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| FAIR CREDIT REPORTING ACT - FEDERAL LEGISLATION ENACTED IN 1970 AIMED AT ENSURING INFORMATION USED BY LENDING INSTITUTIONS IS ACCURATE. |
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FAIR & ACCURATE CREDIT TRANSACTIONS ACT FEDERAL LEGISLATION ENACTED IN 2003 THAT AMENDED FCRA. IT AFFECTED THE RESPONSIBILITIES OF ORGANIZATIONS THAT ACCESS AND POST INFORMATION TO CONSUMER CREDIT REPORTS. |
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CONSUMER MORTGAGE PROTECTION ACT When enacted? Who does it serve? What does it define? |
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Enacted on December 23, 2002 by Michigan State Legislature. This Act serves as Michigan's anti-predatory lending law Defines a person as the following: *An individual *A corporation *A partnership *A government entity *Any other legal entity |
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CONSUMER MORTGAGE PROCTECTION ACT Applies to who? Exemptions? Required Disclosures? |
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CONSUMER MORTGAGE PROTECTION ACT
APPLIES TO: brokers, lenders & servicers of loan transactions & home improvement contracts securedby 1st lein, 2nd lein or other types of lein & land contracts affecting real property that is 1-4 principal dwelling. **Only applies to Commercial Loans where the tranaction is secured by a lien on residential property** EXEMPTIONS: *Reverse Mtg *Open-end credit that is subject to multiple advances *Purchase money transactions. REQUIRED DISCLOSURES: *Bill of Rights *Consumer Caution & Home Ownership Counseling Notice |
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BORROWER'S BILL OF RIGHTS Created from what Act? Required to be given to whom by whom? States the borrower has the right to? |
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Shop for best loan & compare charges Be informed on total cost including rate, points & fees Get a GFE Know non-refundable fees if withdraw application Ask Mtg broker to explain what they will do for them Ask ?'s about charges & loan terms they don't understand Credit decision not based on race, color, religion, etc. Reason loan application turned down Receive HUD settlement costs booklet "Buying Your Home"
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CONSUMBER CAUTION & HOME OWNERSHIP COUNSELING NOTICE Created from what Act? Requires what? Counseling provided by Whom? |
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CREATED BY: Consumer Mortgage Protection Act REQUIRES: lenders to give borrowers this form & provide lit of nearest HUD approved credit conseling agencies. COUNSELING PROVIDED BY: Dept of Housing & Urban Development (HUD) approved agency. |
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CONSUMER MORTGAGE PROTECTION ACT ProhibitedActs? Violations? Unintentional Violations? Disciplinary Actions? Penalties? |
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Definition
Prohibited: *charging for services not provided *financing single premium insurance *making false, deceptive or misleading statements *changing info on app that is false, disceptive or misleading *conditioning pymt of appraisal upon predetermined value or *the closing of the mtg loan which is the basis of appraisal *Paying appraiser to inflate the value *Providing borrower with incomplete promissory note *5 yr or less Neg Am loans (except construction) VIOLATIONS: Person who purchases mtg loan NOT liable for violations commited by transferring lender. UNINTENTIONAL: bona fide error - NOT an error in judgment NOT in violation if person notifies borrower of error & corrects error in 60 days & prior to the Attny Gen. or prosecuting Attorney instituting action DISCIPLINE ACTIONS: *Refer to Attorney General *Refer to Prosecuting Attorney *Initiate administrative enforcement action *Refer complaint to other regulatory authority PENALTIES: *Declatory judgment that person violated ACT *Prohibited from doing activity *Civil fine </=$10K for 1st offense & up to $20k for following |
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CONSUMER FINANCIAL SERVICES ACT(CFA) Regulates Who? License Class I & II allows what? Exemptions? |
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REGLATES: non-depository financial licensees & registrants to ensure safe operations & compliance with state law ALLOWS LICENSEE TO DO ADDITIONAL ACTIVITIES UNDER THESE ACTS: Class I & II - Credit Card Act Motor Vehicle Sales Finance Act Regulatory Loan Act The Secondary Mortgage Act (class II excludes servicing activity) Class I - Money Transmission Services Act Mtg. Broker, Lender & Servicers Licensing Act EXEMPTIONS: Depository institutions |
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CONSUMER FINANCIAL SERVICES ACT (CFA) LicensingRequirements? Fees? Surety Bond? Renewals? |
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REQUIREMENTS: Submit Application Pay app fee Pay investigation fee & submit to investigation Provide 10 yr employ & personal hstory Surety bond or irrevocable letter of credit Financial statement of net worth FEES: Class I License - $3,450 Class II 1,900 Application Fee 1,050 App Fee 250 (if already licensed with OFIR) Amend. to license cert 50 SURETY BOND: Class I (no exceptions) $1,500,000 Class II < 50 locations 500,000 Class II > 50 locations 1,500,000 RENEWALS: License expire Dec 31st, renew & fee </= Dec 15, if late $25 per day penalty or $1K whichever is less. |
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CONSUMER FINANCIAL SERVICES (CFA) License Certificate & Amendments Exemptions from Provisions of Act |
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LICENSE CERTIFICATE: *License must be available to view *Commissioner has to concent to transfer or assignment *To change name or location, must get approval from Commissioner *30 days written notice for doing business at other locations *Written notice to Commissioner when cease operation LICENSEES UNDER THE CFA ARE EXEMPT FROM PROVISIONS OF THE ACT THAT REGLATE THE FOLLOWING: *Application Procedures *Licensing Procedures *Pymt of fees by license *Filing of surety bonds *Denial, suspension or revocation of license *Retention of records *Filing of Reports |
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CONSUMER FINANCIAL SERVICES ACT (CFA) Prohibited Acts? |
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Failure to allow records to be examined Misstatement on application Violating provision of act or order of commissioner Fail to maintain license requirements Falsifying business records Failing to file timely reports Failing to furnish requested info Failing to pay fine Defrauding a consumer Knowing info existed that would have negated license Class I refusal or unable to pay when due Negligent loan servicing Failing to pay annual fees
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CONSUMER FINANCIAL SERVICES ACT (CFA) What is done to determine whether the provisions of state law have been violated? When to Cease and Desist? Request for Reconsideration? What applies to Hearings & Judicial Review? Suspension of License? |
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IF PROVISIONS VIOLATED - Commissioner will: *Investigation *Examination *Hearings *Subpoena witnesses & evidence *Administer oaths CEASE & DESIST - When Commissioner believes: *Poses a threat of financial loss *Poses threat to public welfare *Violated rule or law RECONSIDERATION: *May file written notice 15 days after issuance *Must contain written statement to support request *Must request oral argument to explain their case *Commissioner must grant or deny w/i 10 days *If denied, may appeal w/ Ingham County Circuit Court *Appeal must be w/i 30 days of order HEARINGS: *Must be conducted according to Admin Procedures Act *Private unless commission warrents public *Commissioner has to render decision w/i 90 days *Final decisions must include facts to support decisions grounds *Parties to hearing obtain judical review when timely requested *Commissioner may modify, terminate or set aside order *Proceeding for judicial review doesn't operate as stay of order SUSPENSION: *Must be accompanied by statement of facts for basis of suspension *Served upon the licensee *Once served, licensee has 20 days to request hearing *Suspension in effect until Commissionar warrents |
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CONSUMER FINANCIAL SERVICES ACT (CFA) Fraud or Money Laundering Penalties Fees Records |
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FRAUD: Hearing w/i 60 days, order in effect until stayed, modified or terminated. Prohibited from having license & bing employed in field. After 5 yrs can request Commissioner to terminate order. HEARINGS: Same as Hearings related to prohibited acts of the CFA with the exception of hearing being private. PENALTIES - Person who violates final order issued under CFA: *Guilty of misdemeanor *</= $5,000 *Imprisonment </= 1 year *Both fines & prison FEES: *Annual app fee $500-$2,000 *1 or more licenses under financial licenses Act $100-$700 *Amendments & reissuing a license $50-$100 *Annual operating fee based on previous year volume & activity *Out of state exam (travel, lodging, & meals) |
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CONSUMER FINANCIAL SERVICES ACT (CFA) What Records need to be maintained? For how long? Is there annual reporting? |
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RECORDS - Must be maintained by licensee: *Loan APplication *Credit Report *Employment Verification *Loan discosure statement *Settlement statement Records must be kept for 2 yrs from loan date or transfer If loan transferred, licensee must keep records for 3 yrs: *Copies of promissory note *Mortgage *TIL *Settlement Statement ANNUAL REPORTING: *Commissioner provides licensee with 30 day notice of due date *If file late, $25 per day up to $1,000 whcever is less |
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CONSUMER FINANCIAL SERVICES ACT (CFA) Prohibited Activities Actions when CFA violated Usury definition How they apply in Michigan |
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LICENSEES PROHIBITED FROM: *Doing business as a real esate broker or sales person *Acting as pawnbroker *Acting as debt mgmt company *Allowing a person to violate an order issued persuant to CFA ACTIONS: *Obtain declaratory judgment *Forbid person from doing practice *Recover damages, or $250 whichever is greater + attny fees & court costs USURY - interest charges in excess of the legal limit MICHIGAN USURY LAWS - apply to: *Conventional 1st lien may be made at any interest rate *2nd Mortgage limited to 25% interest per year **FHA/VA exempt from Michigan Usury Law** |
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