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3 Takeaways (a Litigator’s Perspective) from CFPB Supervisory Highlights

June 27, 2016

Authors

Douglas Thompson

3 Takeaways (a Litigator’s Perspective) from CFPB Supervisory Highlights

June 27, 2016

by: Douglas Thompson

The CFPB recently issued its newest edition of Supervisory Highlights Mortgage Serving Special Edition, Issue 11 (June 2016).

From a litigator’s perspective, the Supervisory Highlights do more than summarize recent supervisory findings, they also shine a light on future examination and putative class action risks that are emerging. The CFPB is providing key insights into what it believes should be industry standards. Banks and mortgage servicers should read carefully both the specific findings summarized and slightly more subtle clues to evolving future CFPB requirements.  Here are three takeaways on the Highlights from a financial services class action litigator’s perspective:

  • ECOA & Special Servicing Populations Continue to be a Strong CFPB focus.
  • In section 2, “Our approach to mortgage servicing examinations,” the CFPB uses a fair amount of real estate to highlight ECOA requirements. In fact, the report states clearly “…Supervision will be conducting more comprehensive ECOA Targeted Reviews of

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    Best Practices for Bank Boards – Part 4

    July 23, 2012

    Authors

    Jim McAlpin

    Best Practices for Bank Boards – Part 4

    July 23, 2012

    by: Jim McAlpin

    (A PDF version will all of the Best Practices for Bank Boards has been added to our White Papers.)

    I frequently speak to groups of bank CEOs and directors at state and national conferences. One of my favorite topics is “best practices for bank boards.” The audience reaction always confirms my belief that bank boards of directors all face the same fundamental challenges, regardless of the size or geographic location of the bank and the shareholder base which they serve. Boards of directors are groups of people, and every group of people develops its own set of shared expectations and priorities. It can be helpful for a bank board to occasionally take the time to reflect on its approach to self governance and decision making, especially when this is done by examining the experience and success of other boards of directors in the

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    Best Practices for Bank Boards – Part 3

    March 19, 2012

    Authors

    Jim McAlpin

    Best Practices for Bank Boards – Part 3

    March 19, 2012

    by: Jim McAlpin

    Over the past several years we have seen the regulatory agencies become much more focused on board oversight and performance. This is a natural point of focus for regulators in a time of crisis in the banking industry. The fiduciary and oversight obligations of members of boards of directors are well established, and there is a road map in the corporate records for following the actions and deliberations of a board. I would suggest, however, that a board of directors could receive a gold star for the quality of its minute records and its adherence to the established principles of corporate governance, and yet fall well short of being an effective working group.

    This is the third in a series of articles of best practices for bank boards.   (Parts 1 and 2 can be found here and here, respectively.)   Over the past several decades my

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    Best Practices for Bank Boards – Part 2

    February 1, 2012

    Authors

    Jim McAlpin

    Best Practices for Bank Boards – Part 2

    February 1, 2012

    by: Jim McAlpin

    Over the past several years I have attended dozens of meetings of boards of directors of banks in troubled condition.  The vast majority of these boards were well functioning and had dedicated and hard working directors.  Geographic location has been the predominant factor in determining winners and losers among banks in this challenging economy.  However, there have been several situations in which it appeared to me that the composition of a board, and the interpersonal dynamics among its members, had magnified the impact of the economic downturn.  A bank board is like any other working group in that the direction and decisions of a board can be heavily influenced by members who dominate the conversation, or by members who actively discourage discussion or dissent.

    This is the second in a series of articles on best practices for bank boards.  (Part 1 can be found here.) During the past several

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    Best Practices for Bank Boards – Part 1

    December 5, 2011

    Authors

    Jim McAlpin

    Best Practices for Bank Boards – Part 1

    December 5, 2011

    by: Jim McAlpin

    Today’s banking industry is constantly being buffeted by waves of financial, regulatory and operational challenges. The increased regulatory burden and related costs impact every financial institution in both the approach to doing business and the expense of doing business. The industry is in transition, with no clear path forward. As a result, there has never been a greater need for well functioning, informed and courageous boards of directors of banks and bank holding companies. There has also never been a more important time for board members to keep in mind that their responsibilities can be boiled down into one simple goal: the creation of sustainable long-term value for shareholders.

    Achieving long-term value for shareholders may seem an elusive goal in the current environment. On more than one occasion, bank board members have commented to me that they feel they are now working for the benefit of

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