Legislative &
Regulatory Updates
Tuesday, July 21, 2015
SESSION SPEAKERS
Amanda V. Green, Esq.
Vice President of Operations
& Compliance
Shapiro Kreisman & Associates, LLC
avgreen@logs.com
Eric Rosenkoetter
Director of Government Affairs
National Association of Retail
Collection Attorneys (NARCA)
eric@narca.org
Kristina G. Murtha, Esq.
Managing Attorney, New Jersey
Kivitz McKeever Lee, PC
KMurtha@KMLLawGroup.com
Matt Hunoval, Esq.
Founder
The Hunoval Law Firm, LLC
matt@hunovallaw.com
Questions for the Panelists?
You can submit them by:
• Texting 66364 and your question to 22333
• Ask questions or make comments verbally by using the
microphones provided in the session room
CFPB DEBT COLLECTION
RULEMAKING
• ANPR – November 2013
1. Data integrity upon sale or placement of debts
2. Validation notices, disputes, investigations, and
verification of disputes
3. Collector communications with consumers
4. Unfair, deceptive, and abusive acts and practices
5. Collection of debts that are beyond the SOL
6. Debt collection litigation
• Timing of NPR – 2016?
Questions for the Panelists? Text 66364 and your question to 22333
NEXT STEP: SBREFA* PANEL
• Panel consists of three representatives from:
– CFPB
– Office of Management and Budget
– Small Business Administration Office of Advocacy
• CFPB & SBA will select 20 – 25 Small Entity
Representatives (SERs) with whom to meet
• SERs must be from “small businesses”
• Geographic and business/practice diversity
sought
*Small Business Regulatory Enforcement Fairness Act
Questions for the Panelists? Text 66364 and your question to 22333
“SMALL BUSINESSES”
• “Offices of lawyers” (NAICS Code 541110) are
defined as small businesses if receipts are $11
million or less.
Receipts are defined, in part, as “’total income’ (or in the case of a sole
proprietorship, ‘gross income’) plus ‘cost of goods sold’ as these terms are
defined and reported on Internal Revenue Service (IRS) tax return forms
(such as Form 1120 for corporations; Form 1120S and Schedule K for S
corporations; Form 1120, Form 1065 or Form 1040 for LLCs; Form 1065 and
Schedule K for partnerships; Form 1040, Schedule F for farms; Form 1040,
Schedule C for other sole proprietorships)…” (Review the full definition at
http://www.gpo.gov/fdsys/pkg/CFR-2015-title13-vol1/xml/CFR-2015-title13vol1-sec121-104.xml)
Questions for the Panelists? Text 66364 and your question to 22333
SBREFA PANEL PROCESS
• Description of some (not all) proposals will be released
to the SERs and public.
• Panel meets with SERs and seeks feedback on the
potential economic impacts of complying with the
proposals:
– Other federal regulations that may overlap, duplicate, or
conflict with the proposed rule
– Anticipated compliance costs of the proposed rule
– Alternatives that could minimize any significant economic
impacts of the proposed rule
• Timing:
– 60 days from meeting to final report
– 2 weeks from meeting for written comments from SERs
Questions for the Panelists? Text 66364 and your question to 22333
SBREFA PANEL
CONSIDERATIONS
• Provides an early look at the proposals
under consideration
• Opportunity for companies, small and large,
to develop and present metrics (usually
through their respective trade associations)
• Coordination of SERs on main themes is
valuable prior to the meeting
• Metrics are essential, and the sooner the
better
Questions for the Panelists? Text 66364 and your question to 22333
LEGISLATION – SMALL BUSINESS
• H.R. 1195: Bureau of Consumer Financial Protection
Advisory Boards Act - Pittenger (R-NC) Directs CFPB to
establish a Small Business Advisory Board to: (1) advise
and consult with the CFPB in the exercise of its
regulatory functions; (2) provide information on evolving
small business practices. Referred to Senate.
• Sen. Vitter July 11th letter to GAO:
– Were the materials distributed adequate?
– Was the timeline sufficient for SERs to provide feedback?
– Does the process allow the CFPB to adequately consider
comments from SERs?
– What views do the SERs have on these issues?
Questions for the Panelists? Text 66364 and your question to 22333
SBREFA PANEL PROCESS
• Description of some (not all) proposals will be released
to the SERs and public.
• Panel meets with SERs and seeks feedback on the
potential economic impacts of complying with the
proposals:
– Other federal regulations that may overlap, duplicate, or
conflict with the proposed rule
– Anticipated compliance costs of the proposed rule
– Alternatives that could minimize any significant economic
impacts of the proposed rule
• Timing:
– 60 days from meeting to final report
– 2 weeks from meeting for written comments from SERs
Questions for the Panelists? Text 66364 and your question to 22333
SBREFA PANEL
CONSIDERATIONS
• Provides an early look at the proposals
under consideration
• Opportunity for companies, small and large,
to develop and present metrics (usually
through their respective trade associations)
• Coordination of SERs on main themes is
valuable prior to the meeting
• Metrics are essential, and the sooner the
better
Questions for the Panelists? Text 66364 and your question to 22333
LEGISLATION – SMALL BUSINESS
• H.R. 1195: Bureau of Consumer Financial Protection
Advisory Boards Act - Pittenger (R-NC) Directs CFPB to
establish a Small Business Advisory Board to: (1) advise
and consult with the CFPB in the exercise of its
regulatory functions; (2) provide information on evolving
small business practices. Referred to Senate.
• Sen. Vitter July 11th letter to GAO:
– Were the materials distributed adequate?
– Was the timeline sufficient for SERs to provide feedback?
– Does the process allow the CFPB to adequately consider
comments from SERs?
– What views do the SERs have on these issues?
Questions for the Panelists? Text 66364 and your question to 22333
LEGISLATION – ACCOUNTABILITY
• S. 510 & H.R. 957: Bureau of Consumer Financial
Protection-Inspector General Reform Act of 2015
– Portman (R-OH) & Stivers (R-OH) Creates an
Inspector General for the CFPB. In Committee.
• S. 1383 & H.R. 1261: Consumer Financial
Protection Bureau Accountability Act of 2015 –
Purdue (R-GA) & Duffy (R-WI) Subjects the
CFPB to the regular appropriations process. In
Committee.
Questions for the Panelists? Text 66364 and your question to 22333
LEGISLATION – SAFETY ACTS
• H.R. 1266: Financial Product Safety Commission Act of
2015 - Neugebauer (R-TX) Replaces the CFPB with an
independent Financial Product Safety Commission
composed of five members appointed by the
President by and with the advice and consent of the
Senate. In Committee.
• H.R. 1263: Consumer Financial Protection Safety and
Soundness Improvement Act of 2015 - Duffy (R-WI)
Authorizes the Financial Stability Oversight Council
to issue a stay or set aside any regulation issued by
the CFPB upon the affirmative vote of the majority of
Council members. In Committee.
Questions for the Panelists? Text 66364 and your question to 22333
LEGISLATION - PRIVACY
• S. 96: A bill to amend the Consumer Financial
Protection Act of 2010 to provide consumers with a
free annual disclosure of information the Bureau of
Consumer Financial Protection maintains on them –
Vitter (R-LA) In Committee.
• H.R. 1262: Consumer Right to Financial Privacy Act of
2015 - Duffy (R-WI) Prohibits the CFPB from
requesting, accessing, collecting, using, retaining, or
disclosing nonpublic personal information about a
consumer unless: (1) the CFPB discloses to the
consumer what information will used; and (2) the
consumer informs the CFPB that such information
may be used. In Committee.
Questions for the Panelists? Text 66364 and your question to 22333
CFPB 2015 Proposed Amendments
A. Background
B. Proposed changes reviewed in this session:
1. successors in interest; and
2. loan modifications for files that are
service transferred, also called “in flight”
modifications.
Questions for the Panelists? Text 66364 and your question to 22333
CFPB 2015 Proposed Amendments
C. Successors in Interest
1. Current Rules
2. Proposed 2015 amendments
i. Who qualifies
ii. Communication with a Potential SII
iii. Protections that Apply to a
Confirmed SII
Questions for the Panelists? Text 66364 and your question to 22333
CFPB 2015 Proposed Amendments
D. Mortgage Servicing Transfers
1. Current Rules
2. Proposed Amendments re: Servicing
Transfers and Loss Mitigation
i. Timeframes
ii. Exceptions
iii. Goal
Questions for the Panelists? Text 66364 and your question to 22333
PPTFA
A. Background
B. Proposed legislation: PPTFA
C. Alternatives to PPTFA
D. Website: http://nhlp.org/node/1341
Questions for the Panelists? Text 66364 and your question to 22333
TRID
A. Background
B. Amendment
C. Documents
a. Loan Estimate (three days after loan
application)
b. Closing Disclosure (three days before
closing)
Questions for the Panelists? Text 66364 and your question to 22333
TRID
D. Issues with implementation
a. Scope of business affected
b. Operational changes required
c. Systems changes required
E. Timing
a. Effective date: August 1, 2015
b. Delayed effective date: October 3, 2015
F. Resources
Questions for the Panelists? Text 66364 and your question to 22333
Legislation We’re Watching:
Financial Regulatory Improvement Act of 2015 (S. 1418)
A broad, legislative package aimed at providing commonsense fixes to Dodd Frank,
including:
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Extending the examination cycle for community banks
Helping rural consumers get mortgages
Safe harbor for mortgages held in a bank’s portfolio
Reduces unnecessary costs from stress testing community banks
Establishes a process for federal regulators to evaluate institutions to
determine whether to designate them as systemically important
• Sponsor: Shelby/AL (R)
Questions for the Panelists? Text 66364 and your question to 22333
Legislation We’re Watching:
Mortgage Servicing Asset Capital Requirements Act of 2015 (H.R. 1408)
Bill would allow regulators will have six months to study and report back to
Congress on many outstanding questions about the mortgage servicing industry
including:
• How the assets performed during the financial crisis
• The ability to establish a value and liquidity for MSAs
• The ability of regulated banks to service mortgages they originate
• Sponsor: Perlmutter/CO-7 (D)
• Co-Sponsor(s): Luetkemeyer/MO-3 (R)
Hill/AR-2 (R)
Questions for the Panelists? Text 66364 and your question to 22333
Legislation We’re Watching:
Bureau of Consumer Financial Protection-Inspector General Reform Act of 2015 (S. 510)
Bureau of Consumer Financial Protection-Inspector General Reform Act of 2015 (H.R. 958)
Bills would create the position of an independent Inspector General for CFPB:
• Under current law, the CFPB has to share an IG with the Federal
Reserve.
• Unlike most major agency IGs, the Federal Reserve IG is a “designated
federal entity IG” hired by the Fed Chairman, rather than appointed by
the President with the advice and consent of the Senate.
• Sponsor: Stivers/OH-15 (R)
• Co-Sponsor(s): Luetkemeyer/MO-3 (R)
Hill/AR-2 (R)
Royce/CA-39 (R)
Walz/MN-1 (D)
Wagner/MO-2 (R)
Trott/MI-11 (R)
Rothfus/PA-12 (R)
Questions for the Panelists? Text 66364 and your question to 22333
Legislation We’re Watching:
Illinois HB 2814
•
The Illinois Appellate Court ruled in March 2014 that a mortgage is void if the originating lender was not
licensed (or exempt) under the Illinois Residential Mortgage Licensing Act of 1987 at the time the loan
originated. See. First Mortgage Company, LLC v. Gratzielda Dina, 2014 IL App (2d) 130567. This case has
created a new line of mortgage foreclosure defense strategy.
•
Recently, Judge Otto in Cook County expanded the holding of Dina to say that if any lender in the chain of title
was not properly registered, then the mortgage is declared void.
•
The Illinois Department of Financial & Professional Regulation has a website that can be searched to ensure
the originating lender was licensed if they are not an exempt entity.
–
www.idfpr.com
•
HB 2814 is proposed legislation that would override the holding in Dina by amending the Residential Mortgage
License Act of 1987 to provide that a mortgage loan brokered, funded, originated, serviced, or purchased by a
party who is not licensed shall not be held to be invalid solely on the basis of specified violations of the Act.
•
The bill passed both the House and Senate and is currently with the Governor awaiting signature. It is unclear
at this time whether this law will be enacted.
Legislation We’re Watching:
Ohio HB134
Vacant and Abandoned Properties – Summary Foreclosure Actions
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HB134 (which is in committee) –Introduced 3/25/2015 and referred to the
Financial Institutions Housing and Urban Development Committee on 4/14/2015
This bill makes changes to judicial foreclosure actions in Ohio. It permits the
holder of a mortgage note to bring a summary foreclosure action against
residential property that appears to be “vacant and abandoned”.
The bill modifies the procedures that generally apply to the judicial sale of
property.
The bill creates a pilot program for “unoccupied, blighted” property, under
which a municipal corporation may seek an order for remediation against the
owner of the property.
The bill also expands the jurisdiction of the Toledo Municipal Court over certain
real property actions and expands the responsibilities of the clerk of common
please related to the filing of a judgment of foreclosure.
Questions for the Panelists? Text 66364 and your question to 22333
Legislation Update:
Ohio HB9
• HB9 (Enacted)- To amend sections 317.08,
2333.22, 2715.21, 2735.01, 2735.02, 2735.04, and
5301.09 of the Ohio Revised Code to add to and
clarify the powers of a receiver, to provide a
procedure for a receiver's sale of property, to
specify that a lease of natural gas and
petroleum is an interest in real estate, and to
establish a Study Committee on Receivership
Laws to study matters related to receiverships
and payment of public utility services
Questions for the Panelists? Text 66364 and your question to 22333
Legislation Update:
Indiana SB-415
Vacant and Abandoned Housing (SB-415):
Establishes that the State of Indiana is the sole regulator of the
mortgage foreclosure process. This law preempts all other
regulation(s) of the mortgage foreclosure process by a political
subdivision (municipal corporation or special taxing district). A
political subdivision cannot create ordinances imposing reporting
requirements or any other obligations upon mortgage
lenders/servicers regarding vacant and abandoned properties.
This bill was signed by the governor, and became law on May 6,
2015. This law is effective July 1, 2015.
Questions for the Panelists? Text 66364 and your question to 22333
Legislation Update:
MINNESOTA STATUTE § 580.033
WHERE NOTICE PUBLISHED
•
The Minnesota State Legislature added this statute providing that the qualified newspaper
where the Notice of Sale is published must have its known office of issue either:
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–
–
Where the mortgaged premises is located;
Where part of the mortgaged premises is located; or
In an adjoining county with circulation in the County where the mortgaged premises is located.
•
Known Office of Issue is defined in Minn. Stat. 331A.01, subdivision 2 to mean the newspaper’s
principal office devoted primarily to business related to the newspaper. A newspaper may only
have one (1) known office of issue.
•
Qualified newspaper is defined in Minn. Stat. 331A.01, subdivision 8, as a newspaper which
complies with the requirements of 331A.02. [These specific statutes may be provided upon
request.]
•
The statute also requires that the Affidavit of Publication list where the known office of issue is
located and that the newspaper complies with the provisions in the statute.
•
This statute is effective July 1, 2015 and applies to foreclosures where the Notice of Pendency is
recorded on or after that date.
Legislation Update:
MINNESOTA STATUTE § 582.25 –
MORTGAGES; VALIDATING FORECLOSURE SALES
•
This statute is commonly known within the state as the “curative” statute. It
provides that certain defects in the foreclosure process will cure if an action
alleging the defect is not commenced by the mortgagor within the specified
time frame.
•
The legislature added subdivision 24 relating to Minn. Stat. 580.033. If the
publication of the notice of sale does not comply with Minn. Stat. 580.033 the
borrower will have until 1 year following the expiration of the redemption
period to bring a claim. If they fail to do so, this issue is considered cured and
no longer an issue.
•
This statute was also revised to add a subdivision allowing a curative provision if
the notice of postponement of the sheriff’s sale was not timely or properly
mailed or published.
•
This statute is effective July 1, 2015 and applies to foreclosures where the Notice
of Pendency is recorded on or after that date.
Legislation Update:
MINNESOTA STATUTE § 580.07, Subd. 2
POSTPONEMENT BY MORTGAGOR OR OWNER
• This statute was revised to include subdivision 2
(2)(c) which clarifies that the mortgagor’s
redemption period is reduced only for the
foreclosure action where the Affidavit was filed. For
any subsequent foreclosure actions the reduction
period reverts back to the full time period. The
exception is for circumstances where a bankruptcy is
filed after the Affidavit of Postponement is filed
invoking the automatic stay,
• This section is effective May 2, 2015 and applies to
mortgages executed before, on or after that date.
Legislation Update:
MINNESOTA STATUTE § 580.30
REINSTATEMENT
• This statute was revised to add requirements on when a
reinstatement quote must be sent. The mortgagee is to
provide the reinstatement quote to the borrower within
three days of the request for figures. If the
reinstatement quote is not mailed within three days of
receipt of the request it will not invalidate the
foreclosure sale and there will not be any liability
assessed to the party foreclosing or its attorney. Further,
the party foreclosing does not have an obligation to
postpone the foreclosure sale in order to comply, if they
request is made less than 3 days prior to sale. The
reinstatement amount is effective for seven days after
the quote is provided or until the date of the foreclosure
sale, whichever occupies first.