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<< Return
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Keeping Watch (NEW) - Wednesday, August 08, 2007
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However, they will be back. So in that vein you may want to keep eyes and ears on some of the issues that the Senate and House of Representatives' various committees and sub-committees have promised to address on their return. Also expect the issuance of some final rules/regs from the regulatory banking agencies. What are some these issues? Below you will find a short list of those items that have most recently been thrown about by our elected officials and the banking agencies. I offer these for your consideration:
- Basel II implementation (expect some final rules soon).
- Truth in Lending (Reg. Z, including HOEPA, as well as credit card practices vs. consumer protections).
- Equal Credit Opportunity (Reg. B, Rep. Frank and the Federal Reserve are at odds on this issue).
- Home Mortgage Disclosure Act (Reg. C, fields of information compiled on the Loan Application Register, one suggestion is to include underwriting criteria, such as borrower's credit rating/score, to give a fuller picture).
- Unfair and Deceptive Acts or Practices (UDAP), taking away the Federal Reserve's authority and giving that authority to another agency or agencies.
- Bank Secrecy Act and AntiMoney Laundering (CTRs and SARs), eliminating outdated reporting obligations and fine tune the SAR process through legislation, such as the Seasoned Customer Exemption Act.
That seems to be a very extensive list of items and quite enough to be getting on with, but I expect there will be more. I don't believe Congress is finished with the subjects of Nontraditional Mortgage Products and Predatory Lending yet. Home mortgage foreclosures are at an alltime high. Members of the House Financial Services Committee have introduced a bill that would place many more restrictions on mortgages than current law provides. Specifically:
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A national registration and licensing standard would be required for all mortgage lenders.
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Mandatory counseling would be required on some loans.
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Establish a "suitability" standard for evaluation of mortgage borrowers.
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Appraisal requirements would be strengthened.
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Prepayment peanlties would be prohibited on hybrid ARMs.
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All subprime mortgages would be required to have escrow accounts for taxes and insurance.
Also from members of the House Financial Services Committee, including the chairman, have introduced legislation on overdraft products that would:
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Require the disclosure of fees in real time on an ATM machine;
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Require the banks to obtain customer permission before charging overdraft fees; and
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Include debit card transactions.
I know I said it would be a short list, but as I wrote this article the list seemed to grow and grow and grow. So as I close I will throw in two more items that recently caught my attention:
- Reg. E, Electronic Transfer Disclosure Act (debit card liability limitations, there is some thought that these are not as consumer friendly as the credit card liability limitations).
- Reg. CC, Availability of Funds and Collection of Checks (some in Congress believe this needs to be updated in light of Check 21, because of faster check clearing processes customers should have quicker access to their funds).
That's all folks for now.
Patricia Grammer, CRCM, PL
Compliance Officer
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