January 17, 2012

Mortgage Loan Escrow Accounts

Filed under: Compliance,Consumer Lending — Admin User @ 4:53 pm

The General Obligations Law, the Banking Law and New York State Banking Board General Regulation Part 10 specifically requires a lender to pay 2% on mortgage loan escrow accounts.  Institutions are expected to pay 2% on these accounts even if they offer other interest bearing accounts at 2% or less. It is important to remember that for mortgage loan escrow accounts, the customer is not a depositor but a borrower.

Banks require an escrow balance for the payment of taxes and insurance and to protect the lien against a tax foreclosure.  The bank requires the deposit as an incident to the loan and the bank must pay the statutory rate (not the prevailing rate).

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April 26, 2010

Board to Hold Four Public Hearings on Home Mortgage Disclosure Act

Filed under: Compliance,Consumer Lending — Admin User @ 12:24 pm

The Federal Reserve Board has announced that it will hold four public hearings, beginning in July, on potential revisions to Regulation C, which implements the Home Mortgage Disclosure Act. The act requires mortgage lenders to provide detailed annual reports of their mortgage lending activity to regulators and the public. Consumers, community and consumer organizations, mortgage lenders and other interested parties will be invited to participate in the hearings.

The hearings will serve three objectives. First, the Board will gather information to evaluate whether the 2002 revisions to Regulation C, which required lenders to report mortgage pricing data, helped provide useful and accurate information about the mortgage market. Second, the hearings will provide information that will help the Board assess the need for additional data and other improvements. Finally, the hearings will help identify emerging issues in the mortgage market that may warrant additional research.

All hearings will include panel discussions by invited speakers.

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March 10, 2010

Proposed Rules to Protect Credit Card Users

Filed under: Consumer Lending — Admin User @ 12:38 pm

The Federal Reserve Board has proposed a rule amending Regulation Z (Truth in Lending) to protect credit card users from unreasonable late payment and other penalty fees and to require credit card issuers to reconsider increases in interest rates.

Among other things, the proposed rule would:

  • Prohibit credit card issuers from charging penalty fees (including late payment fees and fees for exceeding the credit limit) that exceed the dollar amount associated with the consumer’s violation of the account terms. For example, card issuers would no longer be permitted to charge a $39 fee when a consumer is late making a $20 minimum payment. Instead, the fee could not exceed $20.
  • Ban inactivity fees, such as fees based on the consumer’s failure to use the account to make new purchases.
  • Prevent issuers from charging multiple penalty fees based on a single late payment or other violation of the account terms.
  • Require credit card issuers to inform consumers of the reasons for increases in rates.
  • Require issuers that have increased rates since January 1, 2009, to evaluate whether the reasons for the increase have changed and, if appropriate, to reduce the rate.

The proposed rule represents the third stage of the Federal Reserve’s implementation of the Credit Card Accountability Responsibility and Disclosure Act of 2009 (Credit Card Act), which was enacted in May 2009. The provisions of the Credit Card Act addressed in this proposal will go into effect on August 22, 2010. In July 2009, the Board issued a rule implementing the provisions of the Credit Card Act that went into effect on August 20, 2009. In January 2010, the Board issued a rule to implement the provisions of the Credit Card Act that went into effect on February 22, 2010.

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Online Consumer Guide to Credit Cards

Filed under: Compliance,Consumer Lending — Admin User @ 12:00 pm

The Federal Reserve Board launched a new interactive website to help consumers better understand the new credit card protections that will took effect on February 22. These rules ban several harmful practices and require greater transparency in the disclosure of the terms and conditions of credit card accounts.

The site, which can be found at www.federalreserve.gov/creditcard, summarizes the main provisions of the rules and explains how they will affect credit card users. Two interactive features will allow consumers to learn more about the terms and fees of credit card offers and about the new features of their monthly statements.

Information about recent changes in credit card rules forms the core of the site, but basic facts about common credit card options, interest rates, and fees are also provided. Consumers will find a glossary of common credit card terms for quick reference. A list of federal credit protection laws provides a basic guide for those who want to learn more about their rights.

The site also provides information about common credit card problems–such as lost or stolen cards–and links to resources for consumers who are experiencing problems with their accounts.

Some of the material on the site, such as the “5-Tips” publications, is available in Spanish. The Board will continue to build the site during the coming months to include additional credit card information, features, and Spanish translations.

The web address for the Federal Reserve’s guide to credit cards will appear on the solicitations consumers receive from credit card issuers.

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December 10, 2009

What’s New: Agencies Announce Availability of 2008 HMDA Data

Filed under: Consumer Lending,What's New — Admin User @ 2:46 pm

The Federal Financial Institutions Examination Council (FFIEC) has announced the availability of data on mortgage lending transactions at 8,388 U.S. financial institutions covered by the Home Mortgage Disclosure Act (HMDA). Covered institutions include banks, savings associations, credit unions, and mortgage companies.

The HMDA data cover 2008 lending activity—applications for loans, loan originations, loan denials, and purchases of loans. The data also include disclosure statements for each financial institution, aggregate data for each metropolitan statistical area (MSA), nationwide summary statistics regarding lending patterns, and Loan Application Registers (LAR) for each financial institution (LARs modified for borrower privacy).

The FFIEC prepares and distributes this information on behalf of its member agencies (Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, National Credit Union Administration, Office of the Comptroller of the Currency, and Office of Thrift Supervision) and the Department of Housing and Urban Development.

Financial institution disclosure statements, individual institutions’ LAR data, and MSA and nationwide aggregate reports are available at http://www.ffiec.gov/hmda. Refer to the HMDA data products at http://www.ffiec.gov/hmda/hmdaproducts.htm for the item descriptions and formats.

For further information see HMDA FAQs.

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