Here are highlights of the past week's activities. Previous Weekly Rewinds are available on our Resources page.

Our Monthly Recap for June is also available here.

Mortgage Servicing Rule - The CFPB finalized a rule to facilitate streamlined loan modification efforts and establish a temporary COVID-19 emergency pre-foreclosure period under Regulation X that would prohibit servicers from making the first notice or filing required to initiate foreclosure until Dec. 31. This “pre-foreclosure” period would apply to mortgage loans secured by the borrower’s principal residence. The final rule will also temporarily allow mortgage servicers to offer certain loan modifications to borrowers experiencing a COVID-19-related hardship based on the evaluation of an incomplete application. It also requires servicers to discuss specific, additional COVID-19-related information as part of their early intervention obligations; clarifies servicers’ reasonable diligences when the borrower is in a short-term payment forbearance program made available to a borrower experiencing a COVID-19-related hardship based on the evaluation of an incomplete application; and offers a definition of a “COVID-19-related hardship.” (Executive Summary, Unofficial Redline) (Published June 28, 2021)

Supervisory Highlights - The CFPB issued the latest issue of Supervisory Highlights, focusing on recent examiner observations of several financial products. Among other things, examiners flagged issues related to consumer reporting, debt collection, and payday lending. Examiners identified several issues related to consumer reporting, including failure by consumer reporting companies to comply with accuracy procedures, failing to place security freezes on consumer’s reports, and failing to update and correct consumer information. (Published 06/29/2021)

The CFPB also notified HMDA filers that they will be conducting maintenance on the HMDA Beta Platform beginning next week. There may be intermittent outages during the week.

Resolution Plans - The FDIC outlined a modified approach to implementing a rule requiring insured depository institutions with $100 billion or more in total assets to submit resolution plans. The modified implementation rules extend the resolution plan submission frequency to a three-year cycle and provide new details on the FDIC’s intended engagement with the affected firms and the capabilities testing required throughout the filing cycle. (Published June 25, 2021)

Fair Lending Policy Statement - The Federal Housing Finance Agency issued a policy statement on Fair Lending to communicate the agency's general position on monitoring and information gathering, supervisory examinations, and administrative enforcement related to the Equal Credit Opportunity Act, the Fair Housing Act, and the Federal Housing Enterprises Financial Safety and Soundness Act. (Published July 1, 2021)

AML/CTF Priorities - The FinCEN issued the first government-wide priorities for anti-money laundering and countering the financing of terrorism (AML/CFT) policy (the “Priorities”). The Priorities identify and describe the most significant AML/CFT threats currently facing the United States. FinCEN today also issued two statements, in coordination with other regulators, to provide guidance to certain covered financial institutions (banks, non-bank financial institutions) on the applicability of the Priorities before regulations are promulgated. (Published June 30, 2021)

Jurisdictions with AML/CFT/CPF Deficiencies - As part of the FATF’s listing and monitoring process to ensure compliance with international standards, the FATF issued two statements: (1) High-Risk Jurisdictions Subject to a Call for Action, which identifies jurisdictions with significant strategic deficiencies in AML/CFT/CPF regimes and calls on all FATF members to apply enhanced due diligence, and in the most serious cases, apply counter-measures to protect the international financial system from the money laundering, terrorist financing, and the proliferation of financing risks emanating from the identified countries; and (2) Jurisdictions under Increased Monitoring, which publicly identifies jurisdictions with strategic deficiencies in AML/CFT/CPF regimes that have committed to, or are actively working with, the FATF to address those deficiencies in accordance with an agreed upon timeline. (Published July 1, 2021)

From the FFIEC:

Revision of the Operations Booklet and Name Change to Architecture, Infrastructure, and Operations Booklet - The FFIEC issued a new booklet in the FFIEC Information Technology Examination Handbook series, titled “Architecture, Infrastructure, and Operations.” The booklet provides expanded guidance to help financial institution examiners assess the risk profile and adequacy of an entity’s information technology architecture, infrastructure, and operations. (Published 06/30/2021)

List of Distressed or Underserved Nonmetropolitan Middle-Income Geographies - The FFIEC announced that the FRS and the FDIC published the list of geographic areas where revitalization or stabilization activities are eligible to receive Community Reinvestment Act (CRA) consideration. (Published June 25, 2021)

Distressed and Underserved Tracts - The Board of Governors of the Federal Reserve System and the FDIC announced the availability of the 2021 list of distressed or underserved nonmetropolitan middle-income geographies. These are geographic areas where revitalization or stabilization activities are eligible to receive Community Reinvestment Act (CRA) consideration under the community development definition. (Published June 25, 2021)

Scaled CECL Allowance for Losses Estimator - The Federal Reserve announced that it will soon release a new tool to help community banks implement the Current Expected Credit Losses (CECL) accounting standard. Known as the Scaled CECL Allowance for Losses Estimator or "SCALE," the spreadsheet-based tool draws on publicly available regulatory and industry data to aid community banks with assets of less than $1 billion in calculating CECL allowances. The Federal Reserve will launch the SCALE tool and answer questions during an "Ask the Fed" webinar on July 15, 2021. (Published July 1, 2021)

Disparate Impact Rule - The Department of Housing and Urban Development proposed to recodify its 2013 discriminatory effects rule. Under the 2013 rule, the burden shifts to the defendant to prove that the policy or practice is necessary to achieve a substantial, legitimate, nondiscriminatory interest if the plaintiff first proves that the policy or practice caused or predictably will cause a disparate impact on a protected group. (Published June 25, 2021)

Capitalization of Interest - The NCUA is amending regulations to remove the prohibition on the capitalization of interest in connection with loan workouts and modifications. The final rule also establishes documentation requirements to help ensure that the addition of unpaid interest to the principal balance of a mortgage loan does not hinder the borrower's ability to become current on the loan. (Published June 30, 2021)

Prohibition Orders - The NCUA issued one prohibition notice and two prohibition orders in June. (Published July 1, 2021)

Mortgage Performance Declines in First Quarter 2021 - The OCC Mortgage Metrics Report showed that 4.6% of mortgages were seriously delinquent – including mortgages that were 60 or more days past due, and all mortgages held by bankrupt borrowers whose payments are 30 or more days past due. This was down from the 5.2% seriously delinquent mortgages reported in the fourth quarter of 2020, but up from 1.4% a year ago. (Published June 28, 2021)

On July 4, 1776, the Second Continental Congress unanimously adopted the Declaration of Independence, announcing the colonies' separation from Great Britain.

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