This document summarizes the CFPB's examination procedures for short-term, small-dollar lending (payday lending). Module 2 addresses compliance with laws around taking applications, evaluating applicants, and originating loans, including ECOA, FCRA, TILA, and other risks. Examiners will assess compliance with requirements for non-discrimination, accurate disclosures, and proper treatment of customers. Module 3 covers repayment of loans and issues around rollovers. While not as heavily regulated, repayment is still subject to important rules depending on loan features. Examiners will seek to identify any violations of applicable laws.
This document summarizes the key requirements for providing adverse action notices when evaluating consumer loan applications. It discusses that lead companies must send denial notices if they do not forward a consumer's information to any lenders. Lenders "peeking" at consumer information without extending credit must ultimately provide credit, an adverse action notice, or a notice of incomplete application. Creditors can contract with third parties to send bundled denial notices when no credit is extended. The safest approach is to provide compliant adverse action notices to avoid penalties under the Equal Credit Opportunity Act and Fair Credit Reporting Act.
This document discusses credit, credit management, and the credit process. It covers the social aspect of borrowing, the nature of credit as a means to obtain something of value in exchange for a future promise to pay. It describes the characteristics of credit including risk and trust. It outlines different types of credits including consumer, bank, investment, agricultural, and export credits. It discusses laws around truth in lending and outlines a company's credit policy. It also covers important aspects of the credit process like credit analysis, sources of credit information, financial statements, important questions to consider for credit, maintaining a credit file, and collection procedures.
This document summarizes key concepts related to consumer credit, including:
- Types of interest calculations like simple interest and add-on interest
- Tools for protecting your credit like disputing errors under the Fair Credit Billing Act
- Consequences of late or missed payments like damage to your credit score
- Options when facing debt problems such as credit counseling, Chapter 7 bankruptcy to discharge debts, or Chapter 13 bankruptcy repayment plans
- Regulations that aim to educate consumers and restrict predatory practices like the CARD Act
Understanding the CFPB's New Lending StandardsDavid Rocheford
The Consumer Financial Protection Bureau (CFPB) was created in 2011 to regulate consumer financial products and protect consumers. It is responsible for creating and enforcing new rules regarding mortgages under the Dodd-Frank Act. Two key rules are the Ability-to-Repay (ATR) rule, which requires lenders to ensure borrowers can afford their loans, and the Qualified Mortgage (QM) rule, which provides legal protections to lenders originating certain loans. The CFPB also introduced new Loan Estimate and Closing Disclosure forms to replace previous disclosures and implemented new timing and content requirements.
[Lawsuit Financing] Everything You Should Know Before You Signlawsuitlegal
Waiting on a legal settlement but need money now?
Maybe you are in the middle of a civil trial, but it's taking too long?
Court cases can be delayed, attorneys for both defendant and the plaintiff can string along the trial for what seems like an endless period, going from deposition to deposition -- meanwhile you NEED a fast financial recovery.
If you were injured, your health care costs could be piling up, bills continue to come in, and you may have lost your job, your ability to work, and the legal system just isn't moving fast enough.
It's an all too common experience.
The solution is legal financing (if your case qualifies), allowing you to borrow against your likely settlement or awarded recovery.
In our latest data snapshot, we outline the length of time most civil trials take to reach resolution. How long it takes on average for a filed complaint to reach trial. -- Here's a hint: It can take quite a bit longer than most people expect.
Then we deep dive into what you NEED to know about legal loans and how they work.
Pre-settlement financing may not be in your best interest, or it might be just what you need to advance the funds you have coming.
Knowing what to expect will ensure you know your options, know what risks there are, the costs etc. So you can make the right choice for YOU.
The document provides an overview of strategies for protecting against and collecting from troubled companies in the United States during an economic recession. It discusses warning signs that a company may be facing financial distress, the claims priority process in bankruptcy, and credit enhancement tools like letters of credit, security agreements, guaranties, and credit insurance that can strengthen a creditor's position.
1) The microfinance lending process involves several steps including an orientation for applicants, collecting and verifying application information, reviewing applications in a credit committee meeting, processing approved loans, disbursing funds to borrowers, and collecting loan payments.
2) Key steps are conducting credit checks of applicants, presenting application materials to a credit committee for approval, preparing loan documentation if approved, signing documents and collecting the first payment from borrowers, and ongoing collection of subsequent loan payments.
3) Regular collection of loan payments is managed through issuing pre-numbered payment receipts to agents who collect and batch payments for accounting and updating of borrower accounts.
This document summarizes the key requirements for providing adverse action notices when evaluating consumer loan applications. It discusses that lead companies must send denial notices if they do not forward a consumer's information to any lenders. Lenders "peeking" at consumer information without extending credit must ultimately provide credit, an adverse action notice, or a notice of incomplete application. Creditors can contract with third parties to send bundled denial notices when no credit is extended. The safest approach is to provide compliant adverse action notices to avoid penalties under the Equal Credit Opportunity Act and Fair Credit Reporting Act.
This document discusses credit, credit management, and the credit process. It covers the social aspect of borrowing, the nature of credit as a means to obtain something of value in exchange for a future promise to pay. It describes the characteristics of credit including risk and trust. It outlines different types of credits including consumer, bank, investment, agricultural, and export credits. It discusses laws around truth in lending and outlines a company's credit policy. It also covers important aspects of the credit process like credit analysis, sources of credit information, financial statements, important questions to consider for credit, maintaining a credit file, and collection procedures.
This document summarizes key concepts related to consumer credit, including:
- Types of interest calculations like simple interest and add-on interest
- Tools for protecting your credit like disputing errors under the Fair Credit Billing Act
- Consequences of late or missed payments like damage to your credit score
- Options when facing debt problems such as credit counseling, Chapter 7 bankruptcy to discharge debts, or Chapter 13 bankruptcy repayment plans
- Regulations that aim to educate consumers and restrict predatory practices like the CARD Act
Understanding the CFPB's New Lending StandardsDavid Rocheford
The Consumer Financial Protection Bureau (CFPB) was created in 2011 to regulate consumer financial products and protect consumers. It is responsible for creating and enforcing new rules regarding mortgages under the Dodd-Frank Act. Two key rules are the Ability-to-Repay (ATR) rule, which requires lenders to ensure borrowers can afford their loans, and the Qualified Mortgage (QM) rule, which provides legal protections to lenders originating certain loans. The CFPB also introduced new Loan Estimate and Closing Disclosure forms to replace previous disclosures and implemented new timing and content requirements.
[Lawsuit Financing] Everything You Should Know Before You Signlawsuitlegal
Waiting on a legal settlement but need money now?
Maybe you are in the middle of a civil trial, but it's taking too long?
Court cases can be delayed, attorneys for both defendant and the plaintiff can string along the trial for what seems like an endless period, going from deposition to deposition -- meanwhile you NEED a fast financial recovery.
If you were injured, your health care costs could be piling up, bills continue to come in, and you may have lost your job, your ability to work, and the legal system just isn't moving fast enough.
It's an all too common experience.
The solution is legal financing (if your case qualifies), allowing you to borrow against your likely settlement or awarded recovery.
In our latest data snapshot, we outline the length of time most civil trials take to reach resolution. How long it takes on average for a filed complaint to reach trial. -- Here's a hint: It can take quite a bit longer than most people expect.
Then we deep dive into what you NEED to know about legal loans and how they work.
Pre-settlement financing may not be in your best interest, or it might be just what you need to advance the funds you have coming.
Knowing what to expect will ensure you know your options, know what risks there are, the costs etc. So you can make the right choice for YOU.
The document provides an overview of strategies for protecting against and collecting from troubled companies in the United States during an economic recession. It discusses warning signs that a company may be facing financial distress, the claims priority process in bankruptcy, and credit enhancement tools like letters of credit, security agreements, guaranties, and credit insurance that can strengthen a creditor's position.
1) The microfinance lending process involves several steps including an orientation for applicants, collecting and verifying application information, reviewing applications in a credit committee meeting, processing approved loans, disbursing funds to borrowers, and collecting loan payments.
2) Key steps are conducting credit checks of applicants, presenting application materials to a credit committee for approval, preparing loan documentation if approved, signing documents and collecting the first payment from borrowers, and ongoing collection of subsequent loan payments.
3) Regular collection of loan payments is managed through issuing pre-numbered payment receipts to agents who collect and batch payments for accounting and updating of borrower accounts.
Focus on Fair Lending... Tips to Avoid the TrapsE Andrew Keeney
This document provides an overview and summary of fair lending laws and best practices for avoiding fair lending violations. It discusses key laws like the Equal Credit Opportunity Act and penalties agencies like the CFPB and DOJ have issued for violations. The document also summarizes fair lending examination focus areas and provides tips for credit unions to implement like developing fair lending policies and monitoring for disparities in lending practices.
Lending Compliance Hot Topics with ICS Compliance_January 2010ICS Compliance
Although there is much legislation in motion on Capitol Hill, financial institutions are already adapting to interim and/or final rules. This webinar will cover hot compliance issues affecting consumer lending, and will include flood insurance requirements, disclosures affecting mortgage loans, private student loans, and credit cards.
This document summarizes a legal article about strategies for commercial real estate loan workouts. It discusses:
1) Signs that a commercial loan may be deteriorating and steps lenders should take to prepare for potential default, including engaging counsel.
2) Due diligence the lender and counsel should perform on the loan documents, borrower financials, collateral, and other creditors.
3) Factors the lender should consider in determining whether enforcement or a negotiated workout is best, such as collateral value and risks of loss.
This document discusses various types of consumer loans. It defines consumer loans as loans given to individuals for personal or household purposes. Consumer loans can be secured by collateral like a home or car, or they can be unsecured. The document then describes different types of secured and unsecured consumer loans such as home loans, vehicle loans, credit cards, and others. It also discusses key terms related to consumer loans like interest rates, loan amounts, repayment periods and more.
This document discusses complaints made by older adults against financial institutions that were investigated by the Financial Services Ombudsman. It provides examples of upheld complaints, such as an unsuitable long-term investment bond sold to an 83-year-old woman that could not be encashed. The document suggests procedures for sales to older adults, such as having a family member or third party present and senior staff approval of documents. It stresses the need for older customers to fully understand investment products and consequences.
SAFE 20 Hour Loan Originator Pre-licensing Class SlidesJillayne Schlicke
The document outlines an agenda for a 20-hour mortgage loan origination training course. It includes sections on the Uniform State Test, exam components, exam preparation strategies, the history of mortgage lending, an introduction to the different entities in the mortgage industry, requirements for loan applications, qualifying borrowers, and underwriting guidelines. The trainer leads discussions on topics like occupancy requirements, income and asset verification, and gaps in employment history. Case studies are used to have students evaluate loan approval decisions.
Corporate Bankruptcy 101 & Select Bankruptcy Issuesmelissaapena
This document summarizes key topics relating to corporate bankruptcy, including the different chapters of bankruptcy, the chapter 11 bankruptcy process, roles and responsibilities of various parties in a chapter 11 case such as the debtor, professionals, creditors, and the United States trustee. It also discusses first day motions, debtor-in-possession financing, cash collateral usage, executory contracts, claims processes, and other select bankruptcy issues.
Robbin Jones has over 15 years of experience in regulatory compliance, risk management, and financial services. She has a proven track record of evaluating compliance issues and implementing solutions. Her areas of expertise include asset management compliance, marketing review, and drafting compliance procedures. She has held roles examining financial institutions for regulatory compliance and as a mortgage processor, loan servicing representative, and product development analyst.
The document discusses different options available to distressed debtors including bankruptcies, out-of-court workouts and liquidations, and assignments for the benefit of creditors. It provides details on the advantages and disadvantages of each option from the perspectives of both debtors and creditors. Key factors in determining the best option include the debtor's situation, ability to repay debts, and maintaining business relationships.
Jeff Wilson II, a personal finance counselor and CPA, presented on understanding credit reports and credit scores. He discussed what is included in a credit report, how credit scores are calculated, and factors that affect credit scores like payment history and credit utilization. He also provided tips for disputing errors, building credit, dealing with debt collectors, and help determining if bankruptcy is the right option. The presentation aimed to help participants better understand their credit and take steps to improve their financial prosperity.
This document provides an overview of credit reports and credit scores. It discusses what information is included in a credit report from the major credit bureaus, how credit scores are calculated and used to assess creditworthiness, and ways to build or repair credit. The presentation covers disputing errors, the effects of payment history and debt levels on credit scores, and cautions against credit repair scams. The goal is to help people understand their financial reports and profiles in order to make informed financial decisions.
Us foreign corrupt practices act presentation to jsm partners (july 2008) 1...Mayer Brown LLP
The document provides an overview of the US Foreign Corrupt Practices Act (FCPA) and significant compliance issues. It summarizes recent FCPA enforcement actions in China and the impact on Chinese companies. It also lists representative clients of Mayer Brown LLP and opportunities from its merger with JSM.
EEOC FCRA When Working With Temp or Contract Employeesssallay
This document discusses legal risks involved in background checks and other pre-hire inquiries. It notes that 92% of employers conduct some form of background check. Key points include: considering the job-relatedness of inquiries; ensuring proper training of those conducting checks; allowing for individualized assessments of criminal histories; and complying with laws like the Fair Credit Reporting Act when using third parties. It also addresses new "ban the box" laws preventing inquiries into criminal history until later in the hiring process.
This document discusses characteristics of financial services consumers. It identifies that consumers rely more on personal recommendations than independent research when seeking information. When evaluating services, consumers focus on price and physical attributes more than other factors. Due to the intangible nature of services, consumers perceive greater risk and rely more on brand loyalty and relationships with providers. The document also outlines four dominant financial traits of consumers: their orientation toward financial planning, tolerance for financial risk, level of engagement with personal finances, and approach to financial decision making.
The document discusses Pre-Paid Legal Services and their offerings, which include legal plans, identity theft protection services, and business opportunities. The legal plans provide access to lawyers for everyday legal needs like traffic violations, identity restoration, and IRS audits. Identity theft protection services include credit monitoring, restoration assistance if identity is stolen, and coverage for minor children. The business opportunities allow individuals to earn commissions by selling memberships and recruiting others.
The document provides an overview of the interim permission and full authorization processes firms must go through to be regulated by the Financial Conduct Authority (FCA) for consumer credit activities. It discusses what interim permission allows, how to register for it, and obligations during the interim period. It then outlines the full authorization application process, including required documentation, threshold conditions, alternatives to authorization, and timelines firms should expect. The document aims to help firms navigate the transition to the new regulatory regime for consumer credit which begins on April 1, 2014.
The document discusses Pre-Paid Legal Services, a company that offers legal service plans and memberships. It outlines some of the key problems people face like taxes, loans, and identity theft. It then summarizes Pre-Paid Legal's services which include unlimited phone consultations, document reviews, will preparation, traffic violation representation, trial defense coverage, IRS audit assistance, contingency fee cases, and a 25% discount on other legal services. Members also get 24/7 access to legal consultation through the Legal Shield program.
This document summarizes Jillayne Schlicke's presentation to the Spokane Mortgage Lenders Association on June 16, 2021. The presentation covers RESPA violations, mortgage fraud schemes that emerge during real estate bubbles, and trends in money laundering. Specific topics discussed include affiliated business arrangements, mortgage fraud cases involving misrepresentation of employment or property value, and "silent second" mortgage schemes used to obscure additional debt from lenders.
The Equal Credit Opportunity Act (ECOA) and Regulation B prohibit credit discrimination on the basis of race, color, religion, national origin, sex, marital status, age, receipt of public assistance, and the exercise of certain consumer rights. They require creditors to provide notices of adverse action and retain records. Discrimination can be overt, through disparate treatment, or result from policies that have a disparate impact without sufficient business necessity. Creditors must avoid discouraging applications and cannot require signatures beyond the applicant except under specific circumstances. Permissible considerations include assessing capacity to contract and immigration status.
Fair Lending Testing and Analysis - Made EasyDavid Gilbert
Fair Lending laws have been around for decades, but more robust Fair Lending analysis has recently become a hot-button issue and point of emphasis with regulators.
Financial institutions must now be able mathematically prove no discrimination or "disparate impact/treatment" is occurring in marketing activities, during the loan application process, with pricing and add-on products, and with charge-off and collection practices.
Focus on Fair Lending... Tips to Avoid the TrapsE Andrew Keeney
This document provides an overview and summary of fair lending laws and best practices for avoiding fair lending violations. It discusses key laws like the Equal Credit Opportunity Act and penalties agencies like the CFPB and DOJ have issued for violations. The document also summarizes fair lending examination focus areas and provides tips for credit unions to implement like developing fair lending policies and monitoring for disparities in lending practices.
Lending Compliance Hot Topics with ICS Compliance_January 2010ICS Compliance
Although there is much legislation in motion on Capitol Hill, financial institutions are already adapting to interim and/or final rules. This webinar will cover hot compliance issues affecting consumer lending, and will include flood insurance requirements, disclosures affecting mortgage loans, private student loans, and credit cards.
This document summarizes a legal article about strategies for commercial real estate loan workouts. It discusses:
1) Signs that a commercial loan may be deteriorating and steps lenders should take to prepare for potential default, including engaging counsel.
2) Due diligence the lender and counsel should perform on the loan documents, borrower financials, collateral, and other creditors.
3) Factors the lender should consider in determining whether enforcement or a negotiated workout is best, such as collateral value and risks of loss.
This document discusses various types of consumer loans. It defines consumer loans as loans given to individuals for personal or household purposes. Consumer loans can be secured by collateral like a home or car, or they can be unsecured. The document then describes different types of secured and unsecured consumer loans such as home loans, vehicle loans, credit cards, and others. It also discusses key terms related to consumer loans like interest rates, loan amounts, repayment periods and more.
This document discusses complaints made by older adults against financial institutions that were investigated by the Financial Services Ombudsman. It provides examples of upheld complaints, such as an unsuitable long-term investment bond sold to an 83-year-old woman that could not be encashed. The document suggests procedures for sales to older adults, such as having a family member or third party present and senior staff approval of documents. It stresses the need for older customers to fully understand investment products and consequences.
SAFE 20 Hour Loan Originator Pre-licensing Class SlidesJillayne Schlicke
The document outlines an agenda for a 20-hour mortgage loan origination training course. It includes sections on the Uniform State Test, exam components, exam preparation strategies, the history of mortgage lending, an introduction to the different entities in the mortgage industry, requirements for loan applications, qualifying borrowers, and underwriting guidelines. The trainer leads discussions on topics like occupancy requirements, income and asset verification, and gaps in employment history. Case studies are used to have students evaluate loan approval decisions.
Corporate Bankruptcy 101 & Select Bankruptcy Issuesmelissaapena
This document summarizes key topics relating to corporate bankruptcy, including the different chapters of bankruptcy, the chapter 11 bankruptcy process, roles and responsibilities of various parties in a chapter 11 case such as the debtor, professionals, creditors, and the United States trustee. It also discusses first day motions, debtor-in-possession financing, cash collateral usage, executory contracts, claims processes, and other select bankruptcy issues.
Robbin Jones has over 15 years of experience in regulatory compliance, risk management, and financial services. She has a proven track record of evaluating compliance issues and implementing solutions. Her areas of expertise include asset management compliance, marketing review, and drafting compliance procedures. She has held roles examining financial institutions for regulatory compliance and as a mortgage processor, loan servicing representative, and product development analyst.
The document discusses different options available to distressed debtors including bankruptcies, out-of-court workouts and liquidations, and assignments for the benefit of creditors. It provides details on the advantages and disadvantages of each option from the perspectives of both debtors and creditors. Key factors in determining the best option include the debtor's situation, ability to repay debts, and maintaining business relationships.
Jeff Wilson II, a personal finance counselor and CPA, presented on understanding credit reports and credit scores. He discussed what is included in a credit report, how credit scores are calculated, and factors that affect credit scores like payment history and credit utilization. He also provided tips for disputing errors, building credit, dealing with debt collectors, and help determining if bankruptcy is the right option. The presentation aimed to help participants better understand their credit and take steps to improve their financial prosperity.
This document provides an overview of credit reports and credit scores. It discusses what information is included in a credit report from the major credit bureaus, how credit scores are calculated and used to assess creditworthiness, and ways to build or repair credit. The presentation covers disputing errors, the effects of payment history and debt levels on credit scores, and cautions against credit repair scams. The goal is to help people understand their financial reports and profiles in order to make informed financial decisions.
Us foreign corrupt practices act presentation to jsm partners (july 2008) 1...Mayer Brown LLP
The document provides an overview of the US Foreign Corrupt Practices Act (FCPA) and significant compliance issues. It summarizes recent FCPA enforcement actions in China and the impact on Chinese companies. It also lists representative clients of Mayer Brown LLP and opportunities from its merger with JSM.
EEOC FCRA When Working With Temp or Contract Employeesssallay
This document discusses legal risks involved in background checks and other pre-hire inquiries. It notes that 92% of employers conduct some form of background check. Key points include: considering the job-relatedness of inquiries; ensuring proper training of those conducting checks; allowing for individualized assessments of criminal histories; and complying with laws like the Fair Credit Reporting Act when using third parties. It also addresses new "ban the box" laws preventing inquiries into criminal history until later in the hiring process.
This document discusses characteristics of financial services consumers. It identifies that consumers rely more on personal recommendations than independent research when seeking information. When evaluating services, consumers focus on price and physical attributes more than other factors. Due to the intangible nature of services, consumers perceive greater risk and rely more on brand loyalty and relationships with providers. The document also outlines four dominant financial traits of consumers: their orientation toward financial planning, tolerance for financial risk, level of engagement with personal finances, and approach to financial decision making.
The document discusses Pre-Paid Legal Services and their offerings, which include legal plans, identity theft protection services, and business opportunities. The legal plans provide access to lawyers for everyday legal needs like traffic violations, identity restoration, and IRS audits. Identity theft protection services include credit monitoring, restoration assistance if identity is stolen, and coverage for minor children. The business opportunities allow individuals to earn commissions by selling memberships and recruiting others.
The document provides an overview of the interim permission and full authorization processes firms must go through to be regulated by the Financial Conduct Authority (FCA) for consumer credit activities. It discusses what interim permission allows, how to register for it, and obligations during the interim period. It then outlines the full authorization application process, including required documentation, threshold conditions, alternatives to authorization, and timelines firms should expect. The document aims to help firms navigate the transition to the new regulatory regime for consumer credit which begins on April 1, 2014.
The document discusses Pre-Paid Legal Services, a company that offers legal service plans and memberships. It outlines some of the key problems people face like taxes, loans, and identity theft. It then summarizes Pre-Paid Legal's services which include unlimited phone consultations, document reviews, will preparation, traffic violation representation, trial defense coverage, IRS audit assistance, contingency fee cases, and a 25% discount on other legal services. Members also get 24/7 access to legal consultation through the Legal Shield program.
This document summarizes Jillayne Schlicke's presentation to the Spokane Mortgage Lenders Association on June 16, 2021. The presentation covers RESPA violations, mortgage fraud schemes that emerge during real estate bubbles, and trends in money laundering. Specific topics discussed include affiliated business arrangements, mortgage fraud cases involving misrepresentation of employment or property value, and "silent second" mortgage schemes used to obscure additional debt from lenders.
The Equal Credit Opportunity Act (ECOA) and Regulation B prohibit credit discrimination on the basis of race, color, religion, national origin, sex, marital status, age, receipt of public assistance, and the exercise of certain consumer rights. They require creditors to provide notices of adverse action and retain records. Discrimination can be overt, through disparate treatment, or result from policies that have a disparate impact without sufficient business necessity. Creditors must avoid discouraging applications and cannot require signatures beyond the applicant except under specific circumstances. Permissible considerations include assessing capacity to contract and immigration status.
Fair Lending Testing and Analysis - Made EasyDavid Gilbert
Fair Lending laws have been around for decades, but more robust Fair Lending analysis has recently become a hot-button issue and point of emphasis with regulators.
Financial institutions must now be able mathematically prove no discrimination or "disparate impact/treatment" is occurring in marketing activities, during the loan application process, with pricing and add-on products, and with charge-off and collection practices.
http://thebestcompanys.com/credit-monitoring/company/myfico/
MyFICO offers customers what is considered the industry standard in terms of credit monitoring and credit scoring services. Since 2001, MyFICO has been assisting customers with their annual credit reports, daily credit monitoring, and even identity protection services.
This document provides information for dentists on financing dental transitions and maintaining a good relationship with lenders. It discusses preparing for a practice acquisition loan by assessing personal credit and assembling required documents. It outlines different types of lenders and questions to ask them. It also covers analyzing a dental practice's cash flow, typical loan terms and conditions, and the commitment letter process. Maintaining timely payments and open communication are emphasized as important for keeping a positive relationship with lenders over the long term.
HRF Code of Conduct Training - updated 10.10.22.pptxDollySabharwal2
This document provides a code of conduct for contractors participating in the Home Run Financing PACE program. It outlines ethical standards around truthful disclosures, fair treatment of customers, fraud prevention, and compliance with relevant laws. Specific guidelines address proper handling of PACE documents, nondiscrimination, protecting seniors from financial abuse, and ensuring project completion before payment. Contractors are instructed to treat customers honestly, make full disclosures, and not take advantage of people.
Biden has proposed canceling federal student loan debt for those who attended public or private HBCUs/MSIs for undergraduate tuition if they earn less than $125,000. The proposals would not affect private loans. Borrowers should check studentaid.gov for updates and make sure their contact info is correct. There are several ways to get loans discharged or forgiven such as borrower defense, total and permanent disability, or school closure. Borrowers can apply for borrower defense or check eligibility for other programs.
Exploratory Data Analysis For Credit Risk AssesmentVishalPatil527
This document presents an analysis of credit risk for a bank. It aims to identify patterns that indicate if a client will have difficulty paying installments. The analysis includes:
- Cleaning and merging loan application and previous loan data
- Analyzing relationships between client attributes and payment difficulties through visualization
- Key insights show strong indicators of default include clients with certain housing types, family statuses, occupations or lower education levels. Clients with higher incomes, providing more documents, or older ages are less likely to default. Based on these insights, a credit scoring system is proposed to help the bank make lending decisions.
Welcome to the Team! Recruiting and Hiring, Including Restrictive CovenantsFinancial Poise
You only get one chance to make a first impression, so you want to make sure your company avoids unnecessary missteps when recruiting and hiring employees. Understanding what you can and cannot say during interviews and how to respond when a candidate volunteers information that may be considered “off limits” is essential. At the same time, there are a host of laws being passed throughout the country that address when and what sort of information you can request from applicants regarding their criminal and financial histories. In the event you decide to protect your organization by requiring certain employees to sign some type of restrictive covenants—non-competition, non-solicitation and/or non-disclosure—there are a host of legal and practical issues to consider. This webinar explores these and other issues so that you can be confident, going forward, that you are starting off on the right foot—legally, at least—when you hire new employees.
Part of the webinar series: PROTECTING YOUR EMPLOYEE ASSETS: THE LIFE CYCLE OF THE EMPLOYMENT RELATIONSHIP 2022
See more at https://www.financialpoise.com/webinars/
Focus on Fair Lending - Member Select Mortgage PresentationKaufman & Canoles
The document summarizes a presentation on fair lending laws and best practices for credit unions. It discusses key fair lending laws like the Equal Credit Opportunity Act and Home Mortgage Disclosure Act. It outlines examination priorities for regulators like the NCUA and CFPB. It provides examples of prohibited lending practices and discusses periodic risk assessments and compliance programs credit unions should implement. It also summarizes some fair lending lawsuits and settlements with large lenders.
This is an exciting first time home buyer benefit being offered by the California Association of Realtors through the Housing Affordability Fund.
The Mortgage Protection Program offers insurance payments in the event that a new homebuyer become involuntarily unemployed or accidentally disabled.
For more valuable homebuyer education classes be sure to sign up at www.REblueBird.org to receive notifications of upcoming classes.
Recruiting and Hiring, Including Restrictive Covenants (Series: Protecting Yo...Financial Poise
This document provides information about an upcoming webinar on recruiting and hiring employees. The webinar will discuss legal issues related to interviewing, background checks, job offers, and restrictive covenants. It introduces the four panelists who are attorneys that specialize in labor and employment law. The webinar is part of a series that addresses various aspects of the employer-employee relationship from hiring to termination.
2013 Virginia Credit Union League Fall Compliance ConferenceE Andrew Keeney
This document summarizes a presentation on fair lending laws given at the 2013 Virginia Credit Union League Fall Compliance Conference. It discusses the key fair lending laws, such as the Equal Credit Opportunity Act and Home Mortgage Disclosure Act. It outlines prohibited practices under fair lending laws and highlights the NCUA's focus on fair lending compliance through examinations. It also provides an overview of the fair lending examination process and best practices credit unions can implement to mitigate fair lending risks.
The document summarizes the Equal Credit Opportunity Act (ECOA) and its requirements for creditors. It discusses how ECOA prohibits discrimination in credit based on characteristics like race, color, religion, national origin, sex, marital status, age. It outlines ECOA's requirements for compliance notices, providing reasons for adverse credit actions, and notification procedures that depend on the credit applicant and whether they were denied or granted credit. The document also discusses how ECOA interacts with the Fair Credit Reporting Act regarding use of consumer credit reports and notification requirements for co-applicants.
This document provides an overview and summary of the 2014 NCUA Fair Lending Examinations training presented by E. Andrew Keeney. It discusses the key fair lending laws, regulations and guidance that credit unions must comply with, including the Equal Credit Opportunity Act, Home Mortgage Disclosure Act, Fair Housing Act and CFPB regulations. It outlines prohibited discriminatory practices and factors that the NCUA may focus on during fair lending examinations. The presentation also provides best practices for fair lending compliance.
Welcome to the Team! Recruiting and Hiring, Including Restrictive Covenants (...Financial Poise
You only get one chance to make a first impression, so you want to make sure your company avoids unnecessary missteps when recruiting and hiring employees. Understanding what you can and cannot say during interviews and how to respond when a candidate volunteers information that may be considered “off limits” is essential. At the same time, there are a host of laws being passed throughout the country that address when and what sort of information you can request from applicants regarding their criminal and financial histories. In the event you decide to protect your organization by requiring certain employees to sign some type of restrictive covenants—non-competition, non-solicitation and/or non-disclosure—there are a host of legal and practical issues to consider. This webinar explores these and other issues so that you can be confident, going forward, that you are starting off on the right foot—legally, at least—when you hire new employees.
To listen to this webinar on-demand, go to: https://www.financialpoise.com/financial-poise-webinars/recruiting-and-hiring-including-restrictive-covenants-2020/
The document summarizes a presentation on fair lending laws given at the 2013 Virginia Credit Union League Fall Compliance Conference. It provides an overview of key fair lending laws and regulations, including the Equal Credit Opportunity Act, Home Mortgage Disclosure Act, and Fair Housing Act. It discusses fair lending examinations and best practices for compliance, such as conducting fair lending risk assessments and maintaining fair lending policies and procedures. The presentation warns that discriminatory lending practices can violate fair lending laws and result in lawsuits and settlements.
CASE 5 The following time line describes the key features of the.docxtidwellveronique
CASE 5 : The following time line describes the key features of the ACA and the year of implementation as provided by the HealthCare.gov website (HealthCare.gov, 2013).
2010 New Consumer Protections
• Putting information for consumers online. The law provides for sites where consumers can compare health insurance cover- age options and pick the coverage that works for them.
• Prohibiting denying coverage of children based on preex- isting conditions. New rules to prevent insurance companies from denying coverage to children under the age of 19 due to a preexisting condition.
• Prohibiting insurance companies from rescinding coverage.
In the past, insurance companies could search for an error, or other technical mistake, on a customer’s application and use this error to deny payment for services when he or she got sick. The health care law makes this illegal.
• Eliminating lifetime limits on insurance coverage. Insurance companies are prohibited from imposing lifetime dollar limits on essential benefits, like hospital stays.
• Regulating annual limits on insurance coverage. Under the law, insurance companies’ use of annual dollar limits on the amount of insurance coverage a patient may receive will be restricted for new plans in the individual market and all group plans. In 2014, the use of annual dollar limits on essential benefits like hospital stays will be banned for new plans in the individual market and all group plans.
USE 2 OTHER SCHOLARLY JOURNALS
1
COUNSELING SESSION SUMMARY NOTES (SOAP Notes)
Counselor: ______________ Session Date: _________________
Time: _______________
Clients(s) Name: ______________________
Session#:
Client Description:
Subjective Complaint:
Objective Findings:
Assessment of Progress:
Plan for Next Session:
Needs for Supervision:GUIDE TO SOAP NOTES
Client Description:
Manner of dress, physical appearance, illnesses, disabilities, energy level, general self-presentation. (Only update after first session)
Subjective Summary:
Presenting problem(s) or issue(s) from the client’s point of view. What the client says about causes, duration, and seriousness of issue(s). If the client has more than one concern, rank them based on client’s perception of their importance.
Objective Finding:Counselor’s observation of the client’s behavior during the session. Verbal and nonverbal, including eye contact, voice tone and volume, body posture. Especially note any changes and when they occur (such as a client who becomes restless in discussing a topic or whose face turns red under certain circumstances). Note discrepancies in behavior.
Assessment of Progress:Counselor’s view of the client, beyond what the client said or did. Continual evaluation of client in terms of emotions, cognitions, and behavior. Identification of themes and pat ...
This document summarizes a presentation on fair lending laws given at a regulatory compliance seminar. It provides an overview of key fair lending laws, examinations, and best practices. The presentation discusses laws like the Equal Credit Opportunity Act and Home Mortgage Disclosure Act, and notes the Consumer Financial Protection Bureau's focus on fair lending compliance. It also outlines prohibited lending practices and provides guidance on developing fair lending policies and procedures to mitigate risks.
This document discusses payday lending and its alternatives. It defines payday loans as short-term loans where a borrower receives cash in exchange for writing a post-dated check or authorizing electronic access to their bank account. The document outlines that most federal consumer credit laws apply to payday lending and notes some unique issues these loans raise. It also discusses the various state laws that regulate payday lending. Finally, the document lists some alternatives to payday loans, including longer-term loans, borrowing from friends or family, pawn shops, and selling possessions.
TILA Disclosures Lost at Sea - Auto-Renewals under TILA and State LawJustin Hosie
This document summarizes key points from a presentation on TILA disclosures and auto-renewals under state and federal law for payday and title loans. The presentation discusses how some lenders try to provide only one initial TILA disclosure rather than new disclosures with each renewal period. However, this approach risks violating TILA if renewals are considered refinancings under the law. The presentation outlines the technical definition of a refinancing and provides examples of regulatory and court decisions addressing this issue. It recommends either providing new TILA disclosures with each period or converting to an installment loan structure to comply with disclosure requirements.
The Nuts and Bolts of Auto Title LendingJustin Hosie
This document provides an overview of auto title lending regulations and practices. It discusses licensing requirements, regulatory oversight at both the federal and state levels, advertising rules, how transactions involve multiple parties, standard transaction terms, issues around cross-border transactions, and procedures for default, repossession and sale. The presentation notes key differences between pawn/pledge transactions and installment loans, and how consumer credit laws apply despite the unique nature of auto title lending. It aims to outline best practices for compliance in this industry.
The CFPB will provide an exit interview after an examination to discuss potential problem areas. Companies then receive a verification of facts memo to confirm the CFPB's understanding before the report. The report details findings and required actions within timeframes. Companies must take the report seriously and develop comprehensive response plans on policies, procedures, training, audits, and staffing to address all issues within deadlines. Failure to adequately respond could lead to further regulatory actions from the CFPB.
Compliant Collections Under the Dodd-Frank ActJustin Hosie
This document provides guidance on compliant collections practices under the Dodd-Frank Act. It discusses key provisions of the FDCPA and how they apply to both third party collectors and original creditors. It outlines best practices for communications with consumers during collection, including identifying yourself, calling times, payment instructions and ceasing calls upon request. It also describes prohibited practices like threats, false statements, and contacting third parties or workplaces without consent. The document notes complex situations and CFPB guidance on issues like call frequency, postdated checks, answering machines and workplace contacts. It summarizes recent CFPB bulletins and supervisory highlights on unfair, deceptive or abusive collection practices.
The CFPB’s Proposed Rule Outline and Preparing for a CFPB ExaminationJustin Hosie
The document summarizes a presentation on the Consumer Financial Protection Bureau's (CFPB) proposed rule outline for regulating short-term and long-term lending, and how to prepare for a CFPB examination. Specifically, it outlines 7 credit option models the rule may implement, including ability-to-repay and safe harbor models for both short and long-term loans. It also discusses which products would be covered or excluded by the rule, and analyzes how each model may interact with or impact existing state laws like those in California. Preparing lenders for the new federal regulatory landscape is a main goal of the presentation.
The panel discussed recent developments in regulations affecting small dollar and military lending. Specifically:
1) The Military Lending Act may be expanded to cover nearly all consumer credit under Regulation Z, including credit cards, student loans, and mortgages. It would limit interest rates to 36% for active duty service members.
2) The CFPB has proposed new rules for small dollar loans through a rulemaking process. It is considering restrictions like limiting loans to affordable amounts and banning repeated refinancing.
3) The rules could significantly impact payday, auto title, and installment lenders by reducing loan volumes by 50-70%. It may also affect banks, credit unions, and the availability of emergency credit
Hackett Hosie Sims Dana Evans - HudCo Conference 2015 PPT
CFPB Small Dollar Lending Exam Procedures Module 2 ECOA, FCRA, TILA and Other Risks
1. CFPB Exam Procedures for Short-Term, Small-Dollar Lending
Module 2 Provisions Addressing: ECOA, FCRA, TILA and
Other Risks
October 6, 2012
Justin Hosie
Hudson Cook, LLP
2. Introduction
• Coverage. Module 2 covers:
Taking applications
Evaluating applicants
Originating payday loans
• Federal Laws. Examiners will seek to identify acts, practices, or materials
that violate the following federal requirements:
Equal Credit Opportunity Act/Regulation B
Fair Credit Reporting Act
Truth In Lending Act/Regulation Z
Electronic Fund Transfer Act/Regulation E (addressed by Chuck with Module 3)
• 7 Other Risks. Examiners will also seek to address 7 other risks to
consumers in this module
3. Overview of CFPB Examinations
• The Playbook is Published. Agency has published it’s small dollar lending
examination manual, outlining expectations.
• “Mostly” Enforcing Regulations You’ve Known About. Primarily
addresses longstanding requirements that have always applied. There are
some new concepts.
• Learning Curve Exists on Both Sides. There is a new level of scrutiny
and a learning curve.
Learning about federal regulatory processes
Similarities exist for those who made loans under an FDIC bank model years ago
Industry members have been examined, and some are undergoing examination now
The CFPB is learning about the industry too.
• Policies Alone Are Not Enough – You Need Training and Auditing Too.
4. Equal Credit Opportunity Act and
Regulation B (ECOA)
• Examiners will assess compliance with
requirements for:
taking applications
evaluating customer qualifications
extending credit
providing disclosures (i.e. adverse action)
and denying credit
5. ECOA – Don’t Discriminate
Don’t treat consumers less favorably, in any
part of the process, based on:
Race, Color,
Religion, National
origin, Sex
Marital status
Age (provided the
applicant has the
capacity to contract)
Public assistance
income
The applicant has in
good faith
exercised any
right under the
Consumer Credit
Protection Act
6. ECOA – Taking Applications
• Don’t Discourage Applications. The
Company should not make any oral or
written statement, in advertising or
otherwise, to applicants or prospective
applicants that would discourage on a
prohibited basis a reasonable person
from making or pursuing an application.
7. ECOA – Taking Applications
• Use a Model Application Like a Regulation B Model.
5 models based on transaction type.
• Important Notices:
Optional nature of courtesy titles (“Mr.,” Ms.,” &
“Mrs.” are optional).
Option to disclose alimony, child support, or
separate maintenance income
Limitation concerning marital status inquiries must
be included in the appropriate places.
8. ECOA – Taking Applications
• Don’t Force Non-Applicant to Enter Credit
Agreement. You should not force a non-applicant to
obtain credit, for example, just because of marital
status. Rather, if only one consumer applies, a spouse
should not be forced to apply.
• So, if the spouse is not an applicant, don’t force them to
sign the contract.
9. ECOA – Evaluating Customer
Qualifications
• Consider anything, except:
information used to discriminate on a
prohibited basis
Note the following list of special
considerations
10. ECOA – Evaluating Customer
Qualifications
• Special Considerations – Don’t Discriminate Based on:
Having Children. Don’t make assumptions
or use aggregate statistics relating to the
likelihood that any category of persons will
bear or rear children or will, for that reason,
receive diminished or interrupted income in
the future.
11. • Special Considerations – Don’t Discriminate Based on:
Unlisted Phone Numbers. Don’t consider
whether there is a telephone listing in the
name of an applicant for consumer credit.
You can consider whether there is a
telephone in the applicant's residence.
ECOA – Evaluating Customer
Qualifications
12. • Special Considerations – Don’t Discriminate Based on:
Part Time Income, etc. Don’t discount or
exclude income because it’s from part-time
employment or is an annuity, pension, or
other retirement benefit.
You can consider the amount and
probable continuance of any income.
ECOA – Evaluating Customer
Qualifications
13. • Special Considerations – Don’t Discriminate Based on:
Alimony, etc. Don’t discount or exclude
income because it’s from alimony, child
support, or separate maintenance payments.
If the customer decides to share the amount,
the amount is income.
You can consider whether those amounts
are likely to be consistently made.
ECOA – Evaluating Customer
Qualifications
14. ECOA – Evaluating Customer
Qualifications
• Other Special Rules:
You may consider Immigration Status.
Lenders may consider an applicant's
immigration status or status as a permanent
US resident of the United States.
You can also consider any additional information
that may be necessary to ascertain the creditor's
rights and remedies regarding repayment.
15. ECOA – Evaluating Customer
Qualifications
• Other Special Rules:
Treat Married / Unmarried the Same.
Evaluate married and unmarried applicants by the same standards
Don’t Treat Joint Applicants Different based on Marital
Status.
For joint applicants, don’t treat applicants differently based on the
existence, absence, or likelihood of a marital relationship between
the parties
If I apply with Grandma, a roommate, or my wife, all pairings
should be evaluated in the same way.
16. ECOA – Extending Credit
• Don’t Discriminate on a Prohibited Basis.
• Only Applicants Should Sign the
Contract. Don’t require the a spouse or
other person to sign the contract with a
qualified applicant, unless the person is a
joint applicant.
Submitting joint financial information/assets,
is not an application for joint credit.
17. ECOA – Extending Credit
• Unique Rule: Pick a Name
Customer Can Choose to Use Their Birth-Given
Surname, Married Name, or Combined Name.
Don’t refuse to allow an applicant to open or maintain an account
in a birth-given first name and a surname that is the applicant's
birth-given surname, the spouse's surname, or a combined
surname.
CFPB Regulation B § 1002.7(b)
18. ECOA – Denying Credit
• Provide Model Denial Notices within 30 Days. You
must notify applicants of action taken on their
applications, such as a denial, in a proscribed format
within 30 days of receipt of a complete or incomplete
application, and document the reason for the action.
• Give a Conspicuous Copy to the Consumer. ECOA
disclosures must be provided in a clear and conspicuous
manner and generally in a form the applicant may retain.
19. What is adverse action?
• Refusal to grant credit in terms requested
in an application (barring an accepted
counteroffer)
• Terminating or unfavorably changing terms
• Refusing to increase credit available
after an application for an increase
20. ECOA – Disclosures (Adverse Action)
• Use the Model Form. Use the regulatory
template and note your reasons on the
notice or internally. Must include:
statement of the action taken
name and address of the creditor
nondiscrimination statement
Federal agency information
Specific denial reasons or the right to request
denial reasons
21. ECOA – Disclosures (Adverse Action)
• Incomplete Application
Use the specific model form. If the denial
is due to an incomplete application use
special model notice of missing info and
timeframe.
22. ECOA – Disclosures (Adverse Action
• Denial reasons must:
be specific
indicate the principal reason(s) for the
adverse action.
23. ECOA – Final Notes
• Have Clear Policies and Employee Scripts.
Fair Lending, Non-discrimination, Credit Criteria, Sending denial
notices, Responding to inquiries
• Keep Records.
Required for 25 Months from date you notify consumer of application
status (incomplete, denial, or loan approval).
• Consider Self-Testing Regarding Unintended Practices
that Yield Discriminatory Results.
Discrimination is measured by the effects of the policies in place, not
the intent (disparate treatment and impact)
Companies should hire qualified parties to conduct self-testing to
determine whether policies are discriminatory.
24. Fair Credit Reporting Act
• Permissible Purpose. Only use info from third
party databases for permissible purposes
(application or as authorized)
• Accurate Furnishing. Only furnish accurate info
to third party databases
25. Fair Credit Reporting Act
• Probably Using Consumer Reports.
3rd party data providers may be FCRA consumer
reporting agencies
FCRA applies when you use a consumer
reporting agency to determine creditworthiness
26. FCRA – Loan Denial
• If you used a consumer reporting agency
or third party source as part of your denial,
notify the consumer of:
Contact information
Right to a copy
• Use the model FCRA notices provided by
the agencies in Regulation B
27. FCRA – Key Policies
• Have, Use, and Update the Following Policies:
Dispute Policy. Be Prepared to Respond to Consumer Disputes Regarding
Information the Company Reports to Credit Bureaus.
Red Flags Policy. Be Prepared for Address Discrepancies and Identity Theft.
Information Disposal Policy. Be Prepared to Properly Dispose of Sensitive
Consumer Information.
• These policies are explicitly required under the FCRA and it’s
implementing regulations.
28. FCRA – Other Considerations
• Negative Reporting Notice.
• Truncate Card Numbers.
• Investigate Alerts. Don’t Just Deny Consumers.
• Ignore Medical Info. Don’t Obtain, Use, or Share Consumer
Medical Information.
• Read and Follow the Stuff from Consumer Reporting Agencies.
Follow the Rights and Responsibilities Notice You Receive from the
Consumer Reporting Agencies.
29. FCRA – Higher APRs
• If you have a higher APR due to info
from a third party – give a special “risk
based pricing” notice.
• Most payday companies have fixed
fees, and APR variance is based on
transaction durations not consumer
reports.
30. Truth in Lending Act / Regulation Z
• Disclose loan terms and Annual
Percentage Rates
• Credit payments properly
• Process credit balances in accordance
with its requirements
31. Truth In Lending Act / Regulation Z
• Examiner Focus:
Are loans closed-end or open-end?
Are appropriate disclosures (closed vs.
open-end credit) provided?
Whether disclosures comply?
Do loans conform to the lender’s
representations?
Is “refinancing” properly disclosed?
32. Truth In Lending Act / Regulation Z
• Respond to Oral Questions on Cost, by Quoting the
“APR.” In an oral response to a consumer's inquiry
about the cost of credit, respond by stating the annual
percentage rate. If the annual percentage rate cannot be
determined in advance, the annual percentage rate for a
sample transaction shall be stated, and other cost
information for the consumer's specific transaction may
be given.
33. Truth In Lending Act / Regulation Z
• Provide Accurate TILA
Disclosures. Provide model TILA
disclosure for simple interest transactions,
as appropriate, with correct calculations, in
a form that the consumer may keep,
before the consumer becomes
contractually obligated on the obligation
(“consummation”).
34. Truth In Lending Act / Regulation Z
• Here is a copy of the model form for credit
transactions:
http://ecfr.gpoaccess.gov/graphics/pdfs/ec
27se91.024.pdf
• Here is a copy of the model itemization to
include below the disclosures:
http://ecfr.gpoaccess.gov/graphics/pdfs/ec
27se91.025.pdf
35. Truth In Lending Act / Regulation Z
• Make the APR and Finance Charge More
Conspicuous than Other Disclosures.
• The terms “finance charge” and “annual percentage rate,”
together with a corresponding amount or percentage rate, must
be more conspicuous than any other disclosure, except the
Company’s identity.
• Get the math right on these. It isn’t easy, but
resources exist to help you
36. Truth In Lending Act / Regulation Z
• TILA Math
Here is a copy of the calculation rules for your programmers to
implement in determining the Annual Percentage
Rate: http://ecfr.gpoaccess.gov/cgi/t/text/text-
idx?c=ecfr&sid=06c1202917450b3643462228d4aba3a1&rgn=
div5&view=text&node=12:3.0.1.1.7&idno=12#12:3.0.1.1.7.7.8.1
0.26
Federal APR Calculator: http://occ.gov/tools-
forms/tools/compliance-bsa/aprwin-software.html
37. Truth In Lending Act / Regulation Z
• Regularly Check for Errors. Maintain procedures to
regularly and promptly detect, and correct errors such as
clerical errors, calculation errors, computer malfunctions,
programming errors, and printing errors.
• 60 Days to Correct. If you detect any TILA error
immediately consult with counsel, and send correction
notices within 60 days of detection.
38. Truth In Lending Act / Regulation Z
• What is a refinancing?
One obligation substitutes and replaces
another.
Distinguished from extensions, deferrals, and
renewal of a single payment obligation on
the same terms.
A few important cases distinguish these.
Make sure your processes for successive
transactions are clear
39. Truth In Lending Act / Regulation Z
• Two Final Notes:
If You Make Disclosures in Non-English
Languages, Make them Available in English
too.
Keep all TILA records for at least 2 years.
41. 7 Other Risks to Consumers - #1
• Don’t Mislead Cost, Value, Availability,
Cost Savings, Benefits, or Terms.
No explicit regulations address this yet
Ultimately may require disclosure on
likelihood and cost of rollovers
If state law allows 4 rollovers – should a
disclosure address the cost over 4 transactions?
APR does annualize the cost
See Texas model
43. 7 Other Risks to Consumers - #2
• Disclose “Useable” Credit.
• Do you accurately and non-deceptively
represent the amount of potential,
approved, or useable credit the consumer
will receive?
Make sure the consumer knows the amount
they will walk away with
44. 7 Other Risks to Consumers - #3
• Disclose Fees to Get Proceeds. Do you
disclose the fees to get the proceeds?
Proceeds by Check – Is the Cost
Disclosed?
Prepaid Card Proceeds – Do you Disclose
ATM Access Fee?
45. 7 Other Risks to Consumers - #4
• Optional/Additional Products. Do you:
Clearly and prominently disclose material
terms including costs?
Receive and document express authorization
before adding optional products or services?
Provide and document authorizations?
• Review how option is authorized.
46. 7 Other Risks to Consumers - #5
• Disclose Repayment & Collection
Practices.
• Do you disclose repayment and collection
practices?
No explicit rule yet for this requirement
Make sure ACH/Check policies
Consider explaining collection policies
47. 7 Other Risks to Consumers - #6
• Disclose Repayment Rights.
• Do you clearly and prominently disclose
rights regarding payment methods?
No explicit regulation yet
Make sure the consumer knows when you
may begin the process to deposit the check
or submit the ACH
48. 7 Other Risks to Consumers - #7
• Other Laws Apply.
Military Lending Act and Servicemembers
Civil Relief Act
TCPA - Robocalling and text message
requirements
• CFPB may refer matters to other state and
federal agencies
51. CFPB Exam Procedures for Short-Term, Small-Dollar Lending
Module 3: Payment Processing and Sustained Use
October 6, 2012
Chuck Washburn
Manatt, Phelps & Phillips, LLP
52. Introduction
• Module 3 of the CFPB's examination procedures for short-term, small-dollar
lending (“payday lending”) covers the period in the lifecycle of a payday loan
after origination and before collection following default.
• Accordingly, Module 3 focuses on repayment, including rollovers and other
transactions in lieu of repayment.
• Although not as intensively regulated as origination and collection, this
period in a payday loan's lifecycle is subject to important rules.
• Which rules apply will depend upon the features of a particular payday loan,
including whether it is revolving credit, repaid electronically and/or repaid in
a series of payments.
53. Overview of CFPB Examinations
• Being closely examined for compliance with federal consumer financial laws
will be a new experience for most FiSCA members.
• Unlike state agencies and federal banking agencies, CFPB is singularly
focused on consumer protection.
• In addition to traditional UDAP standards, CFPB will be applying an
"abusive" test.
• CFPB is a new agency, and as such it is developing innovative examination
procedures and techniques, taking into account what has worked in the past
and what hasn't.
• Prior to the creation of the CFPB, federal consumer financial laws were
interpreted by several agencies. Now, the CFPB is solely responsible for
interpreting most of these laws.
54. Regulation Z – Open-End Credit vs. Closed-End Credit
• Different Regulation Z requirements apply to "open-end credit" and "closed-
end credit".
• Open-end credit generally is revolving credit, where the creditor expects
repeated transactions, an interest rate is applied to the outstanding balance,
and the consumer can repay and re-borrow up to a credit limit.
• Closed-end credit is everything else.
• Payday loans historically have qualified as closed-end credit.
• The closed-end credit rules of Regulation Z focus on disclosures made prior
to consummation (which were covered in the discussion of Module 2), and
generally do not require post-consummation disclosures, except in the case
of a “refinancing.”
55. Refinancing
• A “refinancing” for Regulation Z purposes occurs when a borrower’s
obligation is satisfied and replaced by a new obligation. The new obligation
completely replaces the prior one.
• A refinancing is treated as a new transaction and requires a new set of
Regulation Z disclosures.
• A modification that does not replace the existing obligation is not a
refinancing.
• Also, a new obligation that is only a renewal of the prior obligation with no
change in terms is not a refinancing.
• When in doubt, disclose!
56. Regulation Z – Open-End Credit
• Some payday lenders structure their products as open-end credit.
• Open-end credit requires some disclosures prior to consummation, but the
focus instead is on post-consummation disclosures:
A billing statement generally must be sent for each billing cycle. The regulation
includes detailed specifications for the format and content of billing statements
(monthly credit card statements reflect many of these requirements).
Certain changes in terms (to the extent permitted by the loan agreement) are
subject to notice requirements, including with respect to how much advance
notice must be given.
• Open-end credit rules require that payments usually be credited as of the
date of receipt, and also govern what requirements a creditor can specify for
making payments (such as reasonable cut-off times).
57. Billing Errors
• Regulation Z provides for billing error procedures in connection with open-
end credit.
• Billing errors include items on a billing statement that the borrower
challenges for various reasons, including transactions with respect to which
the borrower requests additional information, such as documentary
evidence.
• If a borrower submits a proper billing error notice, the lender has to resolve
the error within certain time frames.
• While this is going on, the borrower is not required to pay and the lender
cannot attempt to collect any amount that is disputed.
58. Electronic Fund Transfers - Introduction
• Payday loans are repaid by the borrower giving the lender a right to access
the borrower’s deposit account with a financial institution.
• Historically, a borrower would give a payday lender a paper check drawn on
the borrower’s account to deposit on the repayment date.
• In online payday lending, borrowers instead typically authorize the lender to
initiate an electronic fund transfer (an “EFT”) from the borrower’s deposit
account to repay the loan. Brick and mortar payday lenders also are
frequently repaid by EFTs.
• Also, payday loans may be funded in cash or by paper check.
• Today it is increasingly common to fund payday loans by an EFT to the
borrower’s deposit account or by issuance of a prepaid card.
59. EFTA and Regulation E
• The Electronic Fund Transfer Act ("EFTA") regulates EFTs from and to
consumer “accounts.”
• EFTA is implemented by Regulation E.
• The CFPB is now charged with interpreting most of EFTA, including through
Regulation E and the Official Staff Commentary thereto.
The FRB retains authority to issue regulations relating to debit interchange.
60. EFTs vs. Paper Checks
• Regulation E only applies to EFTs.
• So payment of a payday loan by paper check is outside of Regulation E.
• A remotely created check (“RCC”) in paper form and deposited in paper
form also is outside of Regulation E.
• But an EFT initiated using information from a paper check is covered by
Regulation E.
• An EFT to collect a returned item fee on a returned paper check likewise is
subject to Regulation E.
61. Authorization of EFTs
• In remarks at the payday loan field hearing in Birmingham in January 2012,
CFPB Director Richard Cordray said that the CFPB will act immediately to
eliminate illegal practices in connection with payday loans, and the first
example he gave was “unauthorized debits on a person’s checking
account.”
• An “unauthorized” EFT is defined as one that is initiated by a person other
than the consumer without “actual” authority and from which the consumer
receives no benefit.
62. Authorization – One-Time EFTs
• Regulation E does not include extensive authorization requirements for one-
time EFT transactions.
• Regulation E billing error procedures apply among other things to any
unauthorized EFT.
• EFTs using a paper check as a source of information for a one-time EFT
must be authorized by the consumer. Authorization includes disclosing to
the consumer that the paper check will be converted to an EFT and the
consumer then “goes forward” with the transaction.
An appendix to Regulation E includes model language for this disclosure.
• A similar authorization rule applies for collecting returned item fees by EFT,
including required disclosure of the amount of the fee.
Again, model language is provided in an appendix.
63. Recurring EFTs
• A preauthorized EFT is an EFT that is “authorized in advance to recur in
substantially regular intervals.” So there would need to be a minimum of
three EFTs in order for them to recur at regular intervals.
• Preauthorized EFTs can be involved in connection with:
A series of rollovers or other renewals.
Repayment plans involving installment payments.
A payday loan structured as open-end credit.
• Regulation E imposes significant restrictions on preauthorized EFTs.
64. Recurring EFTs – Compulsory Use
• A creditor may not condition an extension of credit on repayment by
preauthorized EFTs.
But the Regulation E Commentary provides that a creditor can encourage the
borrower to agree to repay by preauthorized EFTs by offering a discount or
other cost-related incentive.
A creditor can also avoid the prohibition by offering other repayment options.
65. Recurring EFTs - Authorization
• Preauthorized EFTs may be authorized “only by a writing signed or similarly
authenticated by the consumer.”
• An “electronic record” and “electronic signature” under the ESIGN Act can
satisfy these requirements.
“Similarly authenticate” means an electronic signature must authenticate the
borrower similarly to a manual signature.
• These requirements can be satisfied in a transaction conducted over the
Internet.
• What about a recorded telephone conversation?
66. Recurring EFTs – Authorization (Continued)
• The Commentary provides that the authorization must be “readily
identifiable as such” and the terms of the authorization must be “clear and
readily understandable.”
• The consumer must be provided with a copy of the authorization.
• A consumer may place a stop payment with his or her bank on a
preauthorized EFT at least 3 business days before the scheduled date of
the transfer.
• If the amount of preauthorized EFTs may vary, written notice of each varying
amount must be provided at least 10 days before the scheduled date of the
transfer.
The consumer can agree that he or she will only receive notice if the varying
amount is outside of a specified range.
67. SAFE Lending Act of 2012
• The Stopping Abuse and Fraud in Electronic Lending Act of 2012 has been
introduced in Congress. Its chances of passage will be impacted by the
upcoming elections.
• Among other provisions that impact payday lending, the SAFE Lending Act
as proposed includes the following provisions relating to repayment:
It would amend EFTA to prohibit RCCs (including paper RCCs) except with the
specific, written authorization of the borrower to his or her bank, which
authorization can be revoked at any time.
The current EFTA prohibition against conditioning an extension of credit on
repayment by preauthorized EFTs would be amended to apply to repayment by
any EFT.
If a consumer agrees to repay a payday loan by an EFT, that EFT would be
treated as a preauthorized EFT for purposes of the EFTA.
68. NACHA Rules
• Repayment of payday loans by EFTs processed through the automated
clearinghouse (“ACH”) network are subject to the NACHA rules.
• Unlike Regulation E, the NACHA rules require written authorization of one-
time ACH transfers from a consumer’s account, subject to alternative
authorization requirements for certain types of transactions, including:
One-time or recurring ACH transfers authorized over the Internet (WEB entries)
are subject to requirements similar to preauthorized EFTs under Regulation E.
One-time ACH transfers may be authorized over the telephone (TEL entries)
but must include several items of information, and must be recorded or prior
written disclosure must be given. Recurring TEL entries are subject to similar
requirements (including recording) and must comply with Regulation E
(including providing a copy of the authorization).
69. NACHA Rules (Continued)
• The NACHA rules require that authorizations include a right to revoke.
This includes one-time ACH transfers scheduled in advance.
• TEL entries require express consent. “Silence is not express consent.”
• Key-entry responses do not qualify as “oral” authorizations for TEL entry
purposes.
• NACHA rules are “private law.”
70. Payment Card Network Rules
• Repayment of payday loans by debits to debit cards or charges to credit
cards are subject to the rules of the applicable payment card network (for
example, Visa or MasterCard).
• Requirements under the payment card network rules for recurring payment
card transactions are similar to Regulation E requirements for preauthorized
EFTs, but apply to credit cards as well as debit cards.
• These rules likewise are private law.
• Keep in mind that debit card transactions involve EFTs so Regulation E also
applies.
71. Prepaid Cards
• Some payday lenders may fund payday loans through the issuance of
prepaid cards.
• Per prior FRB guidance, prepaid cards are not deemed to be “accounts” for
Regulation E purposes and therefore are not subject to most Regulation E
requirements.
• Also, Regulation E was amended to implement provisions of the Credit
CARD Act regulating “general-use prepaid cards” and other products, but
the rules only apply to such cards that are marketed or labeled as gifts.
• However, the CFPB in May 2012 issued an advance notice of proposed
rulemaking indicating that the CFPB intends to extend Regulation E
protections to general purpose reloadable (“GPR”) prepaid cards, and
requested information about GPR cards.
72. Fair Credit Reporting Act – Furnisher Duties
• Historically, payday lenders have not used traditional consumer reporting
agencies (“CRAs”), such as Equifax, Experian and TransUnion.
• However, the use by payday lenders of non-traditional CRAs, including
those scoring consumers based on utility payments and social media data,
is increasing.
• In order to obtain scores and other consumer reports, a user must often
agree to furnish information to the CRA.
• The Fair Credit Reporting Act (“FCRA”) and CFPB regulations require
furnishers to:
Adopt and implement policies and procedures regarding the accuracy and
integrity of information furnished to CRAs.
Investigate “direct disputes” received from consumers in accordance with
certain timing and other requirements.
73. Sustained Use
• “Sustained use” means repeated use of payday loans over a significant
period of time. It includes rollovers, “back-to-back” transactions, and repeat
transactions after brief “cooling off” periods.
• In his remarks at the Birmingham payday loan field hearing, Director
Cordray said that a particular focus of the CFPB would be “repeated long-
term use of payday loans,” and that the CFPB plans “to dig deep on this
topic.”
• Sustained use is discussed in great detail in Module 3 of the CFPB exam
procedures, confirming CFPB concerns with the practice.
• Consumer groups submitting comments to the CFPB on payday lending
often focus on sustained use.
74. Sustained Use - Regulation
• State payday laws, Department of Defense regulations and FDIC
guidelines, among other rules, address sustained use in various ways.
• But federal laws like Regulations E and Z currently do not expressly
regulate sustained use.
• Instead, the CFPB appears to be raising a potential UDAAP concern
regarding sustained use, including whether a payday lender’s program,
depending on the facts, may be “deceptive” or possibly “abusive.”
75. Sustained Use - UDAAP
• "Unfair"
Causes or likely to cause substantial injury that is not reasonably avoidable
and not outweighed by countervailing benefits.
• "Deceptive"
Misleads or is likely to mislead, the consumer's interpretation is reasonable,
and the representation, omission, act or practice is material.
• "Abusive"
Materially interferes with consumer's ability to understand, or
Takes unreasonable advantage of
The consumer's lack of understanding,
Inability of the consumer to protect his or her interests, or
Reasonable reliance by the consumer on the covered person.
76. Sustained Use – Examination
• Based on the CFPB exam procedures regarding sustained use, a payday
lender should do the following, including to reduce potential UDAAP issues:
Adopt appropriate written policies and procedures regarding sustained use.
Once adopted, the lender should follow the policies.
This includes monitoring third party call centers and other vendors for compliance with
the lender’s policies.
Accurately and fully disclose the terms of rollover, back-to-back and similar
options. Failure to do so may be deemed to be a “deceptive” act or practice.
All available repayment options should be disclosed.
The most critical disclosures are those relating to the fees and other costs of each
option.
If the transaction constitutes a “refinancing” of a closed-end credit transaction, ensure
that new Regulation Z disclosures are delivered.
77. Sustained Use – Examination (Continued)
Consider, when making a loan in the first place, assessing the borrower’s
income or other financial information in order to determine whether the
borrower has the ability to repay, or instead is likely to need a rollover or similar
modification.
Precedent for this concept may be found in Regulation Z provisions implementing the
Credit CARD Act that impose “ability to pay” obligations on credit card issuers.
Consider specific limits on usage (i.e., limiting the number of transactions over
a specified time period) in addition to limits imposed by state or other law.
Consider monitoring on an ongoing basis for possible overuse by individual
borrowers, and reach out to such borrowers.
Offer alternatives, including installment payment plans.