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Entries for category:   Consumer Financial Protection Bureau

 
Apr 22, 2014

CFPB proposes five-year extension for certain disclosure requirements of the international money transfer rule
 

On Tuesday, the Consumer Financial Protection Bureau (CFPB) proposed revisions to its international money transfer rule. The revisions "are intended to preserve the rule's new consumer protections while providing federally insured institutions, such as banks and credit unions, with additional time to provide exact disclosures in certain cases" (See our Jan 22, 2012, blog post – "CFPB sets new rules for international money transfers"). If finalized, the proposal would extend a temporary exception in which federally insured financial institutions can estimate third-party fees and exchange rules when providing remittance transfers to their accountholders for which they cannot determine exact amounts. The Dodd-Frank Act originally set the date of July 21, 2015. The proposal would extend the temporary exception by five years to July 21, 2015. For more, read the full news release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank   |   Permalink

 

Apr 17, 2014

CFPB releases guide to completing TILA-RESPA Integrated Disclosure forms
 

On Thursday, the Consumer Financial Protection Bureau (CFPB) released  its Guide to Completing TILA-RESPA Integrated Disclosure Forms (See our April 2, 2014, blog post for more information). The guide "provides instructions for completing the Loan Estimate and Closing Disclosure and also highlights common situations that may arise when completing the forms." The Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA) were first issued in January 2013 and amended through October; they take effect August 1, 2015. For more, access the guide.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Apr 14, 2014

CFPB orders Bank of America to provide $727 million in consumer relief for deceptive practices related to two credit card add-on products
 

The Consumer Financial Protection Bureau (CFPB) recently announced that it has ordered Bank of America and FIA Card Services to "provide an estimated $727 million relief to consumers harmed by practices" related to two add-on products – Credit Protection Plus and Credit Protection Deluxe – from 2010 through 2012.  In addition, the CFPB ordered Bank of America to pay a $20 million civil money penalty. With regard to billing practices, the CFPB found that Bank of America billed consumers for services they did not receive; unfairly charged consumers for interest and fees; illegally charged approximately 1.9 million consumer accounts; and failed to provide product benefits. With regard to deceptive marketing, the bureau found that Bank of America misled consumers about the cost of the first 30 days of coverage; the enrollment process for credit protection products; and the benefits of credit protection products. For more, read the full news release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal News   |   Permalink

 

Apr 10, 2014

CFPB launches new financial education program in local libraries nationwide
 

During remarks delivered at the Federal Reserve Bank of Chicago this week, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray announced a new pilot project – called the Community Financial Education Project – that will turn libraries across the country into "neighborhood centers of financial education." Director Cordray pointed to a study that found that "one-quarter of all computer users at public libraries log on either for commercial needs or to manage their financial affairs," making the choice of libraries as the bureau's financial knowledge centers an appropriate fit. The new project is a partnership involving the CFPB, the Institute of Museum and Library Services, the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Bank of Chicago and the U.S. Department of Agriculture's (USDA) Cooperative Extension System, as well as the Financial Industry Regulatory Authority (FINRA) Investor Education Foundation, the American Library Association (ALA) and local public libraries across the country. For more, read the full remarks.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal News  Federal Reserve System    |   Permalink

 

Apr 02, 2014

CFPB releases TILA-RESPA Integrated Disclosure rule compliance guide for small businesses
 

On Monday, the Consumer Financial Protection Bureau (CFPB) released a Small Entity Compliance Guide for the TILA-RESPA Integrated Disclosure rule that is designed to help lenders determine their federal mortgage disclosure compliance obligations for the mortgage loans they originate. The plain-language guide features a FAQ format to make it more accessible for industry constituents, "especially smaller businesses with limited legal and compliance staff." The Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA) were first issued in January 2013 and amended through October; they take effect August 1, 2015 (See our Dec 16, 2013, blog post for more information). For more, access the compliance guide.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal News  Federal Regulatory   |   Permalink

 

Mar 30, 2014

Deputy Controller for Community Affairs Bary Wides discusses collaboration between banks and CDFIs
 

In remarks delivered to the Memphis Community Development Financial Institution (CDFI) Network during an event hosted by the Federal Reserve Bank's Memphis Branch this week, Deputy Comptroller for Community Affairs Bary Wides outlined the keys to successful partnerships between banks and CDFIs. Certification by the U.S. Treasury Department can help CDFIs demonstrate "their mission orientation." He also described the ways in which CDFIs and banks can collaborate on economic development projects. The two can also utilize referral systems to help customers who do not meet one entity's qualifications – specifically with regard to banks that are "reluctant to make a mortgage loan to a customer because the loan would not meet the requirements for a Qualified Mortgage" (See our Feb 26 2014, blog post for more information). For more, read his full remarks.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Office of the Comptroller of the Currency    |   Permalink

 

Mar 26, 2014

Six federal agencies issued a proposed rule implementing minimum requirements for appraisal management companies
 

This week, six federal agencies – the Consumer Financial Protection Bureau (CFPB), the Federal Deposit Insurance Corporation (FDIC), the Federal Housing Finance Agency (FHFA), the Federal Reserve, the National Credit Union Administration (NCUA) and the Office of the Comptroller of the Currency (OCC) – issued a proposed rule that would "implement minimum requirements for sale registration and supervision of appraisal management companies (AMCs)" in accordance with provisions of the Dodd-Frank Act. These minimum requirements would "apply to states that elect to establish an appraiser certifying and licensing agency with the authority to register and supervise AMCs" and would not compel a state to establish an AMC registration or supervision program. There is no penalty imposed on any state that does not establish a regulatory structure for AMCs; however, "an AMC is barred by section 1124 from providing appraisal management services for federally related transactions in a state that has not established such a regulatory structure." Public comments will be accepted for 60 days. For more, read the full news release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Deposit Insurance Corporation  Federal News  Federal Regulatory  Federal Reserve System   National Credit Union Administration  Office of the Comptroller of the Currency    |   Permalink

 

Mar 25, 2014

New CFPB report analyzes consumer complaints about the debt collection market
 

The Consumer Financial Protection Bureau (CFPB) recently released a report on the 30,300 debt collection complaints that it received from consumers between July and December 2013. Being "hounded by debt collectors about debts they do not owe" was the top consumer complaint, accounting for more than one-third of all of the debt collection complaints received. Complaints regarding the "aggressive communication tactics used by debt collectors" made up nearly one-third of all of the complaints received. The third-highest topic, accounting for about 14 percent of the complaints, was the taking or threatening illegal action by debt collectors. On January 2, 2013, the bureau became the first federal institution to ever supervise the larger consumer debt collectors. During that year, the CFPB "pursued two debt collection enforcement actions" and, in November, released an Advanced Notice of Proposed Rulemaking (ANPR) as the first step toward creating new federal rules for the debt collection market (See our Nov 6, 2013, blog post for more information). For more, read the full report and news release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Mar 21, 2014

American Banker obtains confidential data showing racial disparities in CFPB employee evaluations
 

Recently leaked internal staff evaluations show racial disparities in the Consumer Financial Protection Bureau's (CFPB) workplace, according to "confidential agency data" obtained by American Banker. The data relates to the bureau's 2013 employee performance evaluation and ratings system, which shows that Caucasians "were twice as likely...to receive the agency's top grade than were African American or Hispanic employees." These performance reviews were "used to grant raises and issue bonuses." The newspaper reports that the acquired data indicates that "racial disparities can be just as easily identified within the CFPB's ranks as among the lenders the bureau regulates." Some lenders and critics of the agency say the data reveals hypocrisy considering the bureau's use of a "controversial legal theory known as disparate impact – the assertion that different results for different racial groups are themselves a type of wrongful bias, even if they are unintentional," the article said. For more, read the full story.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal News  Federal Regulatory   |   Permalink

 

Mar 21, 2014

U.S. House passes major overhaul to the CFPB that the Senate is expected to defeat
 

On February 27, 2014, the U.S. House of Representatives passed H.R. 3193 by a 232-182 vote to make significant changes to the Consumer Financial Protection Bureau (CFPB), according to the CFPB Monitor. With an indication from the White House that President Obama would veto the bill, many regard the passage of H.R. 3193 as a "political exercise" by Republicans that the Democratic-controlled Senate is expected to defeat. The bill, supported by the American Bankers Association, "incorporates five CFPB reform bills approved in November 2013 by the House Financial Services Committee." H.R. 3193 would replace the CFPB with a new entity called the Financial Product Safety Commission, which would consist of five members, including the vice chairman of supervision of the Federal Reserve System as well as four presidential appointees subject to Senate confirmation. At $300 million, the commission's budget for FYs 2014 and 2015 would be $200 million less than the bureau's appropriation for those two years, the article said. For more, read the full story.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal News  Federal Regulatory   |   Permalink

 

Mar 20, 2014

Updated location: CFPB will hold a field hearing on payday loans in Nashville on Tuesday, March 25th
 

The Consumer Financial Protection Bureau (CFPB) will hold a field hearing on payday loans on Tuesday, March 25th at 11 a.m. CDT in Nashville, Tennessee. The event was originally to be held in the Public Library Auditorium. The venue was changed and the event will now be held at the Country Music Hall of Fame. In addition to remarks from CFPB Director Richard Cordray, the event will also feature testimony from consumer groups, industry representatives and members of the public. The event is open to the public, but all attendees must RSVP. For more, including RSVP information, read the full news release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Mar 19, 2014

Seventh Circuit agrees with CFPB and FTC in FDCPA time-barred debt collection case
 

On March 11, 2014, the Seventh Circuit reversed the trial court’s dismissals of two Fair Debt Collection Practices Act (FDCPA) actions that challenged dunning (collection) letters offering to settle debts subject to the statute of limitations. Debt collectors often send dunning letters seeking repayment of time-barred debts and the Third and Eight Circuits have held that dunning letters of this type do not violate the FDCPA unless litigation is threatened.

The Seventh Circuit, however, has created a split as it held that offers to “settle” time-barred debts may falsely suggest that the debt is actually legally enforceable. McMahon v. LVNV Funding, LLC and Delgado v. Capital Mgt. Servs., LP, Nos. 12-3507, 13-2030 (7th Cir. Mar. 11, 2014). The court noted that the FDCPA prohibits “actions that the collector cannot take” and prohibits any “misleading representation” from being provided to consumers.  

Importantly, both the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) filed amicus briefs in McMahon. Both agencies have likewise filed supporting briefs in the Sixth Circuit case Buchanan v. Northland Group, Inc. No. 13-2523.  

At field meetings, Director Cordray has reiterated the CFPB’s focus on debt collection practices as illustrated by the CFPB’s Advance Notice of Proposed Rulemaking (ANPR) for regulating the debt collection industry. State attorneys general are following suit. Thus, it is critical for the debt collection industry and debt buyers alike to evaluate communications with consumers in light of these decisions.


 
Posted by A. Sharett in  Case Law Summary  Consumer Financial Protection Bureau   |   Permalink

 

Mar 14, 2014

CFPB announces three key senior positions
 

On Wednesday, the Consumer Financial Protection Bureau (CFPB) announced that three key senior positions had been filled: the assistant director for the office of research, the assistant director for the office of financial empowerment and the assistant director for the office of installment and liquidity lending markets.

Christopher D. Carroll joined the CFPB as the assistant director and chief economist for the Office of Research in the bureau's Research, Markets and Regulatory Division. Dr. Carroll is taking a leave of absence as a professor of economics at Johns Hopkins University to serve the bureau. He received his B.A. in economics from Harvard University and his Ph.D. from the Massachusetts Institute of Technology.

Daniel Dodd-Ramirez joined the CFPB as the assistant director of financial empowerment in the bureau's Consumer Education and Engagement Division. Dodd-Ramirez has a long history in social services, human resources and community organizing, having most recently served as the executive director of Step Up Savannah Inc. from 2005 to 2014. He received a B.S. in Hispanic studies from the University of Southern Maine and his M.A. in international/intercultural training from the School for International Training.

Jeffrey Langer joined the CFPB as the assistant director of installment and liquidity lending markets in the bureau's Research, Markets and Regulations Division. In addition to practicing law for several years, Langer is a founding fellow and treasurer of the American College of Consumer Financial Services Lawyers and is a former chair of the Consumer Financial Services Committee of the American Bar Association Business Law Section. Langer received a B.S. from the University of Illinois at Urbana-Champaign and his J.D. from the Northwestern University School of Law.

For more, read the full news release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Mar 10, 2014

CFPB has helped recover more than $1 million for servicemembers, veterans and their families since 2011
 

The Consumer Financial Protection Bureau (CFPB) recently reported that it has helped recover more than $1 million since July 2011 for servicemembers, veterans and their families that complained to the bureau about financial products or services. Since that date, the bureau has received more than 14,000 complaints from these groups, which came from every state, as well as every rank and branch of the Armed Services. These complaints were by and large in line "with those of the population at large." However, many complaints from these groups also addressed a few special financial protections accorded to them by federal laws. In the report, the bureau expressed concern with:

  • Aggressive and deceptive tactics used by the debt collection industry involving " contacting a servicemember’s military chain of command, threatening punishment under the Uniform Code of Military Justice, threatening to have a servicemember reduced in rank, or threatening to have a servicemember’s security clearance revoked."
  • Incorrect information provided by student loan servicers regarding the protections offered in the Servicemembers Civil Relief Act.
  • Skirting of interest rate limits provided in the Military Lending Act by payday loan companies.
  • Mortgage servicers' lack of knowledge about military-specific programs, such as those offered by the CFPB and other prudential regulators, including short-sale guidelines aimed at assisting servicemembers with Permanent Change of Station orders.
For more, read the full news release and report.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Mar 07, 2014

CFPB releases source code for its housing counselor location tool
 

In advance of the January 2014 implementation of its new mortgage rules, the Consumer Financial Protection Bureau (CFPB) last November launched a new tool designed to "help consumers find local housing counseling agencies to answer their questions or address their concerns" at little or no cost to the consumers (See our Nov 11, 2013, blog post for more information). The tool enables consumers to find their closest counseling agencies, provides contact information for HUD-approved counselors, displays services offered by each counseling agency and indicates the languages in which each housing counseling agency offers services. Then last Thursday, the bureau announced that it was publishing open source code that lenders can use to build their own tools that will allow a user to find the 10 closest HUD-approved housing counselors to a loan application's location and print or save the results. For more, access the source code here.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Mar 05, 2014

CFPB urges credit reporting companies to make credit scores freely available to consumers
 

A report recently released by the Consumer Financial Protection Bureau (CFPB) found that accuracy issues are the top consumer complaint about the credit reporting industry. As a result, the bureau is calling on the biggest credit reporting agencies to "make credit scores and related content freely available to their consumers." The top three concerns are incorrect information on a credit report, frustration with the credit reporting company's investigation and difficulty obtaining a credit report or score. The CFPB also published a supervisory bulletin "warning companies that provide information to credit reporting agencies not to avoid investigating consumer disputes." For more, read the full news release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Mar 03, 2014

CFPB Director Richard Cordray outlines the bureau's efforts to improve the credit reporting industry
 

During remarks given at a recent Consumer Advisory Board meeting, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray discussed the "tremendous and growing influence" that credit scores have over consumers' lives, describing the duty to assure that "such personal financial information is updated timely and accurately, and that it is maintained securely" as a critical responsibility. In addition to accepting consumer complaints and helping consumers to "get their issues addressed," the CFPB is also now exercising supervisory authority over "companies that account for 90 percent of the annual receipts in [the credit reporting] market." It also moved the three major credit reporting companies to upgrade the system used for communicating consumer disputes to allow consumers to upload relevant documents. For more, read the full remarks.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Feb 28, 2014

CFPB's first enforcement action against the for-profit college industry targets ITT
 

The Consumer Financial Protection Bureau (CFPB) on Wednesday announced that it has filed a lawsuit against the Indiana-based, for-profit college ITT Educational Services, Inc., alleging the company "exploited its students and pushed them into high-cost private student loans that were very likely to end in default." The bureau is seeking restitution for victims, a civil fine and an injunction against ITT. CFPB Director Richard Cordray described the lawsuit, which is the bureau's first public enforcement action against a company in the for-profit college industry, as a warning to the industry that the bureau "will be vigilant about protecting students against predatory lending practices." In the lawsuit, the bureau alleges that ITT pressured students into predatory, high-cost loans by having its financial aid staff rush them through an automated application process. Also, because the credits earned at ITT typically did not transfer to other institutions, the CFPB alleges ITT "used the prospect of expulsion and the loss of they money already spent during the student's first year to coerce students into taking out" additional private loans necessary to cover the cost of tuition. The bureau alleges ITT misled student to believe they were likely to "land good jobs and enough salary to repay their private student loans," knowing that a majority would default. For more, including the complaint, read the full news release and Director Cordray's prepared remarks.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Feb 27, 2014

CFPB Director Richard Cordray stresses the value of collaboration between the bureau and state agencies
 

During the winter meeting of the National Association of Attorneys General in Washington, D.C., last week, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray encouraged the attendees to consider sharing information and pooling their efforts with the bureau to better and more productively handle constituent concerns regarding consumer complaints. In that vein, the bureau has "begun working with several states to give them real-time access to [the CFPB's] growing database of consumer complaints." He said that the bureau is now able to "provide complaint information to state agencies through a secure government portal" that enables state agencies to review complaints and to search and filter them by company, product and issue. Attorneys general in California, Oregon, Texas and Virginia have partnered with the CFPB on these efforts, as well as banking regulators in 14 states. For more, read the full prepared remarks.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Feb 25, 2014

CFPB orders 1st Alliance Lending to pay $83,000 for self-reported RESPA violations
 

On Monday, the Consumer Financial Protection Bureau (CFPB) ordered 1st Alliance Lending, LLC to pay an $83,000 civil money penalty for self-reported violations of the Real Estate Settlement Procedures Act (RESPA). The Connecticut mortgage lender, which "focuses primarily on providing loss-mitigation financing to distressed borrowers," obtains troubled mortgages from mortgage servicers and "reaches out to consumers to offer them new loans with reduced principal amounts under federally related mortgage programs." The company notified the bureau in 2013 that it believed it had violated RESPA by paying unearned origination and loss-mitigation fees to a hedge fund after it had ended its arrangement with the hedge fund and its affiliates. The hedge fund affiliates received payments from 83 1st Alliance loans made between August 2011 and April 2012. For more, read the full news release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Feb 21, 2014

Banks fight back against federal regulators' plan to monitor checking overdraft fees
 

In a report released last June, the Consumer Financial Protection Bureau (CFPB) found that opting-in to overdraft coverage puts consumers at risk in part due to the fact that most banks have adopted automated systems for assigning overdraft fees (See our June 12, 2013, blog post for more information). The bureau, the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller jointly proposed last year that "all institutions include detailed breakdowns of their revenue from account fees in the public quarterly reports they file with the FDIC," Bloomberg reports. In response to complaints from small banks, which "earn a larger slice of their revenue" from checking account fees, the FDIC and OCC broke ranks with the bureau and opposed the change. Then last month, federal regulators released a revised version of the plan, which "would exempt banks with assets under $1 billion." Despite this change, the Independent Community Bankers of America trade group still opposes it, describing it as the "latest in a long line of new regulatory burdens faced by" small institutions. The group is asking federal regulators to exempt all institutions with total consolidated assets of less than $10 billion, the article said. For more, read the full story.
 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Deposit Insurance Corporation  Federal Regulatory  Federal Reserve System   Office of the Comptroller of the Currency    |   Permalink

 

Feb 19, 2014

CFPB deputy director delivers tough compliance message during the MBA's mortgage servicing conference
 

Consumer Financial Protection Bureau (CFPB) Deputy Director Steven Antonakes delivered prepared remarks during the Mortgage Bankers Association's National Mortgage Servicing Conference & Expo in Orlando today in which he said he was "deeply disappointed by the lack of progress the mortgage servicing industry has made" since the financial crisis, noting that the "fundamental rules" of mortgage servicing have "changed forever" and that the bureau is "ready, willing and able to vigorously enforce" the new bar it has set regarding the treatment of American consumers. With one in 10 homeowners still underwater and two million households at high risk for foreclosure, he said the bureau's work is "far from over." Antonakes highlighted how the Loan Originator Compensation rule and the Ability to Repay (QM) rule aim to clean up the mortgage market by restricting certain practices and helping borrowers know where they stand (See our Jan 10, 2014, blog post for more information). The deputy director said the bureau has been and continues to be responsive to "critical operational or interpretive issues" related to implementation of the new rules and he outlined the bureau's specific expectations for compliance. For more, read the full prepared remarks.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Feb 17, 2014

New feedback system introduced for recipients of military-related education benefits
 

The Consumer Financial Protection Bureau (CFPB) recently joined the departments of Veterans Affairs, Defense, Education and Justice, as well as the Federal Trade Commission (FTC) to announce the new VA GI Bill Feedback System. Modeled after the CFPB's complaint system, this new tool is designed to help the government identify and address unfair, deceptive and misleading practices with regard to education institutions and training programs administering the Post-9/11 GI Bill, DoD Military Tuition Assistance and other military-related education benefit programs. The tool was created out of Executive Order 13607:  Establishing Principles of Excellence for Educational Institutions Serving Service Members, Veterans, Spouses, and Other Family Members, which President Barack Obama signed in April 2012. For more, read the full news release and access the VA GI Bill Feedback System.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Feb 12, 2014

Article by Bricker & Eckler partner Anthony Sharett addresses uncertainties regarding enforcement of the newly enacted CFPB rules
 

In the February 2014 issue of Mortgage Compliance Magazine, Bricker & Eckler partner Anthony Sharett recently addressed considerations and potential issues related to the Consumer Financial Protection Bureau's (CFPB) enforcement of its newly enacted rules. With the Ability-to-Repay and Qualified Mortgage requirements effective as of January 10, 2014, now is an opportune time to review CFPB Bulletin 2013-06 from June 2013, which outlines the bureau's Responsible Business Conduct expectations of supervised entities: self-policing, self-reporting, remediation and cooperation. However, because the bureau is a new agency with little history regarding enforcement actions, it is virtually impossible for lenders to determine beforehand how the bureau will treat minor and major violations of the new mortgage rules, particularly those that occur this year. For more, read the full story.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Feb 11, 2014

CFPB moves to expand and streamline reporting requirements under HMDA
 

The Consumer Financial Protection Bureau (CFPB) recently unveiled a new online tool designed to "make it easier to navigate the publicly available" Home Mortgage Disclosure Act (HMDA) dataset, which is the leading source of information about the mortgage market. The Dodd-Frank Act transferred HMDA rulemaking authority to the CFPB and mandated that the bureau "expand the HMDA dataset to include additional loan information that would be helpful in spotting troublesome trends." To do this, the bureau is convening a Small Business Review Panel to help expand the data that financial institutions are required to provide. The CFPB is looking to add information related to: the length of the loan; total points and fees; the length of any teaser or introductory interest rates; and the applicant or borrower's age and credit sore. In addition, the agency is considering asking financial institutions "to include more underwriting and pricing information, such as the interest rate, the total origination charges, and the total discount points of the loan." Finally, the bureau is considering requiring institutions to include an explanation of rejected loan applications, information as to whether the lender considered the loan a Qualified Mortgage, and the borrower's debt-to-income ratio.

The bureau is asking for feedback on ways it can streamline reporting by aligning HMDA data requirements "with well-established data standards already in use by a significant portion of the mortgage market." It is also requesting feedback on a proposal to require all banks and nonbanks to report if they make 25 or more loans in a year, and is developing a way to streamline data submission and editing processes for lenders by "creating an interface that will allow lenders to connect their software to a CFPB intake system."

For more, read the full news release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank   |   Permalink

 

Feb 08, 2014

OCC issues updated "Mortgage Banking" booklet addressing new CFPB rules
 

The Office of the Comptroller of the Currency (OCC) recently issued the "Mortgage Banking" booklet of the Comptroller's Handbook, which updates a similarly titled booklet that was issued in March 1996 with examination procedures issued in March 1998. The booklet also replaces section 750 of "Mortgage Banking," which was "issued in November 2008 as part of the former Office of Thrift Supervision's (OTS) Examination Handbook for the examination of federal savings associations (FSA)." It applies to all banks engaged in mortgage banking activities and addresses the nature, general requirements and core examination procedures regarding the Consumer Financial Protection Bureau's (CFPB) recently imposed requirements related to mortgage servicing standards, loan origination compensation parameters, the Secure and Fair Enforcement of Mortgage Licensing (SAFE) Act of 2008, and ability-to-repay requirements (See our Jan 30, 2014, blog post – "Bricker & Eckler partner Anthony Sharett discusses how new CFPB regulations are impacting consumers and the banking industry"). For more, read the full OCC bulletin.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory  Office of the Comptroller of the Currency    |   Permalink

 

Feb 06, 2014

Bricker & Eckler partner Anthony Sharett discusses the significance of the CFPB's move to regulate the debt collection industry
 

Bank Safety & Soundness Advisor recently published an article assessing the significance and potential impacts of the Consumer Financial Protection Bureau's (CFPB) recently released Advance Notice of Proposed Rulemaking (ANPR) for regulating the debt collection industry (See our Nov 6, 2013, blog post – "CFPB is considering rules for debt collection"). Among several financial industry experts who provided insight into the issue was Bricker & Eckler partner Anthony Sharett, who commented on the apparent determination of the bureau to regulate the industry, describing its efforts as a "watershed moment." For more, read the full story (subscription required).


 
Posted by K. Warmsby in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Jan 30, 2014

Bricker & Eckler partner Anthony Sharett discusses how new CFPB regulations are impacting consumers and the banking industry
 

Bricker & Eckler partner Anthony Sharett recently did a Q&A session with Columbus Business First reporter Evan Weese on the Consumer Financial Protection Bureau's (CFPB) performance so far, as well as the impact of its newly enacted Qualified Mortgage (QM)/Ability to Repay regulations. Anthony gave the bureau a B grade for its consumer protection efforts, while acknowledging the extreme difficulties the banking industry face regarding compliance deadlines for these new regulations. For more, read the full story.


 
Posted by K. Warmsby in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Jan 29, 2014

CFPB alleges New Jersey-based PHH Corporation engaged in mortgage insurance kickbacks for at least 15 years
 

The Consumer Financial Protection Bureau (CFPB) today announced that it has initiated an administrative proceeding against and is seeking a civil fine, a permanent injunction to prevent future violations and victim restitution from the New Jersey-based PHH Corporation as well as its residential mortgage origination subsidiaries, PHH Mortgage Corporation and PHH Home Loans LLC, and its wholly-owned subsidiaries, Atrium Insurance Corporation and Atrium Reinsurance Corporation, for their involvement in a mortgage insurance kickback scheme that started as early as 1995. An investigation into the matter was initiated by the Office of Inspector General at the Department of Housing and Urban Development (HUD) and was transferred to the CFPB in July 2011. Based on its investigation, the bureau determined that from 1995 to at least 2009, "PHH manipulated its allocation of mortgage insurance business to maximize reinsurance payments for itself" by using mortgage reinsurance arrangements "to solicit and collect illegal kickback payments and unearned fees" through its affiliates in exchange for the referral of private mortgage insurance business. The bureau alleges that PHH collected hundreds of millions of dollars in kickbacks over the approximately 15-year scheme; that PHH in some cases "charged more money for loans to consumers who did not buy mortgage insurance from one of its kickback partners"; and that it pressured mortgage insurers to "purchase" its reinsurance "with the understanding or agreement that the insurers would then receive borrower referrals from PHH." In 2013, the bureau reached settlements with five mortgage insurers who "participated in similar schemes" (See our Jan 17, 2014, blog post – "CFPB orders the Fidelity Mortgage Corporation to pay $81,076 for an illegal kickback scheme"). For more, read the full news release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Jan 28, 2014

CFPB advises consumers on how to protect themselves from potential fraud
 

In light of the data breaches that have "exposed millions of payment card accounts to potential fraud" in recent months, the Consumer Financial Protection Bureau (CFPB) on Monday released an advisory to help consumers not only protect themselves from fraud, but also provide guidance on where to get help if they suspect their information has been compromised. In addition to payment card accounts, these data breaches also involve the theft of "millions of consumers' names, phone numbers, emails, and addresses." Consumers are advised to take the following steps to help protect themselves from fraud:

  • Monitor accounts for unauthorized charges or debits. Fraudulent activity can be a very small charge that occurs months after the information is stolen.
  • Alert bank or card providers immediately if fraud is suspected. If fraudulent charges appear, "the consumer should ask the card provider to close access to the account and issue a new card before more transactions come through."
  • Follow up with the bank or card provider and maintain detailed records of all contact with these entities.
  • Avoid scams that ask for personal information over email or by phone. Known as "phishing," scammers use this method to verify account information. To prevent it, "ask for a call-back number to verify the requestor is actually their financial institution."
For more, read the full news release and consumer advisory.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Jan 27, 2014

CFPB proposes rule to oversee larger nonbank providers of international money providers
 

The Consumer Financial Protection Bureau (CFPB) recently proposed a rule that would expand its authority to assess the largest banks' and credit unions' compliance with the Remittance Rule to include "any nonbank international money transfer provider that provides more than one million international money transfers annually" (See our Jan 22, 2012, blog post – "CFPB sets new rules for international money transfers") International money transfers were generally not covered by federal consumer protection regulations before the Dodd-Frank Act, which created the agency. The proposed rule "would bring new oversight to about 25 of the largest providers in the market," enabling the bureau to ensure that these nonbanks offer the following consumer protections:

  • Better disclosures regarding exchange rates, fees, the amount of money that will be delivered abroad, and the date the money will be available.
  • The ability to cancel a remittance within 30 minutes of payment "regardless of the reason the consumer wants to cancel."
  • Holding remittance transfer providers accountable for certain types of errors and requiring that they investigate and correct certain errors should a remittance sender report a problem within 180 days. "Companies that provide remittance transfers may also be responsible for mistakes made by their agents."
For more, read the full proposed rule and news release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal News  Federal Regulatory   |   Permalink

 

Jan 22, 2014

U.S. House subcommittee holds hearing on the potentially negative impacts of the CFPB's QM Rule
 

CFPB Monitor recently reported on a U.S. House of Representatives Subcommittee on Financial Services hearing held this month in which "[f]our lender representatives and one consumer law nonprofit testified about the necessity to consider changes" to the Qualified Mortgage (QM) Rule. During the hearing, titled "How Prospective and Current Homeowners Will Be Harmed by the CFPB's Qualified Mortgage Rule," Republicans claimed that "the QM Rule may eliminate non-QM loans, which would impair the ability of lenders to work with borrowers on an individual basis," while Democrats held that the QM Rule is necessary to "protect borrowers against predatory lender practices." The following witnesses testified:

  • Michael D. Calhoun, President of the Center for Responsible Lending
  • Bill Emerson, CEO of Quicken Loans, Inc., on behalf of the Mortgage Bankers Association
  • Jack Hartings, President and CEO of The Peoples Bank Co., on behalf of the Independent Community Bankers of America
  • Frank Spencer, President and CEO of Habitat for Humanity of Charlotte, North Carolina
  • Daniel Weickenand, CEO of Orion Federal Credit Union, on behalf of the National Association of Federal Credit Unions
For more, read the full CFPB Monitor post.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Jan 17, 2014

CFPB orders the Fidelity Mortgage Corporation to pay $81,076 for an illegal kickback scheme
 

On Thursday, the Consumer Financial Protection Bureau (CFPB) ordered the Fidelity Mortgage Corporation, a St. Louis-based non-depository mortgage lender, and its current president, Mark Figert, to pay $81,076 for violations of the Real Estate Settlement Procedures Act (RESPA). The bureau said that Fidelity entered into an agreement with a bank in which the bank referred potential borrowers in exchange for illegal kickbacks. Fidelity and Figert are required to pay back $27,076 – all of the company's proceeds from the unlawfully referred business – as well as a $54,000 civil penalty to the bureau. RESPA "prohibits giving and receiving kickbacks for referrals of settlement-service business involving federally-related mortgages." For more, read the full news release and the bureau's consent order.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Jan 16, 2014

CFPB is accepting applications for positions on its advisory groups
 

On Wednesday, the Consumer Financial Protection Bureau (CFPB) announced that it will accept applications for positions on its advisory groups – the Consumer Advisory Board (CAB), the Credit Union Advisory Council (CUAC) and the Community Bank Advisory Council (CBAC) – until February 28, 2014. The Dodd-Frank Act, which created the bureau, also required that the CAB be established "to advise and consult with the bureau's director on a variety of consumer financial issues." The CBAC and CUAC were created "to ensure that the bureau receives feedback from community banks and credit unions with asset sizes below $10 billion that are not under the CFPB's supervision," but that might still be affected by its regulations. For more, read the full news release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Jan 10, 2014

CFPB updates its mortgage origination and servicing exam procedures as its new mortgage rules take effect
 

Today, the Consumer Financial Protection Bureau (CFPB) released updates to its mortgage origination exam procedures and mortgage servicing exam procedures in order to "harmonize existing procedures for handling mortgage origination and mortgage servicing examinations with the revised interagency procedures" that address the new mortgage regulations that went into effect today (See our Jan 7, 2014, blog post for more information). CFPB Director Richard Cordray delivered remarks during a field hearing in Phoenix today, wherein he outlined the rationale for the rules. For more, read his full prepared remarks and access the CFPB Supervision and Examination Manual – Version 2.0.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank   |   Permalink

 

Jan 07, 2014

CFPB releases informational resources on its new mortgage rules
 

As part of its campaign to educate the public about its new mortgage rules that go into effect on January 10, 2014 (See our Dec 18, 2013, blog post for more information), the Consumer Financial Protection Bureau (CFPB) today released the following informational resources:
  • Mortgage tips on new rights for homebuyers and homeowners at every stage of the mortgage process under the new rules;
  • Answers to consumers' mortgage-related questions through an interactive online tool called askCFPB;
  • A tool to help consumers find local housing counseling agencies;
  • A fact sheet overview of the new consumer protections in the bureau's mortgage rules and a summary of the new procedures for facilitating borrowers' access to foreclosure avoidance options; and
  • A reference guide for housing counselors and others who interact with consumers who are struggling with paying their mortgage.
In addition to English, print copies of these mortgage resources can be ordered in Spanish, Tagalog, traditional Chinese, Haitian Creole, French, Korean and Vietnamese. CFPB Director Richard Cordray discussed details of the new mortgage rules during an event held by the National Association of Realtors recently, including the Qualified Mortgage rule and the Ability-to-Repay rule. For more, read the full news release and prepared remarks.
 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Jan 06, 2014

CFPB releases fact vs. fiction guide to its new mortgage rules
 

With its new mortgage rules set to take effect on January 10, 2014, the Consumer Financial Protection Bureau (CFPB) today released a fact vs. fiction guide to "help dispel some of the most common misconceptions" about what the Ability-to-Repay rule and the Qualified Mortgage rule actually mean for consumers. Among the issues addressed in this document include concerns that consumers' access to credit will be cut off due to the Qualified Mortgage standards, excessive documentation requirements will make it difficult for consumers in unusual financial situations to qualify for a mortgage and that mortgage brokers and lenders are going to suffer because they are not prepared for these new rules. For more, read the full CFPB blog entry and access the fact vs. fiction guide.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Dec 27, 2013

Ohio colleges and affiliated groups among the entities listed in a recent CFPB report on college financial agreements
 

An annual report on college credit card agreements recently released by the Consumer Financial Protection Bureau (CFPB) showed a decline of 23 percent in college agreements from 2011 to 2012 (See our Dec 10, 2013, blog post for more information). The study includes a list of all such agreements, including those eliminated before January 1, 2012. Columbus Business First reports that an agreement between "the Ohio State University Alumni Association Inc. and FIA Card Services NA, a unit of Bank of America Corp. no longer was in effect on that date," but that throughout 2011, "13,750 accounts were open and a total $142,000 was paid from FIA to the alumni group." Some of Ohio's colleges and affiliated groups continue to have these relationships with financial institutions, "including Otterbein College and a number of fraternities and sororities at Miami University," the article said. For more, read the full story.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Ohio News   |   Permalink

 

Dec 26, 2013

CFPB orders American Express to refund $59.5 million to 335,000 consumers for unfair billing tactics and deceptive marketing with respect to credit card add-on products
 

The Consumer Financial Protection Bureau (CFPB) today announced the fourth action it has taken to address illegal practices with respect to credit card add-on products. The agency ordered American Express to refund an estimated $59.5 million to more than 335,000 consumers for illegal card practices including "unfair billing tactics and deceptive marketing with respect to add-on products such as payment protection and credit monitoring." In addition to the $9.6 million in civil penalties that American Express must pay to the CFPB, the Federal Deposit Insurance Corporation (FDIC) is fining American Express Centurion Bank $3.6 million and the Office of the Comptroller of the Currency (OCC) if fining American Express Bank, FSB $3 million.

CFPB examiners found that from 2000 to 2012, "three of American Express's subsidiaries and their vendors and telemarketers engaged in misleading and deceptive tactics to sell some of the company's credit card add-on products." According to the bureau, American Express misled consumers:

  • That the Account Protector product would cancel the consumer's minimum monthly payment should he or she encounter a qualifying life event when, in reality, "the benefit payment would be limited to 2.5 percent of the consumer's outstanding balance."
  • That the length of coverage for the Account Protector product would last up to 24 months when, in reality, only two of the 13 qualifying events had benefit periods that long, while the rest maxed out within one to three months.
  • That the consumer would not incur a fee for payment protection plans if he or she paid off the balance every month; however, the account balance "had to be paid off before the end of the billing cycle, which was an earlier date than the consumer's statement due date."
  • That Puerto Rico consumers did not receive adequate or uniform information about the Lost Wallet product, which prevented them from taking the steps necessary to "receive and access the full product benefits."
American Express also engaged in unfair billing practices related to its add-on products when it:
  • Billed consumers for identity protection add-on products without informing consumers that they needed to complete a second step in the enrollment process to obtain all of the advertised benefits.
  • Unfairly charged consumers fees for exceeding their credit card account limits due to monthly fees and interest charges on fees for services that were never received.
  • Failed to make the required disclosure when telemarketing offers of free credit reports that consumers have a right to a free credit report from a federally authorized source.
In addition to the $59.5 million that the CFPB has ordered American Express to refund to approximately 335,000 consumers and the $9.6 million fine it has ordered the company to pay to the CFPB Civil Penalty Fund, the bureau is also ordering American Express to stop deceptive marketing; end unfair billing practices; provide refunds or credits without any further action by consumers; submit to an independent review; hire a third-party to review its other credit card add-on products; and improve oversight of third-party vendors.

For more, read the full news release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Deposit Insurance Corporation  Office of the Comptroller of the Currency    |   Permalink

 

Dec 22, 2013

Six federal financial regulatory agencies extend the comment period for a proposed policy statement on assessing the diversity policies and practices of regulated entities
 

Six federal financial regulatory agencies – the Federal Reserve, the Consumer Financial Protection Bureau (CFPB), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC) and the Securities and Exchange Commission (SEC) – extended the comment period for their proposed policy statement for assessing the diversity policies and practices of the institutions they regulate from December 24, 2013, to February 7, 2014. The agencies are doing this to allow the public more time to analyze the issues and prepare their comments regarding the proposed policy statement, which is "intended to promote transparency and awareness of diversity policies and practices within federally regulated financial institutions." For more, read the full news release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Deposit Insurance Corporation  Federal Reserve System   National Credit Union Administration  Office of the Comptroller of the Currency    |   Permalink

 

Dec 21, 2013

Six federal financial regulatory agencies issue a final rule to exempt some higher-priced mortgage loans from appraisal requirements
 

In an effort intended to "save borrowers time and money" while still ensuring that their higher-priced mortgage loans are financially sound, six federal agencies – the Consumer Financial Protection Bureau (CFPB), the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), the Federal Housing Finance Agency (FHFA), the National Credit Union Administration (NCUA) and the Office of the Comptroller of the Currency (OCC) – issued a final rule today that exempts loans of $25,000 or less as well as certain streamlined refinancings from the Dodd-Frank Act's appraisal requirements. These requirements were finalized in January 2013 (See our Jan 19, 2013, blog post for more information). Because manufactured homes "present unique issues in determining the appropriate valuation method," the appraisal requirement for manufactured homes will not become effective for 18 months – July 18, 2015. For more, read the full news release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank   |   Permalink

 

Dec 20, 2013

CFPB and the DOJ order Ally Financial Inc. to pay $80 million to 235,000 minority borrowers for discriminatory auto loan pricing
 

Today, the Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ) ordered the federal government's largest auto loan discrimination settlement in history when it ordered Michigan-based Ally Financial Inc. and Ally Bank to pay $80 million in damages to 235,000 harmed African American, Hispanic, and Asian and Pacific Islander borrowers, as well as $18 million in penalties. A CFPB investigation that began in September 2012 revealed that as an indirect auto lender, Ally failed to implement an effective compliance program to monitor its loan portfolio for discrimination (See our March 22, 2013, blog post for more information). The investigation found that Ally violated both CFPB regulations and the Equal Credit Opportunity Act (ECOA) by allowing auto dealers to charge a higher interest rate for minority borrowers' auto loans than for similarly situated non-Hispanic white borrowers. In addition to the aforementioned $80 million in damages and $18 million in penalties, under the order Ally must pay to hire a settlement administrator to distribute the funds to victims and and it must either monitor dealer markups to prevent future discrimination or eliminate dealer markups altogether. For more, including the full text of the consent order, read the full news release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Dec 19, 2013

CFPB and 49 state authorities filed a proposed court order requiring the Ocwen Financial Corporation to provide $2 billion in relief to homeowners and $125 million in refunds to foreclosure victims
 

The Consumer Financial Protection Bureau (CFPB) today announced that it has partnered with authorities in 49 states to file a proposed court order requiring Ocwen Financial Corporation and its subsidiary, Ocwen Loan Servicing, to provide $2 billion in principal reduction to underwater borrowers, to refund $125 million to foreclosure victims and to adhere to significant new homeowner protections. When the bureau opened in July 2011, the Federal Trade Commission referred its investigation of the publicly traded Florida corporation, which specializes in servicing subprime or delinquent loans and places a major emphasis on resolving delinquency through loss mitigation or foreclosure, to the new agency. The bureau's investigation uncovered substantial evidence that Ocwen, headquartered in Atlanta, violated state laws and the Dodd-Frank Act, including evidence that the company took advantage of homeowners with servicing shortcuts and unauthorized fees; deceived customers about foreclosure alternatives and improperly denied loan modifications; and engaged in illegal foreclosure practices. In addition to the aforementioned refund and loan modification relief payments, the CFPB is also proposing that the company stop robo-signing official documents and adhere to significant new homeowner protections, including properly processing pending requests; honoring previous loan modification agreements; ensuring continuity of contact for customers; restricting servicing fees; and notifying customers of loss mitigation options and restricting dual tracking. For more, read the full news release and a factsheet about the proposed order.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank   |   Permalink

 

Dec 18, 2013

CFPB launches nationwide campaign to educate the public about impending mortgage rules
 

In preparation for the January 10, 2014, implementation date of the Consumer Financial Protection Bureau's (CFPB) new mortgage rules, the bureau has launched a nationwide campaign to educate the public about the new protections (See our Dec 16, 2013, blog post for more information). The CFPB released educational materials covering the following topics: guidance for housing counselors; mortgage tips for homebuyers and homeowners; answers to consumer questions; consumer tools; and factsheets on the rules. For more, including links to these materials, read the full news release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Dec 17, 2013

CFPB's first action against an online servicer targets CashCall
 

This week, the Consumer Financial Protection (CFPB) took its first action against an online servicer, alleging in a complaint that California-based CashCall, its subsidiary, WS Funding LLC, and its affiliate, Delbert Services Corporation, a Nevada collection agency (all under the common ownership of J. Paul Reddam) violated the bureau's prohibitions on unfair, deceptive and abusive acts and practices. Beginning in late 2009, "CashCall and WS Funding entered into an arrangement with Western Sky Financial, a South Dakota-based online lender" that "asserted state laws did not apply to its business because it was based on an Indian reservation and owned by a member of the Cheyenne River Sioux Tribe." Although investigations and court actions by several states pushed Western Sky to shut down its operations in September 2013, CashCall and Delbert continued withdrawing monthly installments from consumers' bank accounts. The CFPB alleges that under statutes in at least eight of the states in which Western Sky had violated either licensing requirements, interest rate caps or both, "any obligation to pay such loans was rendered void or otherwise nullified in whole or in part by law." The bureau is seeking to have all money refunded, and is also seeking additional damages and civil penalties. For more, read the full news release and complaint.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Dec 17, 2013

CFPB calls on schools to include debit, prepaid and other products in their disclosures about financial agreements
 

As part of its ongoing efforts to bring transparency to the student financial products market, the Consumer Financial Protection Bureau (CFPB) today released its mandated annual report on college credit card agreements, which "showed a decline of 23 percent in college agreements from 2011 to 2012" (See our Dec 3, 2013, blog post for more information). The number of college cards in effect declined by 41 percent between 2002 and 2012, from 1,045 agreements in effect for over two million accounts to 617 agreements existing for just over one million accounts. The amount paid to institutions of higher education by credit card issuers declined 40 percent during that period, from $84,462,767 in 2009 to about $50,396,103 in 2012. The bureau is also calling on institutions of higher learning to expand beyond their disclosures regarding college credit card information to include the debit, prepaid and other products that it markets to students in agreement with financial institutions. Initial results from an inquiry into these products that the bureau launched earlier this year indicate that "financial product marketing partnerships have shifted to student checking and debit and prepaid card products," which outnumber college credit card agreements. Based on these initial findings, the bureau also concluded that "arrangements between financial institutions and institutions of higher education on many student banking products are not well-understood." For more, read the full news release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Dec 16, 2013

CFPB releases updates to its Mortgage Rules Readiness Guide
 

The Consumer Financial Protection Bureau (CFPB) recently released updates to its Mortgage Rules Readiness Guide that include changes to final rules issued by the bureau through October 15, 2013, covering both the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA). The new mortgage regulations were first issued in January 2013 and were amended through October. The guide serves to help financial institutions and other industry participants "evaluate their readiness for the 2013 mortgage rule changes," which are set to take effect in January 2014 (See our Nov 27, 2013, blog post for more information). For more, access the Mortgage Rules Readiness Guide.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Dec 12, 2013

CFPB announces enforcement action against a GE Capital Retail Bank subsidiary for deceptive credit card practices
 

After receiving hundreds of complaints from CareCredit borrowers who claimed to have received "an inadequate explanation of the terms" of a deferred interest credit card, the Consumer Financial Protection Bureau (CFPB) this week ordered General Electric Capital Retail Bank and its subsidiary, CareCredit, to "refund up to $34.1 million to potentially more than one million consumers who were victims of deceptive credit card enrollment tactics." According to the bureau, CareCredit's lack of oversight allowed service providers to mislead consumers by failing to adequately explain that these "no interested if paid in full" credit cards were not actually interest-free cards, but instead a "deferred-interest product with a 26.99 percent interest rate." The bureau found evidence that CareCredit failed to provide adequate disclosures on the terms of the agreement, with many consumers given only oral explanations. Finally, the bureau determined that CareCredit failed to properly train the staff members in health care offices, who were primarily selling the plans. In addition to the reimbursement fund, the CFPB is ordering CareCredit to enhance consumer disclosures and improve the consumer experience with service providers. For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Dec 11, 2013

CFPB study shows that large banks commonly use arbitration clauses to prevent consumers from participating in class actions
 

Preliminary results from the first phase of a study undertaken and released last week by the Consumer Financial Protection Bureau (CFPB) indicate that "arbitration clauses are commonly used by large banks in credit card and checking account agreements and that roughly nine out of ten clauses allow banks to prevent customers from participating in class actions." The bureau first launched a public inquiry into "the use of pre-dispute arbitration clauses in consumer financial markets" in April 2012, having been mandated to undertake the study as part of the Dodd-Frank Act of 2010, which itself established the bureau. The results indicate that larger institutions are more likely than banks or credit unions to use arbitration clauses in consumer contracts for credit cards or checking accounts; that, compared with the rest of the contract, arbitration clauses are almost always more complex and "written at a higher grader level"; of the 90 percent of arbitration clauses studied that expressly bar consumers from filing class action arbitrations, the majority were for large banks, meaning that "almost all of the market that is subject to arbitration is also subject to terms that effectively preclude class actions in court or in arbitration"; that consumers do not choose arbitration over class action settlements; consumers do not file arbitrations for small-dollar disputes; and that few consumers file small claims court actions. For more, read the full press release and study.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank   |   Permalink

 

Dec 03, 2013

New rule expands CFPB's regulatory authority over larger nonbank student loan servicers
 

Today, the Consumer Financial Protection Bureau (CFPB) announced a new rule that allows the bureau to "supervise certain nonbank student loan servicers for the first time." The bureau previously oversaw student loan servicing at the largest banks, but today's rule "expands that supervision to any nonbank student loan servicer that handles more than one million borrower accounts, regardless of whether they service federal or private loans" (See our March 18, 2013, blog post for more information). Under this new rule, which was proposed in March, CFPB estimates that it will "have authority to supervise the seven largest student loan servicers." Combined, these companies service the loans of more than 49 million borrower accounts, which is most of the student loan servicing market. For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Nov 27, 2013

CFPB releases updates to exam procedures for its revised mortgage rules
 

The Consumer Financial Protection Bureau (CFPB) recently released updates to its exam procedures for the new mortgage regulations that were issued in January and finalized in October (See our Oct 21, 2013, blog post for more information). These updates "offer financial institutions and other industry participants valuable guidance" on how the bureau will conduct examinations for compliance with the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). For more, read the CFPB Supervision and Examination Manual.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Nov 20, 2013

CFPB finalizes easier-to-use mortgage disclosure forms
 

Today, the Consumer Financial Protection Bureau (CFPB) finalized its "Know Before You Owe" mortgage forms, which are "easier-to-use mortgage disclosure forms that clearly lay out the terms of a mortgage for a homebuyer," and are effective August 1, 2015. Four forms previously required by federal law – two required after receiving a mortgage application and two required at the closing stage – have been consolidated into two forms: the loan estimate form must be provided to consumers within three business days after a loan application is submitted and the closing disclosure form must be provided to consumers three days before closing on a loan. They will replace the existing federal disclosures in an effort to help consumers in the following ways: improving consumer understanding of risk factors as well as the short-term and long-term costs and the monthly payments; enabling better comparison shopping of competing loan offers and shopping for closing costs; and avoiding costly surprises at the closing table by making it easier to compare the estimated and final terms of the loan, allowing more time to consider choices and limiting closing cost increases. For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Nov 12, 2013

Columbus residents can now reach the CFPB through the city's 311 hotline
 

Today, the Consumer Financial Protection Bureau (CFPB) announced that it has partnered with Columbus officials to make the city's non-emergency city services phone line capable of connecting consumers directly to the federal bureau. Residents with complaints and questions about financial products and services can now dial the Mayor's Constituent hotline at 311 to reach the bureau. The CFPB recently formed similar partnerships with St. Louis, Newark, Boston and Jackson, Mississippi. For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Ohio News   |   Permalink

 

Nov 11, 2013

New CFPB tool is designed to help consumers find housing counselors
 

In advance of the January 2014 implementation of its new mortgage rules, the Consumer Financial Protection Bureau (CFPB) launched a new tool recently that is designed to "help consumers find local housing counseling agencies to answer their questions or address their concerns" at little or no cost to the consumers (See our Oct 21, 2013, blog post for more information). The tool enables consumers to find their closest counseling agencies, provides contact information for HUD-approved counselors, displays services offered by each counseling agency and indicates the languages in which each housing counseling agency offers services. The new mortgage rules require mortgage lenders to "provide applicants with a list of local housing counselors," so the bureau also published guidance for lenders on how to meet this requirement should they wish to build their own lists. For more, read the full press release and access the tool.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Nov 09, 2013

NCUA to host a free, two-part webinar on how to comply with forthcoming remittance and mortgage lending rules
 

The National Credit Union Administration  (NCUA) will host a free, two-part webinar titled, "New Dodd-Frank Remittances and Mortgage Lending Rules," on Mon, Nov. 18, 2013, and Wed, Dec. 18, 2013, at 2 p.m. each day. On Monday, a high-level overview will be provided on remittance transfers, higher-priced mortgage loan appraisals, mortgage servicing and higher-priced loan escrows. Tuesday's topics are the ability-to-repay and qualified mortgages, high-cost mortgage and home ownership counseling, loan originator compensation, and Equal Credit Opportunity Act appraisals and valuations. For more, including registration information, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory  National Credit Union Administration   |   Permalink

 

Nov 08, 2013

CFPB begins accepting consumer complaints about payday lenders
 

This week, the Consumer Financial Protection Bureau (CFPB) began accepting consumer complaints about the payday loan market. Known also as "cash advances" or "check loans," payday loans serve as quick access to credit for consumers that might not qualify for other credit. The amount is usually less than $500 and the loan's terms generally require payback within a couple of weeks. The CFPB is accepting complaints from consumers on the following issues:

  • Unexpected fees or interest
  • Unauthorized or incorrect charges to their bank account
  • Payments not being credited to their loan
  • Problems contacting the lender
  • Receiving a loan they did not apply for
  • Not receiving money after they applied for a loan
For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Nov 06, 2013

CFPB is considering rules for debt collection
 

Today, the Consumer Financial Protection Bureau (CFPB) announced that it is collecting consumer complaints on the debt collection industry through its Advance Notice of Proposed Rulemaking (ANPR). With more than 4,500 debt collection firms in the United States, the multi-billion dollar debt collection market "has long been one of the most complained about subject areas to government regulators." The ANPR seeks to determine whether federal rules could help ensure that debt collectors have accurate information, including when:
  • Attempting to collect money from the correct consumers. When debt collectors attempt to collect money from the wrong consumers and addresses, they have been known to then "incorrectly furnish information to credit bureaus on the wrong person."
  • Attempting to collect more than what is owed and maintaining inaccurate records about what consumers have paid.
  • Maintaining incomplete documentation that they use to support their claims about a consumer's indebtedness, which can make it more difficult for a consumer to resolve a dispute regarding the amount owed.
The bureau's goal for the rule will be to ensure that clear information about their debt is available to consumers and that consumers are receiving adequate information about their legal rights, including "the right to dispute a debt or to limit certain types of communications from collectors." It will also seek to determine how federal rules can better regulate how often debt collectors contact consumers, the methods they use to contact consumers and telling consumers of impending lawsuits, property seizures, loss of employment and other false threats should they not pay their debts.

CFPB also expanded its Consumer Complaint Database to include 5,000 debt collection complaints regarding collection activities, underlying debt and credit reporting.

For more, read the full press release and the ANPR.
 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Oct 29, 2013

CFPB provides guidance on the duties and responsibilities of financial caregivers
 

Today, the Consumer Financial Protection Bureau (CFPB) released four guides to help financial caregivers understand their duties and responsibilities. Four separate booklets serve to specialize the guidance for the certain circumstances under which someone can be managing someone else's money: powers of attorney, court-appointed guardians, trustees and government fiduciaries. All of these booklets cover the main responsibilities of any fiduciary, which are to act in the person's best interest; manage the money and property carefully; keep the money and property separate from your own; and to maintain good records. For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Oct 24, 2013

CFPB files suit against a Kentucky law firm for allegedly violating RESPA by paying kickbacks through shell companies
 

Today, the Consumer Financial Protection Bureau (CFPB) filed a federal lawsuit against the Kentucky law firm Borders & Borders, PLC alleging it violated the Real Estate Settlement Procedures Act (RESPA) by "illegally paying kickbacks for real estate settlement referrals through a network of shell companies." The CFPB's complaint alleges that the firm "operated nine joint ventures with the owners and managers of local real estate and mortgage broker companies" and then split profits between the Borders principals and the referring real estate or mortgage broker. For more, read the full press release and complaint.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Oct 23, 2013

CFPB issues guidance and new online tool for soon-to-be effective remittance rule
 

Yesterday, the Consumer Financial Protection Bureau (CFPB) published the procedures it will use in examining institutions that make remittance transfers for customers. In February 2012, the bureau issued a final rule outlining "how covered providers of remittance transfers should treat consumers who send money abroad" (See our May 01, 2013, blog post for more information). The rule goes into effect on Monday, October 28, 2013. In addition, the CFPB released an online tool "designed to make regulations easier to understand" known as eRegulations. For more, read the full press release and access the eRegulations tool.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Oct 22, 2013

Five federal regulatory agencies issue a statement on fair lending compliance and the Ability-to-Repay/Qualified Mortgage Rule
 

Today, five federal regulatory agencies – the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau (CFPB), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA) and the Office of the Comptroller of the Currency – provided clarity for creditors regarding whether the disparate impact doctrine of the Equal Credit Opportunity Act (ECOA) and its implementing regulation, Regulation B, allows them to originate only Qualified Mortgages. The statement counsels that "creditors should continue to evaluate fair lending risk as they would for other types of product selections, including by carefully monitoring policies and practices and implementing effective compliance management systems." For more, read the full press release and statement.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Deposit Insurance Corporation  Federal Reserve System   National Credit Union Administration  Office of the Comptroller of the Currency    |   Permalink

 

Oct 21, 2013

CFPB Director Richard Cordray assures bankers that the agency will be sensitive about Ability-to-Repay/Qualified Mortgage Rule compliance during its first few months of implementation
 

In prepared remarks delivered during the American Bankers Association Annual Convention in New Orleans today, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray discussed the January 2014 implementation date for the Ability-to-Repay/Qualified Mortgage Rule. Cordray outlined the several ways in which the CFPB is working with all major market players to help ensure a smooth transition to compliance. He also assured the audience that the bureau and fellow regulators' oversight of the new mortgage rules in the early months "will be sensitive to the progress made by institutions that have been squarely focused on making good-faith efforts to come into substantial compliance on time." For more, read the full remarks.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Oct 17, 2013

CFPB report and consumer advisory aim to help private student loan borrowers with loan payment processing pitfalls
 

Yesterday, the Consumer Financial Protection Bureau (CFPB) released a report analyzing the more than 3,800 comments, complaints and other input received during the last year from private student loan borrowers. The report found that the payment processing policies of private student lenders and loan services "may be sidetracking responsible borrowers looking to pay off their loans more quickly." The report highlighted the following issues:

  • Due to a dearth of refinancing options, consumers of high-rate private student loans are opting to pay off their loans early. However, the bureau received complaints that "payments in excess of the amount due are applied across all their loans, not the highest-interest rate loan that they would prefer to pay off first."
  • Although many servicers advise borrowers who are unable to make a full payment to pay whatever they can, servicers often "divide up the partial payment and apply it evenly across all of the loans in their account. This maximizes the late fees charged to the consumer and it can exacerbate the negative credit impact of a single late payment."
  • "Lost paperwork, processing errors that result in late fees and interruptions of routine communication such as billing statements" are said to occur when borrowers' loans are transferred between servicers. Penalties ensue when borrowers make decisions based on the previous servicers' practices.
To assist borrowers with these issues, the CFPB released a complementary consumer advisory to help them "instruct servicers on how to process their payments." For more, read the full press release, report and consumer advisory.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Oct 16, 2013

CFPB provides interpretive guidance on mortgage servicing rules
 

Yesterday, the Consumer Financial Protection Bureau (CFPB) provided interpretive guidance on mortgage servicing rules that are set to take effect in January 2014 (See our Jan 17, 2013, blog post for more information). In order to "ensure a smooth transition and provide certainty to the market," the CFPB's guidance provides clarifications regarding "communications with family members after a borrower dies, contact with delinquent borrowers, and treatment of consumers who have filed for bankruptcy or invoked certain protections under the Fair Debt Collection Practices Act." For more, read the full press release and the interim final rule.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Oct 14, 2013

CFPB Director lays framework for agency
 

On Friday, October 11, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray addressed a group of practicing attorneys and law students in Columbus, Ohio.  In his remarks, Director Cordray provided an overview of the two-year-old agency and its framework.  He explained that the CFPB serves a two-fold purpose:

  1. To reduce the complexity of the financial system; and
  2. To educate the American public regarding financial literacy.

To serve this purpose, Director Cordray explained the agency’s framework includes six tools that the CFPB uses to carry out its duties:  Enforcement, Supervisory Authority, Regulatory, Congressional Reports, Consumer Response and Consumer Education.

Enforcement:  Director Cordray explained the CFPB has the authority to pursue administrative actions and/or bring actions of the law in court against alleged violators.

Supervisory Authority:  Director Cordray discussed the fact that the CFPB has the ability to conduct examinations of banks and other financial services companies.  This function serves as a consumer remediation measure in that it is used to change the behavior of companies where applicable.  And penalties can be assessed as well. 

Director Cordray also noted that the CFPB is one of the few agencies to hold both enforcement and supervisory authority functions.

Regulatory: Under Dodd-Frank, the CFPB has the authority to write rules and regulations.  Here, Director Cordray emphasized the significant task Congress charged it with – writing new mortgage rules, which are required to be in place by January 2014.  Director Cordray referred to this undertaking as the “biggest historic set of changes that occurred in the mortgage market.”  He further explained that the CFPB’s rules affect two major areas, mortgage origination and mortgage servicing.

Going forward, the CFPB is setting its sights on the prepaid debit cards. Director Cordray projected that $170 billion are expected to be loaded onto these cards next year.  Accordingly, the CFPB plans to write rules that protect consumers regarding this market.

Congressional Reports:  The CFPB has a duty to prepare congressional reports regarding various industries and related legislation.  Director Cordray discussed a recent CFPB report, issued on October 2, which addressed the effectiveness of the 2009 Credit Card Accountability Responsibility and Disclosure Act (CARD Act).  He explained that the CFPB determined the CARD Act is a significant success for several reasons, including the fact that consumers are paying $4 million in fees less than before the CARD Act.  He did note that further work is needed in this area.

Consumer Response Function:  Congress wanted a system to address consumer complaints, Cordray explained.  To comply, the CFPB began addressing one product at a time.  First, the agency addressed credit cards.  Then the agency accepted complaints regarding the mortgage industry.  The agency is projected to receive 150,000 complaints a year (which is more than any federal banking agency receives).  And the agency does not yet accept complaints regarding all financial services products.  It plans to add new products later.

Importantly, the CFPB uses the consumer response function as a way to identify trends. The CFPB finds this tool useful in identifying which problems warrant further investigation.

Director Cordray speculated that the consumer response function could develop to include a rating of financial services companies based on consumer complaints.

Consumer Education:  Finally, Director Cordray discussed the CFPB’s plans to emphasize financial literacy with the general public.  He is meeting with companies and churches trusting that they will pay more attention in this area. For instance, he is encouraging employers to include financial literacy programs in benefit packages.  As to churches, he is meeting with church leaders to ensure congregations are aware of CFPB services. 

The goal of Cordray’s financial literacy platform comprises three principles:

  1. A basic financial literacy;
  2. An understanding of small financial decisions that accumulate over time (saving, spending and retirement); and
  3. An understanding of significant financial decisions (paying for college, buying a home).  The CFPB has an online module regarding paying for college and plans to launch a similar module regarding owning a home in the spring of 2014. 

When asked about the future of the agency, Cordray, a self-professed “two-thirds of the glass half-full” optimist, explained that he is hopeful that the agency will continue to thrive under a new administration. In other words, the CFPB is here to stay.


 
Posted by K. Warmsby in  Consumer Financial Protection Bureau   |   Permalink

 

Oct 09, 2013

Five federal regulatory agencies encourage financial institutions to work with borrowers affected by the government shutdown
 

Today, five federal regulatory agencies – the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau (CFPB), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA) and the Office of the Comptroller of the Currency (OCC) – issued a joint release encouraging financial institutions to "work with customers affected by the federal government shutdown." The agencies encourage financial institutions to "consider prudent workout arrangements" with regard to borrowers who are facing a temporary hardship in making payments on debts, and said that "prudent efforts to modify terms on existing loans should not be subject to examiner criticism." For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Deposit Insurance Corporation  Federal Reserve System   National Credit Union Administration  Office of the Comptroller of the Currency    |   Permalink

 

Oct 03, 2013

CFPB files proposed order to penalize Meracord LLC $1.376 million for helping debt-settlement companies collect millions in illegal upfront fees
 

Today, the Consumer Financial Protection Bureau (CFPB) announced that it has filed a proposed order with the United States District Court for the Western District of Washington that would require Washington-based Meracord LLC, a leading debt-settlement payment processor, to halt all illegal activities and pay a $1.376 million civil penalty for facilitating the collection of millions of dollars in illegal upfront fees from consumers. The CFPB charges that the company, which agreed to the terms of the court order, violated the Telemarketing Sales Rule by helping multiple debt-settlement companies across the country "charge millions of dollars in unlawful fees to more than 11,000 consumers in multiple states." The rule forbids such fees from being collected before any of the consumers' debts have been settled so as to protect consumers from ending up further in debt. The bureau alleges "[n]early 5,000 of those consumers' accounts were closed without any of their debts being settled." CFPB pursued the company as a "centralized chokepoint" and continues to pursue enforcement actions against several debt-settlement providers that contracted with Meracord. During a press call, CFPB Deputy Director Steve Antonakes provided additional details about the proposed court order, which will not have the full force of the law until the presiding judge signs off. For more, read the full press release and the deputy director's remarks.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Oct 02, 2013

CFPB releases report analyzing how the CARD Act has impacted consumers
 

The Consumer Financial Protection Bureau (CFPB) released a report today that assesses the impact of the Credit Card Accountability and Disclosure Act of 2009 (CARD Act) on consumers. With a decline in the total cost of credit amounting to two percentage points between 2008 and 2012, the report found that the act "reduced penalty fees and made the cost of credit cards clearer to consumers."

The report found that overlimit fees have been effectively eliminated; the size of late fees has declined; responsible access to credit remains available; and young consumers are better protected from credit cards they cannot afford. The report also highlighted several outstanding areas of concern, including that some add-on, optional products continue to be marketed in deceptive ways; "application fees or other fees charged before an account is opened do not count toward determining" compliance with the act; the risks and benefits of deferred interest products remain to be studied; whether disclosures concerning rewards products and grace periods are being made in a clear and transparent matter; and whether certain required disclosures are clearly provided to customers who choose to pay bills online or automatically.

CFPB Director Richard Cordray discussed the report in the prepared remarks he delivered during a CARD Act Field Hearing in Chicago today. For more, read the full remarks and press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Sep 30, 2013

CFPB Director Richard Cordray discusses consumer financial protection for students during the Banking on Campus Forum
 

During the Consumer Financial Protection Bureau (CFPB) Banking on Campus Forum in Washington, D.C. today, CFPB Director Richard Cordray delivered prepared remarks addressing the reforms the bureau has pursued to help students navigate financial products and services. Officials from the U.S. Department of Education and the U.S. Department of the Treasury took part in the forum, as did officials from the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve. Participants heard, among other things, CFPB Student Loan Ombudsman Rohit Chopra present initial findings from the agency's request for information from schools on their marketing partnerships with financial institutions. Students and members of the public also submitted testimonies. For more, read the full remarks.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Sep 27, 2013

CFPB Director Richard Cordray discusses the challenges and benefits of implementing financial education reforms
 

During a Financial Literacy and Education Commission Field Hearing at the University of Wisconsin in Madison this week, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray discussed the complex, varied and significant challenges that the bureau is facing as it tries to help consumers by reforming and enhancing the financial education resources available to them. For more, read the full remarks.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Sep 25, 2013

CFPB announces new small creditor qualified mortgage quick reference chart
 

Yesterday, the Consumer Financial Protection Bureau (CFPB) announced a new quick reference chart that maps out the types of qualified mortgages that small creditors can originate. View the chart here.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Sep 24, 2013

Federal regulators say privacy provisions of the Gramm-Leach-Bliley Act allow for reporting financial abuse of elders
 

Today, the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau (CFPB), the Federal Deposit Insurance Corporation (FDIC), the Federal Trade Commission (FTC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC) and the Securities and Exchange Commission (SEC) issued interagency guidance to clarify that "it is generally acceptable under the law for financial institutions to report suspected elder abuse to appropriate local, state or federal agencies." Privacy provisions of the Gramm-Leach-Bliley Act "generally requires that a financial institution notify consumers and give them an opportunity to opt out before providing nonpublic personal information to a third party," but the agencies say employees of financial institutions are permitted to report to the proper authorities any suspicious activities that signal financial abuse of elders. For more, read the full press release and CFPB Director Richard Cordray's prepared remarks.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Deposit Insurance Corporation  Federal News  Federal Reserve System   National Credit Union Administration  Office of the Comptroller of the Currency    |   Permalink

 

Sep 24, 2013

CFPB Director Richard Cordray discusses the future of banking regulation in the aftermath of the financial crisis
 

Today, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray discussed the aftermath of the financial crisis and the future of banking regulation during the American Banker Regulatory Symposium in Arlington, Virginia. Cordray discussed how the creation of the CFPB centralized authority for the administration and enforcement of consumer financial laws that until then had been strewn across seven federal agencies. For more, read the full remarks.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Sep 19, 2013

New CFPB tool makes local mortgage information more accessible to the public
 

Today, the Consumer Financial Protection Bureau (CFPB) launched a new online tool that uses information collected under the Home Mortgage Disclosure Act (HMDA) to create interactive heat maps and graphs that make local mortgage trends more accessible and transparent to consumers, a bureau press release announced. The tool "focuses on the number of mortgage applications and originations, in addition to loan purposes and loan types for 2010 through 2012." Among the trends highlighted in the tool are: mortgage applications and originations were up; mortgage volume increased, driven by refinancing; and there was increased reliance on mortgages insured by the Federal Housing Administration (FHA) and those guaranteed by the Department of Veterans Affairs (VA). For more, read the full press release and access the HDMA tool.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Sep 17, 2013

CFPB releases payday lending market guidelines for protecting servicemembers
 

Today, the Consumer Financial Protection Bureau (CFPB) released guidelines for payday lenders regarding the Military Lending Act (MLA). These requirements are included in an updated exam manual for the short-term, small-dollar lending industry that the bureau also released today. Requirements outlined in the guidelines include:

  • Annual percentage rate (APR), which includes all fees and costs associated with the loan, must be capped at 36 percent for servicemembers
  • Payday lenders are forbidden from rolling over loans made to servicemembers unless "the new transaction results in more favorable terms for the servicemember"
  • Payday lenders cannot require servicemembers to sign away their consumer rights under state or federal laws, nor can they require servicemembers to waive their rights under the Servicemembers Civil Relief Act, to get a loan or seek resolution of any legal claims in courts
  • Payday lenders cannot require military personnel to repay loans by having payments directly deducted under the military allotment system.
For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Sep 14, 2013

CFPB finalizes modifications to mortgage rules
 

On Friday, the Consumer Financial Protection Bureau (CFPB) finalized amendments and clarifications to the mortgage rules it finalized in January 2013 (see our June 25, 2013, blog post for more information). Among other things, the modifications:

  • Clarify what servicer activities are prohibited in the first 120 days of delinquency
  • Outline procedures for obtaining follow-up information on loss-mitigation applications
  • Facilitate servicers' offering of short-term forbearance plans
  • Clarify best practices for informing borrowers about the address for error resolution documents
  • Facilitate lending in rural or underserved areas
  • Make clarifications about financing of credit insurance premiums
  • Clarify the definition of a loan originator
  • Clarify the points and fees thresholds and loan originator compensation rules
  • Revise effective dates of many loan originator compensation rule provisions
Last Wednesday, CFPB Director Richard Cordray addressed the American Mortgage Conference in Raleigh, North Carolina. Cordray discussed these recently finalized mortgage rules, noting that the bureau's oversight of the rules will "be sensitive to the progress made by those lenders and servicers who have been squarely focused on making good-faith efforts to come into substantial compliance on time."

For more, read Cordray's remarks and the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Sep 12, 2013

CFPB reminds employers that they cannot require employees to receive wages on a payroll card
 

After hearing reports that employers in the retail and food service industries were "distributing wages solely through payroll cards," the Consumer Financial Protection Bureau (CFPB) published a bulletin reminding all employers that federal law prohibits requiring employees to "receive wages on a payroll card," an agency press release said. States generally govern "which alternative methods employers must offer," but federal law does contain some consumer protection provisions for payroll cards, including disclosure of fees, access to account history, limited liability for unauthorized use, and error resolution rights. For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Sep 12, 2013

CFPB Director Richard Cordray delivers prepared remarks before the House Committee on Financial Services
 

Today, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray delivered the third Semi-Annual Report of the CFPB, which covers the last six months of 2012, to the U.S. House of Representatives Committee on Financial Services. During that period, the bureau gained authority to supervise certain debt collectors, and expanded its supervision program to include the larger credit reporting companies. The CFPB also launched its first enforcement actions, which were against credit card companies that deceived and misled consumers, and it began tackling issues in the market for private student loan debt. For more, read the full written testimony.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Sep 07, 2013

CFPB files amicus brief with the FTC arguing that collectors must disclose when debt is time-barred
 

CFPB Monitor reports that an amicus brief filed jointly by the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) offers a view that would effectively expand the Fair Debt Collection Practices Act (FDCPA) to "require debt collectors to disclose that a debt is time-barred when attempting to collect." In the brief filed for Delgado v. Capital Management Services, LP, et al., the two agencies argue that "a time-limited settlement offer can mislead an unsophisticated consumer to believe that a debt is enforceable even if the offer is not accompanied by any explicit or implied threat of litigation." For more, read the full story.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Sep 05, 2013

CFPB bulletin outlines what furnishers must do to comply with the Fair Credit Reporting Act
 

The Consumer Financial Protection Bureau (CFPB) released a bulletin detailing its expectations for Fair Credit Reporting Act (FCA) compliance by companies known as furnishers, which supply information to consumer reporting companies. The bureau noted it success improving e-OSCAR – the electronic system used to send information on consumer disputes from the three major consumer reporting companies to furnishers – so that it could "send information relating to consumer disputes to furnishers." For more, read the full press release and bulletin.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Aug 26, 2013

Case Challenging CFPB’s Constitutionality Dismissed For Lack Of Standing
 

On August 1, 2013, efforts to challenge the constitutionality of the Consumer Financial Protection Bureau (CFPB) were dealt a blow when the U.S. District Court for the District of Columbia dismissed an action against the CFPB because the plaintiffs lacked Article III standing.

In State National Bank of Big Spring et al., v. Jacob J. Lew et al., Civil Action No. 12-1032 (ESH), 2013 U.S. Dist. LEXIS 108308 (Dist. D.C.) (2013), the State National Bank of Big Spring, and two conservative organizations – 60 Plus Association, Inc. and Competitive Enterprise Institute (collectively “private plaintiffs”) – challenged Title X of Dodd-Frank, which established the CFPB. The complaint also challenged Title I and Title II, which established the Financial Stability Oversight Council (FSOC) and the Orderly Liquidation Authority (OLA), respectively. Read more here.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank   |   Permalink

 

Aug 23, 2013

CFPB report details mortgage servicing problems at banks and nonbanks
 

Yesterday, the Consumer Financial Protection Bureau (CFPB) released a report detailing mortgage servicing problems at banks and nonbanks, finding that "many nonbanks lack robust systems for ensuring they are following federal laws." In its second Supervisory Highlights report, the CFPB touched on mortgage servicing problems such as sloppy account transfers, poor payment processing and loss mitigation mistakes. The bureau found that many nonbanks do not have compliance management systems, noting that they lack formal policies and procedures, are missing a comprehensive consumer compliance program and are forgoing independent consumer compliance audits. For more, read the full CFPB press release and report, as well as this Washington Post story.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Aug 05, 2013

D.C. District Court dismisses constitutional challenge to the CFPB
 

On Thursday, U.S. Judge for the D.C. District Court Ellen Huvelle dismissed a civil action challenging the constitutionality of not only President Obama's recess appointment of Richard Cordray as director of the Consumer Financial Protection Bureau (CFPB), but also of the bureau itself. "Texas-based State National Bank of Big Spring, think tank Competitive Enterprise Institute and advocacy group the 60 Plus Association sued the U.S. Department of the Treasury and the bureau last June. They were later joined by the attorneys general of Alabama, Georgia, Kansas, Michigan, Montana, Nebraska, Ohio, Oklahoma, South Carolina, Texas and West Virginia," The Litigation Daily reports. According to the decision, Judge Huvelle found that the plaintiffs lacked standing because they never "suffered an injury-in-fact caused by the Bureau or Cordray, and redressable by this Court." For more, read the full story and decision.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Aug 01, 2013

CFPB sues mortgage company for loan compensation rule violation
 

On July 23, 2013, the Consumer Financial Protection Bureau filed a complaint against Utah-based Castle & Cook Mortgage, LLC (Castle) and two of its officers. The CFPB alleges that Castle paid its employees for steering customers into higher-priced mortgages in violation of the Federal Reserve Board’s Loan Compensation Rule. Effective April 6, 2011, the Loan Compensation Rule bans compensation based on loan terms, such as the interest rate of the loan. In the complaint, the CFPB claims that Castle established a quarterly bonus program that paid more than 150 loan officers for persuading consumers to take on loans with higher interest rates.  The average bonuses ranged from $6,100 to $8,700. Notably, loan officers did not receive bonuses when the consumers received less expensive loans.

 

To read more about the CFPB's complaint, click here.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau   |   Permalink

 

Jul 29, 2013

Bricker partners attending ACI Consumer Finance Class Actions & Litigation Conference
 

In an effort to stay abreast of important trends within the consumer finance litigation and enforcement practice area, Bricker partners Anthony M. Sharett and Drew H. Campbell are attending the American Conference Institute's Consumer Finance Class Actions & Litigation Conference in Chicago, Illinois.   The conference will include in-house roundtables, CFPB updates, litigation and settlement trends, and regulatory and enforcement updates.  



 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Jul 17, 2013

U.S. Senate clears Richard Cordray to run the CFPB a year and a half after he was appointed to the position
 

U.S. Senate Republicans reached an eleventh-hour agreement with their Democratic counterparts Monday night to confirm Richard Cordray as director of the Consumer Financial Protection Bureau (CFPB), The Columbus Dispatch reports. In January 2012, President Obama appointed Cordray under a controversial recess appointment after Republicans held up his nomination in protest of the structure of the agency itself, which they thought should be "overseen by a five-member board" and subject to the congressional appropriations process (see our Jan 04, 2012, blog post for more information). The compromise was made to avoid a showdown between the two parties over filibusters, the rules for which Senate Majority Leader Harry Reid (D-Nevada) has been threatening to change due to what he describes as congressional obstruction from Republicans. By confirming Cordray, a Grove City native and former Ohio attorney general, “the Senate assured that he can remain in his post for a five-year term, and it effectively ended speculation about Cordray returning to Ohio to seek the Democratic nomination for governor in 2014,” the article said. For more, read the full story.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal News  Federal Regulatory   |   Permalink

 

Jul 11, 2013

Federal agencies propose rule to exempt subset of higher-priced mortgage loans from the recently finalized appraisal requirements
 

Six federal financial regulatory agencies are proposing exemptions for a final rule on appraisal requirements that was imposed by the Dodd-Frank Act and finalized in January 2013, according to a press release from the Federal Reserve Board (see our January 19, 2013, blog post for more information). In response to public comments received regarding the appraisal rule, the new rule would exempt the following three types of higher-priced mortgage loans from the appraisal requirements: "loans of $25,000 or less; certain 'streamlined' refinancings; and certain loans secured by manufactured housing." The agencies — the Consumer Financial Protection Bureau (CFPB), the Federal Deposit Insurance Corporation (FDIC), the Federal Housing Finance Agency (FHFA), the National Credit Union Administration (NCUA) and the Office of the Comptroller of the Currency (OCC) — will accept public comments on all aspects of the proposal until September 9, 2013. For more, including a link to the proposed rule, read the full press release.



 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Deposit Insurance Corporation  Federal Regulatory  Federal Reserve System   National Credit Union Administration  Office of the Comptroller of the Currency    |   Permalink

 

Jul 10, 2013

Sharett featured on Bank Safety & Soundness Advisor webinar panel
 

Bricker & Eckler Partner Anthony Sharett shared his expertise on consumer compliance exams today during the Bank Safety & Soundness Advisor's CFPB-Influenced Community Bank Exams: Best Practices for the New Consumer Compliance Exam webinar. He was joined by Andrew Campbell, counsel for Ober Kaler's Financial Institutions Group, and Cliff Stanford, former assistant general counsel at the Federal Reserve. For more information, click here.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Jun 28, 2013

CFPB orders U.S. Bank and Dealers' Financial Services to refund $6.5 million to servicemembers
 

Yesterday, the Consumer Financial Protection Bureau (CFPB) announced that Minneapolis-based U.S. Bank violated the Truth in Lending Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act when it targeted active-duty servicemembers with deceptive marketing and lending practices through its Military Installment Loans and Education Services (MILES) auto loans program, according to a press release from the bureau. Lexington, Kentucky-based Dealers' Financial Services (DFS), which markets the program, manages its website and processes loan applications before submitting them to U.S. Bank, was also found guilty of the following deceptive marketing practices: understating the costs of the vehicle service contract, understating the costs of the insurance and misleading consumers about product benefits.

To make payments, the program required servicemembers to use a decades-old system known as the military allotment system, which was originally designed to "help deployed servicemembers send money home to their families and pay their creditors at a time when automatic bank payments and electronic transfers were not yet common bank services." The bureau found that not only did the lenders often require repayment through fee-charging, third-party processors, but that the bank also failed to properly disclose the schedule of payments, which by coming out of every paycheck amounted to twice each month. U.S. Bank must repay at least $3.2 million and DFS has agreed to pay $3.3 million to active-duty servicemembers. The CFPB decided not to impose a civil penalty, but said it will work with the Department of Defense as part of an interagency group tasked with improving the allotment system. For more, read the full press release and remarks from CFPB Director Richard Cordray.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory   |   Permalink

 

Jun 25, 2013

CFPB proposes modifications and narrow revisions to several mortgage rules
 

To ensure that the ability-to-pay rule, as well as new rules for mortgage servicing, escrow accounts, high-cost mortgages, and compensation and qualifications for loan originators "deliver their intended value for customers," the Consumer Financial Protection Bureau (CFPB) recently proposed several modifications and narrow revisions to these rules that are designed to provide clarity to lenders and other concerned parties, according to a press release from the bureau (see our February 13, 2013, blog post for more information). The proposed changes serve to:

  • Outline procedures for obtaining follow-up information on loss-mitigation applications
  • Facilitate servicers' offering of short-term forbearance plans
  • Facilitate lending in rural or underserved areas
  • Make clarifications about financing of credit insurance premiums
  • Clarify the definition of a loan originator
  • Clarify the points and fees thresholds for manufactured housing employees
  • Revise effective dates of Loan Originator rule and ban on financing of credit insurance

For more, including a copy of the proposal, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory   |   Permalink

 

Jun 12, 2013

CFPB report finds that opting-in to overdraft coverage puts consumers at greater risk
 

A new Consumer Financial Protection Bureau (CFPB) report released this week found that due in part to the fact that most banks have adopted automated systems for assigning overdraft fees, what was once "an occasional courtesy" has become "a significant source of industry revenues," with it and non-sufficient fund fees now representing "60 percent or more of consumer checking account fee income," according to a press release from the bureau. Another contributing factor is that procedures and criteria for these fees vary by institution, some of which have complicated fee structures, transaction postings and overdraft coverage limits that make it difficult for consumers to anticipate and avoid these fees. What's more, the report found that customers who opt-in to overdraft coverage end up paying more in overdraft and non-sufficient fund fees, and are more likely to end up with involuntary account closures due to negative account balances. For more, including a link to the full report and fact sheet, read the full press release and CFPB Director Richard Cordray's prepared remarks.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

May 31, 2013

CFPB's Consumer Complaint Database expands coverage and introduces location information
 

The Consumer Financial Protection Bureau (CFPB) today announced that it has again expanded the scope and functionality of its Consumer Complaint Database as part of an ongoing effort to increase transparency within the consumer financial services market (see our March 28, 2013, blog post for more information), according to a press release from the bureau. The database, which in March "expanded from more than 19,000 credit card complaints to nearly 90,000 complaints on credit cards, mortgages, student loans, bank accounts and services, and other consumer loans, like auto loans," now also includes complaints about money transfers and credit reporting. In addition, every complaint now lists the state it came from so that people can "more easily localize data." For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory   |   Permalink

 

May 30, 2013

CFPB director outlines bureau's core policy recommendations for youth financial education
 

Tying the endurance of the nation's democratic system to the "effective operation of a free market economy," Consumer Financial Protection Bureau (CFPB) Director Richard Cordray delivered prepared remarks during the Financial Industry Regulatory Authority (FINRA) Investor Education Conference in Washington, D.C., yesterday that described the agency's efforts to "bridge the widening gap between people’s actual financial capability and the increasingly complex financial decisions they have to make." Director Cordray said that while the bureau’s rules, oversight and enforcement actions are intended to make sure "that consumer financial markets are not rigged against people," self-protection remains the "best and most immediate form of consumer protection." In that vein, Director Cordray lauded FINRA's National Financial Capability Study as a "crucial source of information about the habits of American consumers and the complex decisions they face in the financial marketplace," and provided an outline of the bureau's recently unveiled core policy recommendations for youth financial education. For more, read the full press release and access FINRA's National Financial Capability Study.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

May 30, 2013

CFPB amends ability-to-repay rule to facilitate lending by certain small creditors and community lenders
 

Yesterday, the Consumer Financial Protection Bureau (CFPB) announced that it has finalized amendments modifying the ability-to-repay rule so as to "facilitate access to credit" for small creditors, community development lenders and housing stabilization programs, according to a press release from the bureau. Developed to help prevent another mortgage crisis, the ability-to-repay rule created the "Qualified Mortgages" (QMs) standard, featuring requirements designed to "protect consumers from taking on loans they do not have the financial means to pay back" (see our January 10, 2013, blog post for more information). Under the finalized amendments:

  • Nonprofit and community-based lenders that work "to help low- and moderate-income consumers obtain affordable housing" and make no more than 200 loans per year are exempted from the ability-to-repay rule, as are mortgage loans made through certain homeownership stabilization and foreclosure prevention programs.
  • Small creditors that make 500 or fewer first-lien mortgages annually and have less than $2 billion in assets are provided a two-year transition period during which they can make some balloon loans that will still meet the definition of QMs. These creditors are also allowed to "charge a higher annual percentage rate for certain first-lien Qualified Mortgages while maintaining a safe harbor for the Ability-to-Repay requirements."
  • The points and fees threshold — established to ensure that QMs aren't compromised by excessive compensation paid to loan originators — no longer applies to compensation paid by a mortgage broker to a loan originator employee or by a lender to a loan originator employee. Compensation paid by a creditor to a mortgage broker, as well as "any origination charges paid by a consumer to a creditor," must still be included in the points and fees.

The ability-to-repay rule, complete with these amendments, will go into effect on January 10, 2014. For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory   |   Permalink

 

May 17, 2013

CFPB initiatives focus on assisting immigrant communities
 

During a Consumer Advisory Board Meeting in Los Angeles Wednesday, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray described how the bureau's new remittance rule will protect immigrant community members when they transfer money to loved ones abroad (see our May 01, 2013, blog post for more information). Describing financial literacy and financial capability as "essential components of citizenship," Director Cordray also detailed the bureau's concerted efforts to make "more personal finance education available to everyone in this country." Because nearly two-thirds of the Latinos living in the United States access the internet from a mobile device, the bureau announced its first foray into mobile technology with the unveiling of "CFPB en Español" — a program dedicated to making many of the bureau's resources and forms available in Spanish that also features the new consumer database "AskCFPB," which was optimized for use on both computers and mobile devices. For more, read Director Cordray's full remarks.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

May 09, 2013

Comptroller of the Currency says federal agencies must work together to supervise the financial system
 

Comptroller of the Currency Thomas J. Curry discussed bank supervision after the financial crisis during the 49th Annual Conference on Bank Structure and Competition in Chicago today. In order to detect risks across our multifaceted and far-reaching financial system, Curry said that his office is stepping up coordination with the Federal Reserve, the FDIC and the CFPB to "develop integrated strategies for joint supervision of complex institutions and new tools to aid oversight." He also described a new "heightened expectations" program, which aims to increase standards regarding audit and risk management. For more, read Curry’s remarks.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Deposit Insurance Corporation  Federal Regulatory  Federal Reserve System   Office of the Comptroller of the Currency    |   Permalink

 

May 09, 2013

CFPB report details how student loan debt is affecting individuals and the broader economy
 

After receiving more than 28,000 comments to the February 2013 Notice and Request for Information regarding student debt issues, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray announced during a field hearing on student loan debt today that the bureau has published a new report discussing how high student debt — particularly from private student loans — is preventing many consumers from achieving "a full financial life" and could be harmful to "recovering consumer markets." Whereas traditionally, consumers with student debt "typically had higher income and were therefore more likely to buy a home," today the opposite appears to be trending: those saddled with student loan debt are refraining from purchasing homes and cars as well as starting businesses. In addition, these consumers are shying away from moving to rural communities that may necessitate home and car ownership, and are relying on their parents while being unable to begin their own retirement savings. The report features several potential policy and market-based solutions that would help borrowers who pay on time refinance their loans, and would provide a "road to recovery" for borrowers in distress and a "credit clean slate" for borrowers in default. For more, read the full press release, prepared remarks and report.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

May 01, 2013

New CFPB rules for international money transfers will take effect on October 28, 2013
 

New rules from the Consumer Financial Protection Bureau (CFPB) regulating international money transfers will take effect on October 28, 2013, after being delayed and revised following complaints from the financial industry that the regulations would put them out of business, according to a press release from the bureau (see our Dec 26, 2012, blog post for more information). The revised rule requires remittance providers to disclose that fees and foreign taxes may apply to a transfer, but no longer requires them to specifically disclose each fee or foreign tax, The Wall Street Journal reports. The rule also requires that remittance providers "attempt to recover the funds" if a sender uses the wrong account number, but no longer requires them to "bear the cost of funds that cannot be recovered," the release said. For more, read the full Wall Street Journal story (subscription required) and CFPB press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Apr 30, 2013

CFPB amendment to CARD Act enables stay-at-home partners to get credit
 

Yesterday, the Consumer Financial Protection Bureau (CFPB) released an amendment to the Credit Card Accountability Responsibility and Disclosure Act (CARD Act) that makes it easier for stay-at-home spouses and partners with access to a working partner's income to get a new credit card or an increased credit limit, according to a press release from the bureau. The amendment revises the CARD Act requirement that a card issuer "evaluate a consumer's ability to pay before opening a new credit card account or increasing a credit limit" to allow consideration of not only the applicant's independent income or assets, but also "third-party income if the applicant has a reasonable expectation of access to it." For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Apr 19, 2013

CFPB report finds that confusing financial advising credentials are used to defraud older Americans
 

According to a report recently released by the Consumer Financial Protection Bureau (CFPB), older Americans are at risk of being deceived by the more than 50 different designations that financial advisers use "to indicate that they have advanced training or expertise in the financial needs of older consumers." The report, titled "Senior Designations for Financial Advisers: Reducing Consumer Confusion and Risks," found that the requirements, examinations and oversight can differ significantly for similar sounding designations. Lacking "comprehensive supervision and enforcement," these credentials are used to defraud older Americans, whose retirement savings, inheritance and accumulated home equity can make them "attractive targets for the marketing of various financial products," the release said. For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory   |   Permalink

 

Apr 04, 2013

CFPB announces enforcement actions against four mortgage insurance companies for illegal kickbacks to lenders
 

In Washington, D.C., today, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray announced that four mortgage insurance companies are facing enforcement actions for illegally providing inflated "reinsurance" payments to mortgage lenders "in exchange for referring business to them," according to a press release from the bureau. The CFPB’s investigation revealed that these mortgage insurance companies used subsidiaries to funnel millions of dollars to lenders as payments for reinsurance, which is additional insurance to protect lenders against the risk of default on loans made to home buyers that "cannot make a 20 percent down payment," the release said. For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Mar 28, 2013

CFPB's Consumer Complaint Database expands its coverage to include an array of financial services
 

In an effort to increase transparency within the consumer financial services market and to encourage civic participation in reform efforts, the Consumer Financial Protection Bureau (CFPB) announced today that its Consumer Complaint Database has been expanded "from about 19,000 credit card complaints to more than 90,000 complaints on mortgages, student loans, bank accounts and services, other consumer loans, and credit cards" — making it the largest collection of federal consumer financial complaint data in the nation, according to a press release from the bureau. The database is updated daily with complaints involving approximately 450 companies so far, and each database entry includes "the type of complaint, the date of submission, the consumer's ZIP code, and the company that the complaint concerns." Providing the hashtag #CFPBdata for sharing ideas, the bureau encourages "consumers, analysts, developers, data scientists, civic hackers, and companies that serve consumers" to analyze, augment and mash the data with other public sets so as to "highlight innovative uses" and make the data as contributive as possible toward the bureau's efforts. CFPB Director Richard Cordray announced the expansion of the database during a consumer response field hearing in Des Moines, Iowa. For more, read the full press release and Director Cordray's prepared remarks, and access the Consumer Complaint Database.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Mar 28, 2013

CFPB's Consumer Complaint Database expands its coverage to include an array of financial services
 


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Mar 22, 2013

New guidance from the CFPB aims to stop illegal discriminatory markup on car loans
 

The Consumer Financial Protection Bureau (CFPB) released a bulletin yesterday that provides "guidance to indirect auto lenders within the CFPB's jurisdiction on how to address fair lending risk," according to a press release from the bureau. Unlawful, discriminatory pricing may be responsible for "tens of millions of dollars in consumer harm each year" with discretionary "dealer markups" on car loans causing African Americans and Hispanics to be "charged higher markups than other, similarly situated, white consumers." For more, including links to the bulletin, a fact sheet on the bulletin and an infographic on auto lending, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Mar 19, 2013

CFPB Director Richard Cordray explains proposed rule on student loan servicers
 

During a press call in Washington, D.C., last week, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray discussed the bureau's proposed rule to redefine certain student loan servicers so that they fall under the authority of the CFPB. Cordray said that because borrowers have "no control or choice over which company services a loan," complaints abound from borrowers over a lack of customer service and the availability of information from these servicers. With student loan debt totaling more than $1 trillion by the end of 2012, Cordray said that the "rapid growth of this market and the recent rise of delinquency rates" demands the bureau's attention. For more, read the full story.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Mar 18, 2013

Proposed rule would enable the CFPB to monitor larger nonbank student loan servicers
 

Last week, the Consumer Financial Protection Bureau (CFPB) announced a proposed rule that would expand federal supervision over student loan servicers beyond larger banks to include certain nonbanks for the first time, according to a press release from the bureau. Nonbank student loan servicers that handle more than 1 million borrower accounts for either federal or private student loans would be classified as "larger participants," allowing the CFPB to monitor them for compliance with federal consumer financial laws. With this new definition, the bureau would have the authority to supervise "the seven largest student loan servicers," which manage a combined 49 million borrower accounts. The rule comes as part of the bureau's ongoing efforts to monitor and regulate the student loan industry (see our December 17, 2012, blog post for more information). For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Mar 11, 2013

Register now for the Bank Safety & Soundness Advisor’s webinar on QMs and ATP rules
 

Bricker & Eckler Partner Anthony Sharett will be among a panel of experts who will present during the Bank Safety & Soundness Advisor’s upcoming webinar on the impact of the new qualified mortgage (QM) and ability to repay (ATP) rules recently released by the Consumer Financial Protection Bureau (CFPB). The 90-minute webinar — scheduled for Tuesday, March 26, at 2 p.m. EST — will address the types of loans that fit the CFPB’s new definition for qualified mortgages, what it means to qualify for ability to repay (ATR) standards, and how these new rules will impact the profitability of mortgages. For more, including registration information, visit the webinar website.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Feb 27, 2013

CFPB Director Richard Cordray highlights the bureau’s successes during a national credit union meeting in Washington, D.C.
 

At the Credit Union National Association’s 2013 Governmental Affairs Conference in Washington, D.C., today, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray praised credit unions for serving as “the true consumer protectors” before the bureau was established, according to his prepared remarks. He also explained that since most credit unions do not fall under the bureau’s supervision because they have $10 billion or less in assets, the CFPB created the Credit Union Advisory Council to fill in the gap of day-to-day contact between the bureau and credit unions. Director Cordray then provided in-depth explanations of the bureau’s Ability-to-Repay rule (otherwise known as the Qualified Mortgage rule) as well as its implementation of common-sense requirements for mortgage servicers, saying that small institutions like credit unions are exempt from several of these rules’ provisions due to the bureau’s “recognition and acknowledgement that the traditional credit union lending model is deserving of respect and should be treated differently under our rules.” For more, read the full transcript of Director Cordray’s remarks. 


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory  National Credit Union Administration   |   Permalink

 

Feb 26, 2013

CFPB Director Richard Cordray outlines the bureau's efforts during a national attorneys general meeting in Washington, D.C.
 

At the 2013 winter/spring meeting of the National Association of Attorneys General in Washington, D.C., today, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray spoke about the work the bureau is doing to create "a fairer, more transparent marketplace — one where prices and risks are made clear and where consumers are protected against fraud," and how those efforts are helped through collaboration with state governments, according to his prepared remarks. Efforts include creating new rules to protect against excesses and irresponsible practices in the mortgage market; regulating and monitoring the credit card market as well as the student loan industry; developing tools to help consumers navigate the financial market; and simplifying loan forms. For more, read the full transcript of Cordray’s prepared remarks.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Feb 22, 2013

CFPB works to develop alternative repayment options for private student loan borrowers
 

Yesterday, the Consumer Financial Protection Bureau (CFPB) released a Notice and Request for Information in the Federal Register as part of its ongoing effort of devising ways to give private student loan borrowers “more flexible repayment options,” according to a press release from the bureau. Such borrowers are having “trouble negotiating affordable repayment plans with their lenders and servicers” on private loans, which — unlike federal student loans — offer no income-based repayment, long-term forbearance or rehabilitation options if the borrower defaults. According to the release, the bureau is seeking input on the following issues:

  • How student loan burdens might impact the broader economy and hinder access to mortgage credit and automobile loans;
  • How distressed borrowers manage their student loan obligations;
  • What options currently exist for borrowers to lower their monthly payments on private student loans;
  • Examples of successful alternate payment programs in other markets and which features could apply to this market; and
  • The most effective mechanisms for communicating with distressed borrowers.

Comments will be accepted until April 8, 2013. For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Feb 13, 2013

CFPB announces implementation plan for new mortgage rules
 

The Consumer Financial Protection Bureau (CFPB) announced a plan today that it will implement during 2013 to help ensure that the mortgage industry is in compliance with new consumer protections that are set to go into effect in January 2014, according to a press release from the bureau. To ensure that the Ability-to-Pay rule, as well as new rules for mortgage servicing, appraisals, escrow accounts, high-cost mortgages, and compensation and qualifications for loan originators are “understood, applied, and carried out evenly and effectively,” the CFPB will take the following actions:

  • Coordinate with other federal government regulators to help promote “a consistent regulatory experience for industry”
  • Publish plain-language, easy-to-understand written and video guides this spring that will be especially useful for “smaller businesses with limited staff for compliance”
  • Beginning in the spring, publish updates to official interpretations that will answer questions and provide guidance on how to comply with the rules with priority given to the issues that are important to the largest number of providers or consumers and those that “critically affect mortgage companies’ implementation decisions”
  • Publish readiness guides in the summer that will feature checklists and suggested implementation plans, and later this year publish more in-depth implementation procedures that can be used for “self-assessments and internal reviews”
  • Pursue a broad-reaching consumer education program as the implementation date approaches

For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory   |   Permalink

 

Feb 07, 2013

OCC clarifies CFPB’s final rule for reporting thresholds
 

The Office of the Comptroller of the Currency (OCC) recently released a bulletin to explain that because the Consumer Financial Protection Bureau (CFPB) “raised the asset size exemption threshold to $42 million for depository institutions” with respect to the requirements of Regulation C — which implemented the Home Mortgage Disclosure Act (HMDA) — institutions with “assets of $42 million or less as of December 31, 2012,” will not be required to collect HMDA data in 2013. The adjustment, which raises the threshold from $41 million to $42 million, is effective for data collection in 2013 and does not affect “the institution’s responsibility to report data” that it was required to collect in 2012, the bulletin said. For more, read the full bulletin.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory  Office of the Comptroller of the Currency    |   Permalink

 

Jan 31, 2013

Steven Antonakes named acting deputy director of the CFPB
 

Today — Raj Date’s last day serving as deputy director of the Consumer Financial Protection Bureau (CFPB) — the bureau announced that Steven Antonakes will temporarily serve as deputy director of the agency while still maintaining his current duties as the bureau’s associate director of supervision, enforcement, and fair lending, according to a press release from the CFPB (see our November 14, 2012, blog post for more information). For more, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Jan 31, 2013

CFPB seeks comment on campus financial products marketed to students
 

The Consumer Financial Protection Bureau (CFPB) announced today that it is launching an inquiry into the financial products and services that are marketed to students through universities and colleges to determine “whether these arrangements are in the best interest of students,” according to a press release from the bureau. Although the Credit CARD Act of 2009 “restricted financial institutions from using certain types of marketing practices on college campuses” and made agreements between financial and academic institutions subject to public disclosure, certain campus financial products — including school-affiliated bank accounts, student ID cards that double as debit cards, and cards used to access student loans and scholarships — fall outside the scope of the CARD Act. The bureau is seeking comment from families, students, the public, the higher education community and financial institutions regarding their experiences with these products. For more, including a guide to financial services for college students and a consumer advisory for students about potential financial pitfalls, read the full press release.


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Federal Regulatory   |   Permalink

 

Jan 30, 2013

Companies consider balking at the CFPB’s requirements as the validity of Director Cordray’s appointment hangs in the balance
 

Since the U.S. Court of Appeals for the D.C. Circuit ruled last week that three recess appointments made by President Obama were invalid, companies subject to oversight by the Consumer Financial Protection Bureau (CFPB) are questioning whether the fact that CFPB Director Richard Cordray’s appointment was made on the same day will be a potential game changer, The National Law Journal reports (see our January 25, 2013, blog post for more information). The Dodd-Frank Act of 2010 prohibits the CFPB from using any powers that it didn’t inherit from seven other agencies if it doesn’t have a director, which means the agency cannot supervise non-banks if it doesn’t have a director, the article said. While some of these companies may decide to balk at the bureau’s compliance demands should Cordray’s appointment be deemed invalid, some lawyers are advising against this, insisting that the bureau is not going anywhere and treating inspectors poorly while potential legal issues play out will not help these companies in the long run, the article said. For more, read the full story (subscription required).


 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank  Federal Regulatory   |   Permalink

 

Jan 25, 2013

Federal appeals court finds President Obama’s recess appointments unconstitutional
 

A three-judge panel of the U.S. Court of Appeals for the District of Columbia ruled today that President Barack Obama “violated the Constitution when he used controversial recess appointments last year to fill three vacancies on the National Labor Relations Board,” The Columbus Dispatch reports. The ruling could mean that President Obama’s recess appointment of former Ohio Attorney General Richard Cordray to head the Consumer Financial Protection Bureau last year may also be found unconstitutional since it took place on the same day as the three NLRB appointments — January 12, 2012. However, because the Obama administration