (which confirmed Bloomberg’s reporting) seems to have quelled some of the renewed uncertainty surrounding Wells Fargo stock.
Easing renewed uncertainty
Following the OCC order, Wells Fargo issued a statement that revealed that as of Sept. 8, a CFPB order related to the bank’s phony accounts scandal and retail sales practices had expired. “The expiration of the CFPB’s 2016 consent order is representative of progress we are making,” CEO Charlie Scharf said in the statement. He added:

As I’ve said over the past year, our work to build the right foundation for a company of our size and complexity will not follow a straight line. 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.

This statement and the expiration of the CFPB order are very important. As I wrote following the Bloomberg report in August, Wells Fargo is operating under 10 consent orders from different banking regulators on different issues. Just because the bank suffers a setback on one consent order from the OCC doesn’t mean it isn’t making progress on other regulatory matters. As we just saw, the OCC imposed a new order on the bank as it was getting free of a separate CFPB order, confirming that progress can be made on some regulatory orders, while setbacks occur.
What’s important here is that this fine and order do not appear to be about the asset cap, which is the most restrictive and punitive of all of the orders in place. It essentially prevents Wells Fargo, one of the largest and strongest commercial lenders in the country, from having free rein to grow its balance sheet.

The asset cap has already cost the bank billions of dollars in profits. Knowing that this recent OCC order is not related to the asset cap can give investors some confidence that the progress the bank has made in getting the cap removed is still intact.
Near-term asset-cap removal still possible
While the new regulatory order will certainly keep investors on their toes, the clarity around the Bloomberg report leaves the market with renewed hope that perhaps the asset cap, which has already been in place for more than three years, could still be removed in the near term. Maybe that’s later this year or in 2022, but the asset cap is still the biggest hindrance to the stock.
If it can get removed — especially before interest rates rise — that would be a huge boost for Wells Fargo’s profitability and a huge catalyst for the stock, even if there are still other consent orders in place when it happens.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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At the same time, the bank announced that a consent order issued by the Consumer Financial Protection Bureau (CFPB) regarding its retail sales …

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With the nationwide moratorium on mortgage foreclosures ending, millions of American homeowners are facing the prospect of receiving a letter from their lender advising them that, unless they bring their mortgage payments current, the lender will file a foreclosure complaint in court.  And thus begins a difficult process for the homeowner.
Although the moratorium has expired, there are still some federal programs in place to assist borrowers who are facing foreclosure. But there are limits to how much help these programs can provide.

For example, the U.S. Consumer Financial Protection Bureau has issued a new rule requiring lenders to contact a borrower in person or by phone within 36 days of the borrower’s first missed payment. Another rule requires them to send a written notice to the borrower within 45 days of a missed payment, encouraging the borrower to contact the lender and discuss options for workout plans.

The problem with this and other federal programs is that they do not require the lenders to give a borrower any relief, they only require lenders to contact the borrower and discuss options.  Borrowers should definitely discuss workout plans with their lenders, but it’s important to have a backup strategy in case you can’t reach an agreement. At this point, your lender will almost certainly start the foreclosure process.  Let’s take a look at what happens then.

It begins with the lender sending the borrower a notice that they are in default.  In Florida this is known as a breach letter.  It tells you how much you owe the bank, demands that you pay that amount to bring your loan current, and advises that, unless you pay them that amount, they will accelerate the loan (requiring you to pay the full balance of the mortgage) and foreclose on your property.

If you don’t pay the lender as stated in the breach letter, they will file a complaint in foreclosure.  If you don’t file an answer to the complaint with the court within 20 days, the lender will get a default judgment and your house will be sold. 
If you do file an answer, you’ll give yourself the time you need to work on achieving a settlement with your lender.  Time is your friend.
Speaking of time, consider the impact of the COVID-19 pandemic on the court system.  Because of the shutdowns, the Florida court system has a backlog of nearly one million cases.  Court administrators predict that it will take three years to clear the backlog.
What does this mean to the borrower facing foreclosure?  With such a huge backlog, the court will focus, first and foremost, on resolving cases any way they can.  Florida law provides for an expedited process to quickly grant foreclosing lenders a default judgment.  If you have been served with a foreclosure complaint, it’s important for you to act quickly to defend yourself.  Lenders won’t hesitate to request a default judgment, and the courts won’t hesitate to grant it.
On the other hand, if you actively defend the foreclosure, then lenders, facing the possibility of their foreclosure cases taking years to be resolved, will be much more inclined to settle with the borrower.  And, given the sheer volume of cases that lenders have to manage, such settlements are likely to be more favorable than they would be in normal times.
Foreclosure defense attorneys can advise you on your options.
Tom Algeo, [email protected], is licensed to practice law in Florida and Georgia. He is a real estate attorney specializing in foreclosure defense. His Florida Foreclosure Guide is free to download at www.algeo.com.

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