On April 4th, the CFPB dished out $15.4 million in fines to mortgage insurance companies for “illegal kickbacks” associated with captive re-insurance arrangements. I have anticipated this type of action from the CFPB for some time. This is the first action in a continuing effort by the CFPB to clean up the bad practices that were occurring when large national banks turned mortgage insurance and force-placed insurance, both tried and true risk transfer products, into fee income products.

In talking with these bankers, my conclusion is that they are not procrastinating, they simply don't know where to start. If you are in this group, you're not alone.

It is going to be interesting to see how the CFPB is going to enforce these new regulations.

We started a LinkedIn group last week named Banking & Force-Placed Insurance. The group was started to begin to share some of the compliance information regarding the guidance and litigation around force-placed insurance.

In our recent compliance webinar, we discussed the common denominators that make up the scrutiny from private litigation, government scrutiny and regulatory compliance. We took the details from each of these segments and combined them into a list that lenders need to know regarding their force-placed insurance program.