Mortgage Banking Update - May 10, 2018
Neither PHH Corporation nor the CFPB has filed a petition for certiorari asking the U.S. Supreme Court to review the D.C. Circuit's en banc PHH decision. The filing deadline was May 1.
In that decision, issued on January 31, the D.C. Circuit ruled in favor of PHH on its challenge to the CFPB's RESPA interpretation but rejected PHH's challenge to the CFPB's constitutionality based on its structure of a single director removable only for cause.
While the parties' decisions not to seek certiorari means the PHH case will not be the vehicle for a Supreme Court ruling on the CFPB's constitutionality, other pending cases could provide that vehicle. One is CFPB v. All American Check Cashing, in which the Fifth Circuit recently agreed to hear an interlocutory appeal challenging the CFPB's constitutionality.
As we reported previously, the CFPB recently adopted a long-awaited amendment to the TILA/RESPA Integrated Disclosure (TRID) rule that fixes the so-called black hole issue.
The amendment was published in the May 2, 2018, Federal Register and will become effective on June 1, 2018. The CFPB notes in supplementary information to the amendment that "[o]nce the final rule becomes effective, the ability to reset tolerances prior to consummation for a given transaction will not be limited by when the application was received." Thus, as of June 1, 2018, the flexibility created by the amendment regarding the use of a Closing Disclosure to reset tolerances will be available for both loan applications that are in process at the time and loan applications made on and after such date. However, the CFPB also made clear that the amendment may not be applied retroactively.
The CFPB has published a notice in the Federal Register announcing two public subcommittee meetings of its Consumer Advisory Board that will take place by conference call.
The Mortgages and Small Business Lending subcommittee meeting will take place on May 10, 2018, from approximately 1 p.m. to 2 p.m. ET. The Card, Payment, and Deposits Markets subcommittee meeting will take place on May 22, 2018, from approximately 3 p.m. to 4:30 p.m. ET. The meetings are open to the public. Members of the public will receive the agenda and dial-in information when they RSVP using the instructions provided in the notice.
The Mortgages and Small Business Lending Markets subcommittee will discuss two of the CFPB's recent RFIs. The Card, Payment, and Deposits Markets subcommittee will discuss "lessons learned on designing financial products and features to meet the needs of specific targeted vulnerable populations" and one of the RFIs. The notice does not specify which of the RFIs will be discussed by either subcommittee.
We are pleased to announce that Ballard Spahr's Consumer Financial Services Group has once again been ranked in the highest tier nationally in the category of Financial Services Regulation: Consumer Finance (Compliance and Litigation) by Chambers USA: America's Leading Lawyers for Business.
Our CFS Group is one of only three practices in the country to be ranked this high. We have been ranked in Band One every year since Chambers USA introduced a national category for consumer finance. The rankings are largely based on client feedback and peer review.
The Chambers USA report released last week praised the CFS Group's skill in supporting clients at both the state and federal regulatory levels. According to the report, the Group is well-known for its work with credit cards, mortgage, auto and student finance, and CFPB regulation and enforcement. Chambers USA also singled out the Group for excellence in the areas of Fintech, e-commerce, alternative lending, and product development.
The 2018 edition quotes our clients, who have said that the Group's attorneys are "at the top of their game," adding that "they can anticipate laws and regulations in a way that is second to none." Our clients have also praised us for providing "high-quality legal support and good practical guidance" and for being "deeply loyal and very client-focused."
Chambers USA also recognized six CFS Group lawyers for individual excellence: Alan Kaplinsky, Chris Willis, Rich Andreano, John Culhane, Mark Furletti, and Jeremy Rosenblum. Group co-Leader Alan Kaplinsky, who is individually ranked in Band One, was called "one of the top five practitioners in the field." Chris Willis, leader of the Group's litigation team and also individually ranked in Band One, was described as having "more raw intelligence than any other lawyer in our field."
We are proud of the work we do, and also grateful to our clients for entrusting us to help them develop new products, defend them in litigation and against enforcement actions, and assist them in navigating the increasingly complex array of federal and state regulations
Effective August 1, 2018, the Minnesota Department of Commerce will adopt the National State MLO Test with Uniform State Content. Mortgage loan originator license applicants will no longer be required to take and pass a Minnesota-specific test component. With Minnesota's adoption of the Uniform State Test, 59 state agencies—encompassing all 50 states, the District of Columbia, Puerto Rico, Guam, and the U.S. Virgin Islands—will not require mortgage loan originator license applicants to pass both the national test and a state-specific test, although a number of jurisdictions still require license applicants to satisfy state specific education.- John D. Socknat
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