FinCEN Proposes New International Wire Transfer Reporting Requirement

Posted on September 27, 2010 by Fred Rivera

September 27, 2010 - The Financial Crimes Enforcement Network (FinCEN) issued a Notice of Proposed Rulemaking in the Federal Register that, if finalized, will require banks and money-services businesses to report international wire transfers to the government.   The proposed rule would require certain depository institutions and money services businesses (MSBs) to affirmatively provide records to FinCEN of certain cross-border electronic transmittals of funds (CBETF). According to FinCEN's press release, current regulations already require that these financial institutions maintain and make available, but not affirmatively report, essentially the same information. FinCEN issued the proposed rule to meet the requirements of the Intelligence Reform and Terrorism Prevention Act of 2004 (IRTPA). Under Section 6302 of IRTPA,  the Treasury Department is required to study the feasibility of "requiring such financial institutions as the Secretary determines to be appropriate to report to the Financial Crimes Enforcement Network certain cross-border electronic transmittals of funds, if the Secretary determines that reporting of such transmittals is reasonably necessary to conduct the efforts of the Secretary against money laundering and terrorist financing."

FinCEN estimating the new rule will result in 500 million to 700 million new reports a year.  

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Treasury Releases Proposed TILA and RESPA Disclosure

Posted on September 22, 2010 by Fred Rivera

September 22, 2010 - The Treasury Department has released a sample 4-page form that will replace mortgage disclosure requirements of the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA). The proposed form can be found here.

Improving mortgage disclosures is a priority of the new Consumer Financial Protection Bureau.  "Moving quickly to improve mortgage disclosures is one in a series of concrete steps we're taking to implement the historic consumer protections included in the Dodd-Frank financial reform law," said Secretary Geithner in a press release.

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the newly created CFPB is responsible for combining and simplifying two overlapping mortgage disclosure forms that TILA and RESPA require lenders to provide to applicants.  TILA and RESPA disclosures have been the source of a tremendous amount of litigation, particularly since the mortgage-melt down, where borrowers facing foreclosure have asserted various TILA and RESPA violations for damages or to rescind the loan.
 

 

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Consumer Financial Protection Bureau Set to Take Flight July 21, 2011

Posted on September 21, 2010 by Fred Rivera

September 21, 2010 - The Obama administration designated July 21, 2011 as the date the Consumer Financial Protection Bureau (CFPB) will take over enforcement of federal consumer protection laws, including TILA and RESPA, that impact mortgage bankers.  The announcement was included in a Federal Registry Notice.  

Effective July 21, 2011, the CFPB will have full authority to prescribe rules or issue orders pursuant to any federal consumer financial law (as defined in the Dodd-Frank Act); officially receive staff transfers from the other agencies; and take over supervision responsibility of depository institutions with assets in excess of $10 billion.  The Federal Register Notice also states that, prior to July 21, 2011, the CFPB will begin conducting research on consumer financial products and services, develop its nationwide consumer complaint response center, and begin to plan implementation of its risk-based supervision of non-depository covered persons. The CFPB is planning a roundtable discussion to begin the process of merging Truth-in-Lending (TILA) and Real Estate Settlement Procedures Act (RESPA) disclosures.

The implementation of the CFPB will usher in a new era in consumer finance regulation and enforcement.  The broad CFPB authority will allow it to both write regulations and enforce those regulations in connection with consumer lending, including residental mortgage lending. 

On September 17, 2010, President Obama appointed Elizabeth Warren as Assistant to the President and Special Adviser to the Secretary of the Treasury.  Warren is expected to play a key role within the administration in organizing the CFPB.  In annoucing Warren's new role, President Obama stated "[t]he Consumer Financial Protection Bureau will crack down on the abusive practices of unscrupulous mortgage lenders [and] reinforce the new credit card law we passed banning unfair rate hikes."

Read more about Warren's appointment:  http://www.nytimes.com/2010/09/16/business/16consumer.html?_r=1&scp=2&sq=elizabeth%20warren&st=cse

 

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