Potential impact of Financial CHOICE Act on mortgage industry

Financial Choice Act mortgagesOn May 4, 2017, the House Financial Services Committee moved the Financial CHOICE Act to the House floor with a 34-26 party-line vote. We anticipate that the House will approve the bill in the coming weeks, but clearing the Senate is more uncertain because Democratic support will be necessary.

While the bill is generally viewed as a long-shot to move through the Senate, Republican lawmakers remain optimistic about the bill’s prospects. In light of the potential for drastic changes to the regulatory and supervisory requirements imposed by the Dodd-Frank Act, we wanted to take a closer look at what the Financial CHOICE Act could mean for financial institutions – starting with the mortgage industry.

Ask the Experts: Payments made over the phone and consumer consent

Proving consumer consent to payments over the phoneQuestion: Should lenders require the customer to provide verbal authorization for one-time debit card payments over the phone? Should lenders retain recordings of such authorizations?

Answer: Regulation E does not establish requirements pertaining to authorizations for one-time EFTs, but that doesn’t mean that lenders shouldn’t have certain practices in place to ensure those transactions are carried out properly.

CFPB’s prepaid card rule survives Congress challenge

CFPB prepaid rule CongressLast October, the CFPB issued its Final Rule for Prepaid Accounts which established comprehensive consumer protections for prepaid accounts under Regulation E. Due to the timing of the rule, Congress had until Thursday to repeal the regulation by passing a disapproval resolution in both chambers with simple majorities under the Congressional Review Act (CRA). That deadline came and went without a repeal of the Bureau’s new rule.