On April 1, 2016, the CFPB published its 2015 Consumer Response Annual Report. This annual report summarizes trends the CFPB has identified from 271,600 complaints that it accepted from financial product consumers during 2015. These complaint data can be a useful source of insight for banks and lenders to identify general areas that require attention [...]
On February 2, the Consumer Financial Protection Agency and the Department of Justice announced a $21.9 million dollar settlement with the Toyota Motor Credit Corporation. According to the CFPB and the DOJ, Toyota Motor Credit policy, which gives auto dealerships discretion in how much interest rate markup they pass along to consumers, resulted in higher rates [...]
The Justice Department reached a settlement with Massachusett-based Sage Bank over allegations that the mortgage lender violated the Fair Housing Act and the Equal Credit Opportunity Act (ECOA). According to a November 30 complaint and proposed consent order, DOJ alleged that Sage Bank engaged “in a pattern or practice of discrimination on the basis of [...]
The Consumer Financial Protection Bureau has released its fall 2015 Supervisory Highlights Report. The report calls attention to alleged illegal practices in various sectors of the financial services industry, including debt collection, student loan servicing, mortgage origination and servicing, and consumer reporting. According to the report, the CFPB’s supervisory actions resulted in more than $107 million in restitution [...]
On September 21, 2015, the City of Oakland, California filed a lawsuit in federal court seeking punitive damages from Wells Fargo for alleged violations under the Fair Housing Act (FHA). The complaint accuses Wells Fargo of discriminatory practices by steering minority borrowers into high-cost mortgages despite being qualified for lower cost options (Reuters, 9/22/2015): Oakland's lawsuit [...]
Today, the Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ) announced a joint action against Hudson City Savings Bank for illegal redlining. The complaint alleges that the Bank “structured its mortgage business to provide unequal access to credit products in majority-Black-and-Hispanic neighborhoods in New York, New Jersey, Connecticut, and Pennsylvania.” This settlement, [...]
In this contribution to ADI Adviser, ADI Senior Economist Paul J. Strasberg discusses the need for a dynamic analysis plan in modeling underwriting processes. Paul demonstrates how the dynamic approach is "better aligned with the process used by lenders, results in lower and well-identified high risk cases, and should be well received by regulatory authorities." In addition, [...]
In a study conducted by the Florida Atlantic University's College of Business, African-American mortgage borrowers were more likely to receive higher interest rates than their white, non-Hispanic counterparts. The study, based on data available from the U.S. Survey of Consumer Finances, controlled for various factors available in the data, such as income, education level and shopping [...]
According to a recent survey conducted by Wells Fargo, a majority of African Americans and Hispanics believe that a 20 percent down payment is required to purchase a new home (source: Boston.com, 8/3/15): Consumers also overestimated the amount of money needed for down payment funds to qualify for a home loan, with 36 percent believing [...]
Second quarter 2015 financial results for Wells Fargo and JPMorgan Chase signal a strong rebound in the mortgage market from 2014. This growth was attributed to healthy demand in the home purchase market, based on improving economic conditions, affordable home prices, and continued low interest rates (MarketWatch.com, 7/14/2015): “It was a strong quarter” for the purchase market, [...]
