TheMReport

56 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST GOVERNMENT CFPB Offers Clarity on TRID The Bureau announced final updates and technical corrections to the "Know Before You Owe" rule. T he industry has long called for clarifica- tion of the Consumer Financial Protection Bureau's (CFPB) TILA-RESPA Integrated Disclosure rule—or TRID—and it seems the Bureau has finally delivered. The CFPB released its final updates to the "Know Before You Owe" rule in early July. The Bureau's updates offer clari - fications and technical corrections to the existing TRID rule, which went into effect on Oct. 3, 2015. The rule created a streamlined series of forms that aims to help consumers better understand their mortgage loans and avoid surprise costs and fees come closing time. "A mortgage is one of the largest financial decisions a consumer will ever make, and CFPB's rules help ensure consum - ers have the easy-to-understand information they need before making a decision that will significantly impact their financial lives," CFPB Director Richard Cordray said. "Our updates will clarify parts of our mortgage disclosure rule to make for a smoother implementation process for lenders and consumers." The biggest issues addressed in the Bureau's recent updates were tolerances for the total of payments. The updates read, "Before the 'Know Before You Owe' mortgage disclosure rule, the total of payments disclosure was determined using the finance charge as part of the calculation. The "Know Before You Owe" mortgage disclosure rule changed the total of payments calculation so that it did not make specific use of the finance charge. The Bureau is now finalizing updates to include tolerance provisions for the total of payments that paral - lel the tolerances for the finance charge and disclosures affected by the finance charge." The updates also offered clarity on issues surrounding housing as - sistance lending, cooperatives, and privacy and sharing of information. "The 'Know Before You Owe' mortgage disclosure rule requires creditors to provide certain mort - gage disclosures to the consumer," the updates read. "The Bureau has received many questions about sharing the disclosures provided to consumers with third parties to the transaction, including the seller and real estate brokers. The Bureau understands that it is usual, accepted, and ap - propriate for creditors and settle- ment agents to provide a Closing Disclosure to consumers, sellers, and their real estate brokers or other agents. The Bureau is finalizing additional commentary to clarify how a creditor may provide separate disclosure forms to the consumer and the seller." The CFPB has also announced a follow-up proposal to TRID, which will address when credi - tors can use Closing Disclosure forms rather than Loan Estimates to determine if estimated closing costs were disclosed in good faith and within tolerance. The Bureau will accept comments on the proposal for 60 days. Fed Stress Tests Show Near- Unanimous Bank Approval Only one bank will be required to resubmit its capital plan. T he Federal Reserve an- nounced the results of its Comprehensive Capi- tal Analysis and Review, or Stress Test, in late June. Thirty- four bank holding companies took part in the stress test, which is now in its 7th year. The Stress test operates in two parts: the quantitative and the qualitative. "When considering a firm's capital plan, the Federal Reserve considers both quantitative and qualitative factors," the Fed reported. "Quantitative fac - tors include a firm's projected capital ratios under a hypothetical scenario of severe economic and financial market stress. Qualitative factors include the strength of the firm's capital planning process, which incorporate risk manage - ment, internal controls, and governance practices that support the process." Out of the 34 banks, 13 were subject to both the quantita- tive and qualitative portions of the test, while the remaining 21 were rated only on quantitative factors. Of the total test group, the Fed did not object to a single bank's capital plan. One bank, however—Capital One Financial Corporation—will be required to resubmit its capital plan by the end of 2017, although they were still given a pass. The Fed found that U.S. firms' common equity capital ratio has more than doubled, rising to 12.5 percent at the end of Q1 2017 from 5.5 percent in Q1 2009—a total increase of $750 billion to $1.25 trillion. As a result, most major banks, including Wells Fargo, Bank of America, SunTrust Banks, JPMorgan, American Express, and Discover Financial Services are raising their dividends. CitiBank doubled its dividends, Fifth Third Bancorp showed a 3.10 percent increase, SunTrust boasted a 2.51 percent increase, and Discover's jumped 2.38 percent. Read below to find a complete list of the banks that participated in the stress test: Ally Financial, Inc.; American Express Company; BancWest Corporation; Bank of America Corporation; The Bank of New York Mellon Corporation; BB&T Corporation; BBVA Compass Bancshares, Inc.; BMO Financial Corp.; Capital One Financial Corporation; CIT Group Inc.; Citigroup, Inc.; Citizens Financial Group; Comerica Incorporated; Deutsche Bank Trust Corporation; Discover Financial Services; Fifth Third Bancorp; Goldman Sachs Group, Inc.; HSBC North America Holdings, Inc.; Huntington Bancshares, Inc.; JP Morgan Chase & Co.; Keycorp; M&T Bank Corporation; Morgan Stanley; MUFG Americas Holdings Corporation; Northern Trust Corp.; The PNC Financial Services Group, Inc.; Regions Financial Corporation; Santander Holdings USA, Inc.; State Street Corporation; SunTrust Banks, Inc.; TD Group US Holdings LLC; U.S. Bancorp; Wells Fargo & Company; and Zions Bancorporation.

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