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Compliance

"Responsible lending by community banks and credit unions did not cause the financial crisis, and our mortgage rules reflect the fact that small institutions play a vital role in many communities," said CFPB Director Richard Cordray.
In yet another revision of its mortgage rules, the Consumer Financial Protection Bureau proposed making it easier for small and rural lenders to make "qualified mortgages." Industry representatives said the changes are poised to make a big difference.
The Truth in Lending Act "leaves no doubt that rescission is effected when the borrower notifies the creditor of his intention to rescind," Justice Antonio Scalia wrote in the Jan. 13 opinion.
The Supreme Court gave borrowers the path to file a rescission notice without going to court, but experts expect more banks to initiate legal proceedings to stop rescissions they see as frivolous.

Having a proactive compliance system can protect a company. Not having one leaves a firm exposed.
Consent decrees issued (and not issued) last week demonstrate how having appropriate compliance controls can and will make a major difference in any potential regulatory response.

Standard & Poor’s agreed to a one-year suspension from rating certain commercial mortgage bonds and $80 million in fines to settle charges with the Securities and Exchange Commission and the New York and Massachusetts Attorneys Generals offices.

All parties — lenders, servicers and secondary market — are asking "how do we manage the risks? How do we know what the risks are and how do we manage them so we don't have anything go wrong?" said KPMG's Larry Walker.
Bank servicers have a compliance dilemma: they need to quickly shed mortgage-servicing rights ahead of Basel III at a time when regulators are keeping a close watch on the manner in which transfers are handled.

Analytics that model operational and repurchase risk may help reduce concerns.
The government-sponsored enterprises' changes to their representations and warranties regulations could increase lending — and some risks. Here's the downside to the move and how lenders can mitigate related concerns.
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