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Entries for category:   Dodd-Frank

 
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 09, 2014

Federal Reserve extends the Volcker Rule compliance deadline to July 21, 2017
 

This week, the Federal Reserve Board announced that it is giving banking entities two additional one-year extensions to "conform their ownership interests in and sponsorship of certain collateralized loan obligations covered by the Dodd-Frank Act's Volcker Rule (See our Dec 10, 2013, blog post – "Five federal financial agencies finalize the highly anticipated Volcker Rule"). The rule prohibits insured depository institutions and their affiliates from "engaging in proprietary trading and from acquiring or retaining ownership interests in, sponsoring, or having certain relationships with a hedge fund or private equity fund." According to Comptroller of the Currency Thomas J. Curry, the roughly 900-page rule is meant to "ensure that banks can't make speculative trades that are so large and risky that they threaten individual firms or the winder financial system." The Federal Reserve previously extended the conformance period for all activities and investments by one year to July 21, 2015. With the two additional one-year extensions, the new deadline is July 21, 2017. For more, read the full news release.


 
Posted by A. Sharett in  Dodd-Frank  Federal Deposit Insurance Corporation  Federal News  Federal Regulatory  Federal Reserve System   Office of the Comptroller of the Currency    |   Permalink

 

Apr 01, 2014

Ohio's biggest banks passed the Federal Reserve's Dodd-Frank Act stress test
 

Based on the results of the Dodd-Frank Act stress test, which were recently released by the Federal Reserve, Ohio's major deposit holders are sufficiently prepared for the following severe economic conditions: "unemployment jumps above 11 percent, housing prices plummet by a quarter and equity prices are cut in half," Columbus Business First reports. Of the 30 banks tested, only Salt Lake City-based Zions Bancorp would "have insufficient capital, under the worst circumstances, to meet the required 5 percent Tier 1 capital ratio – the percentage of a bank's capital to its risk-weighted assets," the article said. According to the results, the states seven largest banks would maintain the following capital ratio under severe economic conditions:

  • Fifth Third Bancorp, Ohio’s largest deposit holder, 8.4 percent
  • Huntington Bancshares, Inc., the state's second-largest deposit holder, 7.4 percent
  • U.S. Bancorp, the state's third-largest bank, 8.2 percent
  • PNC Financial Services Group Inc., the state's fourth-largest bank, 9 percent
  • JPMorgan Chase & Co., the state's fifth-largest bank, 6.3 percent
  • KeyCorp, the state's sixth-largest bank, 9.2 percent
Fore more, read the full story and the full Dodd-Frank Act Stress Test 2014: Supervisory Stress Test Methodology and Results March 2014.


 
Posted by A. Sharett in  Dodd-Frank  Federal News  Federal Regulatory  Federal Reserve System   Ohio News   |   Permalink

 

Mar 31, 2014

Illinois attorney general files first-of-its-kind lawsuit asserting Dodd-Frank enforcement authority
 

CFPB Monitor reports that the Illinois attorney general has filed what appears to be the first "state court lawsuit against a small loan lender alleging violations of the Dodd-Frank Act prohibition of unfair, deceptive or abusive acts or practices in addition to state law." In the complaint, Illinois Attorney General Lisa Madigan alleges that CMK Investments, Inc. "misrepresented the true cost of its loans" and that its "loan product was 'structurally unfair' because the account protection fee resulted in 'an endless cycle of debt.'" For more, including the complaint, read the full story.


 
Posted by A. Sharett in  Dodd-Frank  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 24, 2014

OCC adopts new interagency procedures for the new mortgage rules
 

The Office of the Comptroller of the Currency (OCC) recently adopted interagency examination procedures reflecting new mortgage rules requirements pursuant to the Dodd-Frank Act. These new procedures are currently being incorporated into the Comptroller's Handbook "Consumer Compliance" series. The new procedures were "developed and adopted on an interagency basis to promote consistency in the examination process and communication of supervisory expectations" (See our Feb 26, 2014, blog post for more information). For more, read the full news release.


 
Posted by A. Sharett in  Dodd-Frank  Federal Regulatory  Office of the Comptroller of the Currency    |   Permalink

 

Mar 12, 2014

Three federal financial regulatory agencies issue final stress test guidance for medium-sized firms
 

The Federal Deposit Insurance Corporation (FDIC), the Federal Reserve and the Office of the Comptroller of the Currency (OCC) recently issued final stress test guidance for medium-sized firms with total consolidated assets between $10 billion and $50 billion. A provision in the Dodd-Frank Act requires these companies to conduct annual, company-run stress tests under rules issued by the agencies in October 2012. The first stress tests must be performed by March 31, 2014. For more, read the full news release.


 
Posted by A. Sharett in  Dodd-Frank  Federal Deposit Insurance Corporation  Federal Reserve System   Office of the Comptroller of the Currency    |   Permalink

 

Feb 26, 2014

FDIC releases interagency consumer compliance examination procedures for new mortgage rules pursuant to the Dodd-Frank Act
 

As part of the Federal Deposit Insurance Corporation's (FDIC) ongoing efforts to inform supervised institutions about important bank regulatory developments in order to promote transparency in its supervisory program, the FDIC recently released revised interagency consumer compliance examination procedures for the mortgage rules issued pursuant to the Dodd-Frank Act. These rules apply to all FDIC-supervised institutions. The revised procedures will be used to evaluate institutions' compliance with the Ability-to-Repay/Qualified Mortgage Rule, the Loan Originator Compensation Rule, the Mortgage Servicing Rules, the High-Cost Mortgage and Homeownership Counseling Amendment Rule, the Higher-Priced Mortgage Loan (HPML) Escrow Rule, the HPML Appraisal Rule and the Equal Credit Opportunity Act (ECOA) Appraisal Rule. For more, read the full news release.


 
Posted by A. Sharett in  Dodd-Frank  Federal Deposit Insurance Corporation  Federal Regulatory   |   Permalink

 

Feb 18, 2014

Federal Reserve approves final rule establishing prudential standards for liquidity, risk management and capital
 

Today, the Federal Reserve Board approved a final rule that establishes a number of enhanced prudential standards for liquidity, risk management and capital for large U.S. bank holding companies and foreign banking organizations to help increase the resiliency of their organizations. It also "requires a foreign banking organization with a significant U.S. presence to establish an intermediate holding company over its U.S. subsidiaries, which will facilitate consistent supervision and regulation of the U.S. operations of the foreign bank." The rule was required by the Dodd-Frank Act. For more, read the full news release.
 
Posted by A. Sharett in  Dodd-Frank  Federal Regulatory  Federal Reserve System    |   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 07, 2014

Comptroller of the Currency Thomas J. Curry testifies before a Senate committee on the OCC's implementation of the Dodd-Frank Act
 

On Thursday, Comptroller of the Currency Thomas J. Curry testified before the U.S. Senate Committee on Banking, Housing and Urban Affairs on the OCC's implementation of the Dodd-Frank Act. In addition, Comptroller Curry discussed what his office is doing to both "improve the security of consumer financial information held by national banks and federal savings associations" and "improve its supervisory processes." The day before, Comptroller Curry testified about the Volcker Rule before the U.S. House Committee on Financial Services (See our Feb 5, 2014, blog post for more information). For more, read the full news release, which includes his written testimony and oral statement.


 
Posted by A. Sharett in  Dodd-Frank  Federal Regulatory  Office of the Comptroller of the Currency    |   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 16, 2014

Five federal agencies approve an interim final rule authorizing banks to retain interests in certain collateralized debt obligations backed by bank-issued trust preferred securities
 

On Wednesday, five federal agencies – the Commodity Futures Trading Commission, the Federal Reserve Board, the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC) and the Securities and Exchange Commission (SEC) approved an interim final rule outlining the qualifications that must be met in order for banking entities to retain an interest in or sponsorship of certain collateralized debt obligations backed primarily by trust preferred securities (TruPS CDOs) from the investment prohibitions of section 619 of the Dodd-Frank Act's Volcker Rule (See our Dec 23, 2013, blog post for more information). They are accepting comment on the rule for 30 days. Under the interim final rule, the qualifications that must be met are that:

  • the truPS CDO was established and the interest was issued before May 19, 2010;
  • the banking entity reasonably believes that the offering proceeds received by the TruPS CDO were invested primarily in Qualifying TruPS Collateral; and
  • the banking entity's interest in the TruPS CDO was acquired on or before December 10, 2013, which is the date that these agencies issued final rules implementing section 619.

For more, read the full news release.


 
Posted by A. Sharett in  Dodd-Frank  Federal Deposit Insurance Corporation  Federal Regulatory  Federal Reserve System   Office of the Comptroller of the Currency    |   Permalink

 

Jan 13, 2014

Federal Reserve and FDIC release public portions of 116 institutions' resolution plans
 

Today, the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve Board made public portions of the resolution plans from the latest group of institutions to file with the two agencies. As required by the Dodd-Frank Act, all bank holding companies with total consolidated assets of $50 billion or more as well as certain nonbank financial institutions must periodically submit these plans to the agencies. The plan "must describe the company's strategy for rapid and orderly resolution in the event of material financial distress or failure of the company." The portions made available today come from the resolutions submitted by 116 institutions in December 2013. Public portions of all resolutions submitted to date are available on both the Federal Reserve and FDIC websites. For more, read the full news release.


 
Posted by A. Sharett in  Dodd-Frank  Federal Deposit Insurance Corporation  Federal Reserve System    |   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

 

Dec 30, 2013

Volcker Rule could impact regional banks as well as large banks
 

The long-anticipated Volcker Rule, as set forth in the Dodd-Frank Act, "prohibits banks from engaging in proprietary trading or owning of their own hedge funds," and might not just impact large banks, but small and midsize banks, as well, Columbus Business First reports (See our Dec 17, 2013, blog post for more information). While JP Morgan Chase & Co. did not comment on how this rule will impact its operations in Central Ohio, Huntington Bancshares Inc. said in its latest annual report that it does not "anticipate that impacts of the proposed rules will be material to [its] results of operations or financial position." The research firm SNL Financial, however, said that banks with assets between $10 billion and $50 billion "will see an added compliance burden," the article said. The rule goes into full effect July 21, 2015. For more, read the full story.


 
Posted by A. Sharett in  Dodd-Frank  Federal Deposit Insurance Corporation  Federal Reserve System   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 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 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 10, 2013

Five federal financial agencies finalize the highly anticipated Volcker Rule
 

After two years of work, five federal financial regulatory agencies today finalized the highly anticipated Volcker Rule as required by the 2010 Dodd-Frank Act, Reuters reports. The Commodity Futures Trading Commission, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Federal Reserve Board, and the Securities and Exchange Commission approved the roughly 900-page rule, which aims to "ensure that banks can't make speculative trades that are so large and risky that they threaten individual firms or the wider financial system." According to the Federal Reserve Board, the final rules "provide exemptions for certain activities, including market making, underwriting, hedging, trading in government obligations, insurance company activities, and organizing and offering hedge funds or private equity funds." The activities and investments of covered banking organizations must be in compliance by July 21, 2015; however, "a banking entity that does not engage in covered trading activities will not need to establish a compliance program." The final rules also clarify that "certain activities are not prohibited, including acting as agent, broker or custodian." For more, read the full story and press release.


 
Posted by A. Sharett in  Dodd-Frank  Federal Deposit Insurance Corporation  Federal Regulatory  Federal Reserve System   Office of the Comptroller of the Currency    |   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 02, 2013

OCC releases the 2014 economic and financial market scenarios for large bank stress tests
 

This week, the Office of the Comptroller of the Currency (OCC) announced the "economic and financial market scenarios that will be used in the next round of stress tests for large financial institutions," which is required by the Dodd-Frank Act. The rule applies to all financial institutions with total consolidated assets greater than $10 billion. The OCC also issued the final "Policy Statement on the Principles for Development and Distribution of Annual Stress Test Scenarios," which outlines the "consultative processes that the OCC will use to gather information on material vulnerabilities or salient risks" and to coordinate with the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC). For more, read the full press release.


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

 

Sep 26, 2013

Federal Reserve Board issues two interim final rules clarifying how companies should incorporate the Basel III regulatory capital reforms
 

This week, the Federal Reserve Board issued two interim final rules that clarify how companies "should incorporate the Basel III regulatory capital reforms into their capital and business projections during the next cycle of capital plan submissions and stress tests." The first interim final rule clarifies that bank holding companies with $50 billion or more in total consolidated assets "must incorporate the revised capital framework into their capital planning projections and into the stress tests" required under the Dodd-Frank Act. The second interim final rule provides "a one-year transition period for most banking organizations with between $10 billion and $50 billion in total consolidated assets." These interim final rules are effective immediately. For more, read the full press release.


 
Posted by A. Sharett in  Dodd-Frank  Federal Reserve System    |   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 05, 2013

Federal financial agencies seek comment on Dodd-Frank Act stress test guidelines for medium-sized financial companies
 

The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (COC) are requesting comment on "proposed guidance describing supervisory expectations for stress tests conducted by" medium-sized financial companies with total consolidated assets between $10 billion and $50 billion. The Dodd-Frank Act made annual stress tests by such institutions mandatory, with implementation beginning this fall. The public comment period closes on September 25, 2013. For more, read the full press release.


 
Posted by A. Sharett in  Dodd-Frank  Federal Deposit Insurance Corporation  Federal Reserve System   Office of the Comptroller of the Currency    |   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

 

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

 

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 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

 

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

 

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

 

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 19, 2013

CFPB and Federal Reserve issue appraisals rule for higher-priced mortgage loans
 

The Consumer Financial Protection Bureau (CFPB) has been busy. In the past eight days, it has issued the much anticipated qualified mortgage standards, amended the high-cost mortgage and homeownership counsel amendments (HOEPA), and, most recently, issued a rule regarding appraisals for higher priced (subprime) mortgage loans (HPMLs) on January 18, 2013. 

This rule implements amendments to the Truth in Lending Act (TILA) enacted in Dodd-Frank. The rule permits a lender to extend an HPML only if the following conditions are met:

  • The lender obtains a written appraisal;
  • The appraisal is performed by a licensed or certified appraiser; and
  • The appraiser physically inspects the property from the inside.

What’s more, the rule requires lenders to notify the borrower at the application stage about the appraisal, that the applicant will receive a copy of the appraisal, the applicant will pay for the appraisal, and that the applicant may have a separate appraisal conducted at her expense.

Importantly, mortgages provided under the new qualified mortgage rule are exempt from this new rule as are reverse mortgages, some construction loans, short-term bridge loans, loans for manufactured homes, and transactions secured by a mobile home, boat or trailer. The rule is effective January 18, 2014. A link to the entire appraisal rule is here


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

 

Jan 11, 2013

CFPB issues final rules for high-cost mortgages
 

The Consumer Financial Protection Bureau (CFPB) issued final rules yesterday for high-cost mortgages that ban balloon payments, which are large, lump sum payments usually due at the end of a loan, with some exceptions. The rules also ban and limit certain fees and practices, including a ban on fees for modifying loans; capping late fees at four percent of the payment that is past due; prohibiting closing costs from being rolled into the loan amount; and restricting fees for payoff statements, according to a press release from the bureau. The rules also ban the practice of “encouraging a consumer to default on an existing loan to be refinanced by a high-cost mortgage.” The rules require consumers to receive housing counseling before taking out a high-cost mortgage and require lenders to provide a list of homeownership counseling organizations to consumers “shortly after they apply for a mortgage.” Creditors are now also required to extend the duration of an escrow account on high-cost mortgage loans from the current one year minimum to a minimum of five years. For more, read the full press release.


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

 

Jan 10, 2013

CFPB issues ability-to-repay rule and defines “qualified mortgage”
 

The Consumer Financial Protection Bureau (CFPB) adopted the ability-to-repay rule today, which requires lenders to “ensure prospective buyers have the ability to repay their mortgage” in an effort to protect consumers from what the bureau calls “irresponsible mortgage lending,” a press release from the CFPB said. The rule requires lenders to verify consumers’ financial information, including their employment status, income and assets, current debt obligations, credit history and mortgage payment information, the release said. The new rule also says that lenders must verify that a borrower has “sufficient assets or income” to repay a loan and that teaser rates can no longer be used to determine a borrower’s ability to repay “both the principal interest and the interest over the long term.”

The bureau also defined criteria for qualified mortgages — they cannot have excessive upfront points and fees or “toxic loan features,” such as interest-only payments, terms exceeding 30 years or negative-amortization payments, the release said. Qualified mortgages will also cap the debt-to-income ratio at 43 percent or less to ensure that consumers can afford the loan.

For more, read the full press release and fact sheet, as well as prepared remarks that CFPB Director Richard Cordray presented during the ability-to-pay rule field hearing.


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

 

Dec 03, 2012

Amendments to S.B. 333 seek to align Ohio law with provisions of the Dodd-Frank Act
 

Arguments for two amendments to S.B. 333, which allows officers going from depository to non-depository institutions to get a temporary license while they pass both a state and federal test for a non-deposition license, were heard last week and accepted without opposition, reporting the bill out unanimously, according to The Hannah Report and Gongwer. The first amendment prevents a “legal vacuum” and maintains the “current status quo,” ensuring statutory law on a kind of international funds transfers known as remittance transfers, the Gongwer article said. The second amendment would enable Ohio to regulate derivative transactions so that Ohio banks are on “equal footing with national banks and banks chartered by other states, which, due to changes in their laws, are able to continue to engage in risk-mitigating transactions,” the Gongwer article said.


 
Posted by A. Sharett in  Dodd-Frank  Ohio Regulatory   |   Permalink

 

Nov 15, 2012

New CFPB initiative encourages consumer-friendly innovation
 

The Consumer Financial Protection Bureau (CFPB) recently announced the launch of Project Catalyst, an initiative that seeks to “encourage consumer-friendly innovation and entrepreneurship in markets for consumer financial products and services,” according to a press release from the bureau. Project Catalyst will enable the CFPB to better engage with those companies at the forefront of innovation and to better understand new and emerging products and trends in the marketplace. The bureau has already partnered with three companies — BillGuard, Plastyc and Simple — with the intention of analyzing their data to gain insight about “consumer behaviors and trends” that will ultimately shape policy decisions, the release said. For more, read the press release.


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

 

Nov 09, 2012

What the election results mean for Dodd-Frank and the CFPB
 

Many in the financial services industry were watching the presidential election results closely. This is particularly true of the companies within the financial services industry under the regulatory and enforcement purview of the Consumer Financial Protection Bureau (CFPB).  

Presidential candidate Mitt Romney had explained on the campaign trail that he would work diligently to repeal Dodd-Frank and disband the CFPB. He and others believe that the regulatory and enforcement powers of the CFPB are unchecked and have inundated the industry with unnecessary new rules and regulations. 

The House Committee on Financial Services recently announced that regulators have written 224 of the 400 new rules promulgated as a result of Dodd-Frank — these rules consume 7,365 pages. 

But despite the opposition to Dodd-Frank and the CFPB, President Barack Obama’s re-election means that both are here to stay. Indeed, President Obama has made consumer protection a focus in his first administration and all signs suggest that will continue. What’s more, with the election of Elizabeth Warren to the United States Senate, she will no doubt continue to champion causes aimed at consumer protection.

Recently, Director Cordray presented the five-year strategic plan for the CFPB. Now, it appears that the plan is even more relevant than it was just a few weeks ago.


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

 

Oct 15, 2012

Comptroller of the Currency Thomas J. Curry addressed the American Bankers Association today
 

Today, Comptroller of the Currency Thomas J. Curry spoke at the American Bankers Association’s national convention in San Diego, California, about regulatory issues facing federal savings associations and national banks, according to a press release from the OCC. Curry addressed the various concerns these institutions have regarding implementation of the Dodd-Frank Act, with particular attention paid to how smaller community banks can achieve compliance. For more, read the press release and Curry’s prepared remarks.


 
Posted by A. Sharett in  Dodd-Frank  Federal Regulatory  Office of the Comptroller of the Currency    |   Permalink

 

Oct 10, 2012

OCC releases final rule for large bank stress tests
 

Yesterday, the Office of the Comptroller of the Currency (OCC) announced the publication of its final rule regarding company-run stress testing, which is required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The rule applies to all financial institutions with total consolidated assets greater than $10 billion that are “regulated by a primary federal financial regulatory agency,” according to a press release from the OCC. The rule requires institutions with average total consolidated assets of $50 billion or more to begin conducting annual stress tests this year, but delays implementation for institutions that have between $10 and $50 billion in total consolidated assets until October 2013, the release said. For more, read the press release and the final rule.


 
Posted by A. Sharett in  Dodd-Frank  Federal Regulatory  Office of the Comptroller of the Currency    |   Permalink

 

Sep 30, 2012

Sharett to join panel at MBA Regulatory Compliance Conference
 

On September 30, 2012, Anthony Sharett will be a panelist for the Litigation Forum Session titled "Enforcement" at the Mortgage Bankers Association's Regulatory and Compliance Conference. The session focuses on the array of enforcement actions brought by state and federal regulators and strategies for addressing them. Joining Anthony on the panel will be Paul Hancock, an attorney with K&L Gates, and David Souders, an attorney with Weiner Brodsky Sidman Kider PC.

The three day conference is in Washington, D.C. More information can be found here.


 
Posted by A. Sharett in  Dodd-Frank  Federal Regulatory  Ohio Regulatory   |   Permalink

 

Sep 28, 2012

CFPB to host webinar on new remittance rule, releases list of countries that qualify for exception
 

The Consumer Financial Protection Bureau’s new remittance rule, which creates consumer protections for certain electronic transfers to other countries, will go into effect on February 7, 2013. The bureau is hosting a webinar on Tuesday, October 16, 2012, to help the financial industry understand and comply with the rule. In addition, they are releasing a small business guide and a list of “countries and other areas to which a particular exception to the rule’s disclosure requirements applies,” according to a press release from the bureau. For more, read the press release.


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

 

Sep 13, 2012

FDIC issues final rule on permissible investments for state and federal savings associations
 

The Office of the Comptroller of the Currency (OCC) has advised the chief executive officers of all national banks, federal savings associations, federal branches and agencies, department and division heads, and all examining personnel to review “the Federal Deposit Insurance Corporation’s (FDIC) final rule and guidance issued July 24, 2012, on investments in corporate debt securities,” according to a press release from the OCC. Federal savings associations must be in compliance with the FDIC’s final rule by January 1, 2013. The release also reminds these institutions that by January 1, 2013, they must be in compliance with the “OCC’s final rules and guidance regarding investments in other securities,” which was published on June 26, 2012. For more, read the OCC’s press release and read the FDIC’s final rule.


 
Posted by A. Sharett in  Dodd-Frank  Federal Regulatory   |   Permalink

 

Aug 21, 2012

Conservative foundation examines CFPB’s finances
 

Using financial records from the Consumer Financial Protection Bureau (CFPB) obtained under the Freedom of Information Act, Judicial Watch — a “conservative foundation aimed at fighting government corruption” — rebuked the bureau’s allocation of $465,000 for sign language translation services, its use of $4,500 to enroll six employees in a banking law fundamentals class, and the salaries of several of its employees, CNNMoney reports. The CFPB contends that the sign language services are required for ADA compliance and that any unused funds will be returned at the end of the year; that the banking law fundamentals class is considered a qualifying program for the continuing education requirements of the bureau’s enforcement attorneys; and that the Dodd-Frank Act sets the director’s salary and requires the salaries and benefits for employees of the bureau to be “comparable to the Federal Reserve Board and other federal financial regulators,” the article said. For more, read the full story.


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

 

Aug 16, 2012

Regulatory agencies propose rule on appraisals for higher-risk mortgages
 

Six federal financial regulatory agencies — the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, the National Credit Union Administration and the Office of the Comptroller of the Currency — issued a proposed rule yesterday that would establish new appraisal requirements for “higher-risk mortgage loans,” according to a joint press release from the agencies.

Under the Dodd-Frank Act, mortgage loans are deemed higher-risk if “they are secured by a consumer's home and have interest rates above a certain threshold.” The proposed rule would require creditors to “use a licensed or certified appraiser” to prepare “a written report based on a physical inspection” of the property and to “disclose to applicants information about the purpose of the appraisal,” the release said. Additionally, to address fraudulent property flipping, creditors would be required to “obtain an additional appraisal at no cost to the consumer for a home-purchase higher-risk mortgage loan if the seller acquired the property for a lower price during the past six months,” the release said.

For more information, including the Federal Register notice as well as information on submitting comments about the proposal, read the press release.


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

 

Aug 10, 2012

CFPB proposes rules to protect homeowners from mortgage servicer mistakes and surprises
 

The Consumer Financial Protection Bureau (CFPB) announced today two sets of proposed rules intended to enhance consumer protections with regard to the process for “evaluating consumers for alternatives to foreclosure” and to “lessen potential burdens on small servicers,” according to a press release from the bureau. The proposed rules are in response to complaints of mortgage servicers losing applications and paperwork, and making it exceptionally difficult to correct errors when they do arise, the release said.

The first set of proposed rules aims to help consumers avoid costly surprises by providing them with “clear and timely information about their mortgages,” the release said. Those rules include: clear monthly mortgage statements; warnings before interest rates adjust; options for avoiding costly “force-placed” insurance; and early information and options for avoiding foreclosure. The second set of rules would dictate “requirements for handling consumer accounts, correcting errors, and evaluating borrowers for options to avoid foreclosure,” the release said. Those rules include: payments promptly credited; maintenance of accurate and accessible documents and information; errors corrected quickly; direct and ongoing access to servicer personnel to assist delinquent borrowers; and evaluation of borrowers for options to avoid foreclosure.

For more information on the proposed rules, read the press release.


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

 

Jul 31, 2012

CFPB’s semi-annual report showcases 2012 highlights
 

In its semi-annual report released this week, the Consumer Financial Protection Bureau (CFPB) showcased several of the activities in which it has been engaged since the start of 2012. According to a press release from the bureau, highlighted activities, accomplishments and achievements include:

  • Consumer Engagement: The CFPB regularly requests input from consumers to help guide its policies for regulation and enforcement. The bureau also “helps resolve consumer disputes with lenders by taking complaints through its website and by telephone, mail, fax, and by referral from other agencies.”
  • Financial Education: The CFPB has designed a number of tools and resources, including a public database of complaints the bureau has received about financial products, to help consumers “make responsible financial decisions.”
  • Regulation: The bureau has taken a number of steps to reform the mortgage market, including writing rules that help consumers make informed decisions, simplifying mortgage disclosure forms, and bringing “greater transparency and accountability to mortgage servicing.”
  • Research: The CFPB has been conducting “in-depth studies on consumer financial products, such as reverse mortgages and private student loans,” and has issued numerous Requests for Information to gather input from consumers and industry participants on a range of pertinent issues.
  • Supervision: The bureau has been expanding its supervisory authority beyond larger banks and credit unions to include certain nonbank entities that have “never before been federally supervised.” This includes residential mortgage companies, payday lenders and private education lenders.
  • Enforcement: A recent CFPB investigation led to enforcement action against Capital One, including $140 million that will be returned to customers who were “wronged by the company.”

For more, read our review of the semi-annual report.


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

 

Jul 30, 2012

CFPB and U.S. Department of Education release report on the private student loan market
 

This month, the Consumer Financial Protection Bureau (CFPB) and the U.S. Department of Education released a report detailing the risky practices and loose underwriting in the private student loan market that has resulted in more borrowers and more debt, according to a press release from the bureau. Between 2001 and 2008, the private student loan market grew from less than $5 billion to over $20 billion as many lenders bypassed school financial aid offices and marketed loans directly to students, making money by “originating and then selling private student loans with less regard for borrowers’ creditworthiness,” the release said. The report features a list of recommendations for reforming the private student loan market. For more information, read the press release.


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

 

Jul 19, 2012

CFPB announces first enforcement action, targets Capital One
 

This week, the Consumer Financial Protection Bureau (CFPB) announced its first public enforcement action, charging Capital One Bank with employing deceptive marketing tactics to promote add-on credit card services such as payment protection and credit monitoring, according to a press release from the bureau. The action requires Capital One to “refund approximately $140 million to two million customers and pay an additional $25 million penalty,” the release said. For more information, read the press release.


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

 

Jul 02, 2012

New Rule for the Protection of Privileged Information
 

On June 28, the Consumer Financial Protection Bureau (CFPB) implemented a new rule to classify protections for privileged information submitted to the Bureau by the regulated financial institutions it oversees.

According to a press release on the CFPB’s website, the new rule “provides supervised entities further assurances that providing privileged information to the Bureau will not adversely affect the confidentiality of such information.” The rule also clarifies that the CFPB’s “transfer of privileged information to another Federal or State agency does not result in a waiver of any applicable privilege.”

For more, read here:


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

 

Jun 28, 2012

CFPB report: homeowners are confused about reverse mortgages
 

In a report released today, the Consumer Financial Protection Bureau (CFPB) found that few American consumers completely understand the reverse mortgage market, including the fact that property taxes and insurance must still be paid even with a reverse mortgage, according to a press release from the bureau. Additionally, the study found that consumers are getting reverse mortgages at younger ages and that 70 percent of borrowers take the proceeds as a lump sum payment, the release said. The bureau is seeking public input regarding reverse mortgages. For more, read the press release and the full report.


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

 

Jun 22, 2012

Texas community bank leads lawsuit against the CFPB
 

The State National Bank of Big Spring, a community bank in Texas, filed a lawsuit alleging that certain provisions of the Dodd-Frank Act are unconstitutional, particularly the creation of the Consumer Financial Protection Bureau (CFPB), American Banker reports. As the first known community bank to file a lawsuit against the CFPB, State National executives say that the bureau can “essentially determine who gets a home loan…credit card…and a loan for college” with a board that has “unlimited regulatory power” and a director who is “not accountable to Congress, the President or the Courts,” the article said. For more, read the full story.


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

 

Jun 20, 2012

CFPB to share consumer complaints with the public
 

In an effort to increase the efficiency and transparency of the credit card market, the Consumer Financial Protection Bureau (CFPB) will make available to the public the “individual-level consumer complaint data” it receives, according to a press release from the bureau. Although no personally-identifiable information will be available on the database, the bureau hopes to add similar data on other products, including “mortgages, student and other consumer loans, and other bank products (such as checking and savings accounts),” once the database progresses from its beta stage, the release said. 


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

 

Jun 18, 2012

CFPB conducting study of pre-dispute arbitration agreements
 

The Consumer Protection Financial Bureau (CFPB) issued a notice and request for information on the use of pre-dispute arbitration agreements for any future dispute between covered persons and consumers in connection with the offering or providing of consumer financial products or services. Comments regarding the scope, methods and data sources for conducting the study must be submitted on or before June 23, 2012. 


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

 

Jun 18, 2012

CFPB launches inquiry into financial dangers for older Americans
 

The Consumer Financial Protection Bureau (CFPB) recently announced a public inquiry to learn more about the financial exploitation of older Americans and best practices for financial management, according to a press release from the bureau. A recent industry study indicates a 12 percent increase in the amount of money scammed from elders from 2008 to 2010, the release said. 


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

 

Jun 06, 2012

Bank and credit union regulators to coordinate supervision under Dodd-Frank
 

The Federal Reserve Board, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Consumer Financial Protection Bureau recently signed an agreement to coordinate supervision of banks and credit unions with more than $10 billion in assets, American Banker reports. The agreement is intended to “minimize unnecessary regulatory burden, avoid duplicative efforts and reduce the risk of conflicting directives among supervisors,” the article said. For more, read the full story.


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

 

May 25, 2012

CFPB proposes procedural rule on supervising nonbanks
 

The Consumer Financial Protection Bureau (CFPB) proposed a rule yesterday that would "set up procedures to supervise nonbanks that may have engaged in activities that pose risks to consumers," according to a press release from the bureau. The proposed rule would establish procedures for the bureau to notify the nonbank that it is being considered for supervision as well as procedures for the bank to respond and even file a petition to "terminate supervision authority after two years," the release said.


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

 

May 22, 2012

CFPB requests advice on study of mandatory arbitration clauses
 

The Consumer Financial Protection Bureau (CFPB) is requesting public comment on how it should study mandatory arbitration clauses, according to a press release from the bureau. As part of the Dodd-Frank Act, the CFPB is required to study and regulate pre-dispute arbitration clauses in consumer financial markets, the release said. The bureau is requesting public comment regarding the following:

  • The prevalence of arbitration clauses in consumer financial products and services;
  • What claims consumers bring in arbitration against financial services companies;
  • If claims are brought by financial services companies against consumers in arbitration;
  • How consumers and companies are affected by actual arbitrations; and
  • How consumers and companies are affected by arbitration clauses outside of actual arbitrations.


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

 

May 15, 2012

Attorneys general seek to resolve systemic credit-reporting issues
 

A group of state attorneys general, led by Ohio's Mike DeWine, are working to address consumer complaints regarding credit-reporting agencies and may even file lawsuits under the Fair Credit Reporting Act, The Columbus Dispatch reports. Consumers who go through their state attorneys general to report credit issues are more likely to have their problems resolved than if they faced off against the credit-reporting agencies alone, the article said. For more, read the full story.


 
Posted by A. Sharett in  Dodd-Frank   |   Permalink

 

Apr 19, 2012

CFPB to hold financial institutions accountable for service provider relationships
 

The Consumer Financial Protection Bureau (CFPB) recently released a bulletin outlining the responsibility of supervised financial institutions to effectively manage risks associated with third-party service provider relationships. The Bureau will closely monitor “service providers’ interactions with consumers,” and will “hold all appropriate companies accountable when legal violations occur,” a press release from the Bureau said. Banks and nonbanks supervised by the CFPB are advised to conduct thorough due diligence “to ensure that business arrangements with service providers do not present unwarranted risks to consumers,” the press release said.


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

 

Apr 18, 2012

CFPB to hold industry discussion in Cleveland
 

The CFPB will hold an industry discussion in Cleveland, Ohio on April 27 featuring Director Richard Cordray and Deputy Director Raj Date as speakers.  Other key speakers will be Peggy Twohig, Assistant Director of Nonbank Supervision and Steve Antonakes, Assistant Director of Large Bank Supervision.  This event will be closed to the press.


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

 

Apr 12, 2012

CFPB proposes mortgage servicing rules
 

The Consumer Financial Protection Bureau recently announced proposed rules that would help homeowners manage issues with mortgage servicers, which collect payments on behalf of loan holders, a press release from the Bureau said. Such rules would require "principal, interest, fees, escrow and due dates" to be clearly explained on monthly mortgage statements and would also require warnings and explanations regarding certain adjustable rate mortgages before they change. Information on options for struggling borrowers will be offered more rapidly, as will options for avoiding "forced-placed" insurance, the release said. Additional proposals would require payments to be credited to consumer accounts "the day payment is received"; errors to be more quickly addressed and corrected; and ongoing direct access to service staff members available to homeowners.


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

 

Feb 15, 2012

CFPB wants feedback on its new monthly mortgage statement
 

The Consumer Financial Protection Bureau (CFPB) requested Monday that consumers, industry stakeholders, and other interested parties provide feedback on the draft prototype of the new monthly mortgage statement that it has developed as required in The Dodd-Frank Wall Street Reform and Consumer Protection Act.
 
The statement, which is designed to "make it easier for homeowners to understand their loans and avoid unnecessary costs and fees," will include the following information:

  • The principal loan amount
  • The current interest rate
  • The date on which the interest rate may next reset
  • A description of any late payment penalty fees
  • Information about housing counselors
  • A telephone number and email address that may be used to contact the mortgage servicer

For more, read the full CFPB press release here or view the draft mortgage statement here.


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

 

Feb 06, 2012

CFPB semi-annual report provides lenders with insight for things to come
 

In the next six months, the Consumer Financial Protection Bureau (CFPB) plans to issue a series of rules, orders, and other initiatives that are expected to broadly impact financial institutions and lenders. Among other lender related actions, the Bureau expects to issue final rules that will assist lenders in determining which borrowers have the ability to repay loans. The CFPB also plans to announce initial rules related to supervision and the definition of “larger participants," which is critical in determining which nonbanks outside of the residential mortgage, private education lending, and payday lending markets will fall under the scope of the CFPB supervision program. The Bureau will also announce final regulations establishing procedures for investigations, which may signal the start of enforcement actions in 2012. Read the full article here


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

 

Jan 30, 2012

CFPB releases semi-annual report
 

Today, the CFPB released its semi-annual report highlighting the bureau's accomplishments in its first six months.  This report coincides with Director Cordray's testimony before the Senate Committee on Banking, Housing, and Urban Affairs scheduled for January 31, 2012.   We will provide our commentary on the report in days to come.


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

 

Jan 29, 2012

CFPB examiners to focus on non-traditional loan products
 

In a speech to Congress on January 24, CFPB Director Richard Cordray explained that “gross imbalances in consumer financial markets, most notably in the mortgage market, were a significant cause of the recent financial crisis.” As we announced in our January 13 blog post, the bureau released its Mortgage Origination Examination Procedures (Procedures). These Procedures act as a field guide for examiners tasked with assessing mortgage brokers and bankers’ compliance with the new CFPB procedures and federal consumer laws.

The bureau explains that examination objectives are to assess the entities’ compliance systems in place, identify acts that increase risk of violations of federal consumer laws, fact-find, and determine if lenders have violated federal consumer laws or are guilty of an unfair, deceptive, or abuse act or practice (UDAAP) as outlined in the Dodd-Frank Act.

While the bureau will examine lenders providing traditional and conventional loans, there is no doubt that CFPB lenders have been tasked to pay heavy attention to lenders’ policies and procedures that provide “subprime” and “non-traditional loans.” The bureau defines subprime loans as those with higher interest rates and charge fees to compensate the lender for lending to borrowers with impaired credit. Non-traditional loans tend to be interest-only loans and pay option ARMs.

Once examiners determine that a lender offers subprime and non-traditional loans, the Procedures provide that examiners will determine if advertising and promotional materials provide clear and understandable information about the risks associated with those products. Likewise, examiners will want to see that lenders provide information enabling borrows to determine if the product meets the borrowers’ needs.

What’s more, if the lender originates high-cost mortgages whereby the APR will exceed 8 percentage points for first mortgages or 10 percent for second mortgages and/or high mortgage points are applied, examiners will determine whether the lender routinely provides certain TILA disclosures to borrowers.

Another area of focus for CFPB examiners will be underwriting guidelines of mortgage bankers. If the mortgage banker originates non-traditional high-cost loans, examiners will assess if the lender has complied with Regulation Z requirements, including obtaining required documentation of income and assets from the borrower. Also, examiners will determine if underwriting standards take adjusted payments into account in considering the borrower’s ability to repay the loan when the payment amount is expected to change. Mortgage bankers that obtain little documentation in conjunction with originating a non-traditional or subprime loan can expect extreme scrutiny.

Finally, examiners will have unfettered access to lenders’ internal and external documents and policies including, organizational charts, loan applications, internal notes, disclosures, underwriting guidelines, computer programs, compensation policies, audit and compliance reports, and advertisements. Hence, mortgage brokers and bankers should understand the potential examination risk involved when originating subprime and non-traditional mortgages.


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

 

Jan 26, 2012

CFPB mortgage team releases new disclosure prototypes
 

In late 2011, the CFPB rolled out its “Know Before You Owe” concept that provides the public with an opportunity to review and comment on real estate closing disclosure forms.  Real estate closing disclosure forms comprise of the Truth in Lending Act form and the RESPA HUD-1 Settlement Statement.  These forms are intended to help a homebuyer understand the key terms, conditions, and costs of the loan.

 

The bureau explains that consumers find real estate closing disclosure forms to be too complicated and cumbersome to understand.  After testing two template disclosure forms titled “Mimosa” and “Sassafras,” the bureau received comments about those forms.  With “Sassafras” winning out as being more consumer friendly, pleasing to the eye and better organized, the bureau recently posted two new template disclosure forms titled “ Butternut” and “Hemlock.”

 

Final template disclosure forms are due out in February 2012. 


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

 

Jan 26, 2012

OCC: not your typical "stress test"
 

On January 24, the Office of the Comptroller of the Currency (OCC) announced that it is seeking comment on a proposed Dodd-Frank rule requiring banks and thrifts with greater than $10 billion in assets (covered institutions) to conduct an annual "stress test."  The purpose of a stress test is to assess the institution’s capital adequacy and to "aid in identifying downside risks."  The rule would also require institutions to submit a report to the Federal Reserve Board with findings from the stress test.

The public comment period closes March 26, 2012. 


 
Posted by A. Sharett in  Dodd-Frank  Federal Regulatory   |   Permalink

 

Jan 24, 2012

CFPB and FTC agree to coordinate their consumer protection activities
 

On January 23, the Consumer Federal Protection Bureau (CFPB) and the Federal Trade Commission (FTC) signed a Memorandum of Understanding (MOU) to coordinate their consumer protection activities and to avoid duplicating law enforcement and regulatory actions at the federal level.

The Dodd-Frank Act requires the CFPB and the FTC to collaborate to ensure consistent regulatory treatment of consumer financial products and services. Jon Leibowitz, Chairman of the FTC, believes that “this agreement ensures that businesses will not be double-teamed by the two agencies.” Some of the coordinating efforts by the CFPB and the FTC outlined in the MOU include the following:

  • Regular meetings to coordinate upcoming law enforcement, rulemaking, and other activities;
  • Informing the other agency, absent exigent circumstances, prior to initiating an investigation or bringing an enforcement action. This notice will prevent duplicative or conflicting enforcement efforts and undue burdens on industry;
  • Consulting on rulemaking and guidance initiatives to promote consistency and reflect the experience and expertise of both agencies;
  • Cooperation on consumer education efforts to promote consistency of messages and maximum use of resources; and
  • Sharing consumer complaints among the agencies.

The MOU lasts for three years.


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

 

Jan 23, 2012

A day in the life of a payday lender examiner
 

Last week, the Consumer Financial Protection Bureau released examination procedures that will impact payday lending companies nationwide.  Examiners will be charged with meeting four examination objectives over five key areas of business to determine whether customers have been subject to unfair, deceptive, or abusive acts or practices (UDAAPs) as defined in the Dodd-Frank Act.  The consequences of a payday lender's non-compliant activity may range from administrative actions taken by the CFPB to substantial fines.  Read the full article here.
 
 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank   |   Permalink

 

Jan 22, 2012

CFPB sets new rules for international money transfers
 

For those who send money internationally, the CFPB issued new rules governing remittance transfers.   Among other requirements, the new disclosures will require companies providing international transfers to disclose the exchange rate, fees, and the amount of money to be delivered to the recipient in the foreign country.  Transmitting companies must also provide a receipt or proof of payment and tell the customer the date that the money will arrive to the recipient.

Companies now must investigate any reported problem with a transfer, and at times, a customer can be refunded or transfer without charge if money fails to arrive when promised.   These rules are effective January 2013.  These new rules will impact companies such as Western Union and MoneyGram who will now have to comply with the new requirements.  But the new rules likewise apply to banks, savings and loans companies and credit unions. 


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

 

Jan 20, 2012

Director Cordray lays out CFPB vision for payday lending reform at field hearing
 

Quoting Dr. Martin Luther King, Jr., in prepared remarks, CFPB Director Richard Cordray explained his vision for payday lending reform while at the same time telling the audience that he understands the need for payday loan products.  This field hearing occurred in Birmingham, Alabama on January 19th. 

 

Director Cordray provided a definition for payday loans and explained that lenders collect at least $7 billion annually in fees.  He said that now that the CFPB has the authority to examine non-bank lenders, “the Bureau will be giving payday lenders much more attention.”  He also mentioned that the CFPB will scrutinize bank products that provide short-term "advance" loans to customers.

 

Importantly, Director Cordray announced the unveiling of the Short-Term, Small Dollar Examination Procedures, a field guide for payday lending examiners to use nationwide.  We will be providing an analysis of the field guide in days to come.   


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

 

Jan 18, 2012

CFPB hosting payday loan hearing in Alabama
 

In what promises to be a watershed moment in the first days of Director Cordray’s leadership of the CFPB, the debate over the regulation of the payday loan industry will begin in Birmingham, Alabama on January 19th.   The CFPB will hold its first “field meeting” at Birmingham Convention Center.  The event was first scheduled to be held at the Birmingham Civil Rights Institute.  But due to the overwhelming response, it was moved to the larger location.

In addition to Director Cordray’s comments, the field hearing will include testimony from consumer groups, civil rights groups, industry representatives and members of the public.  It was no accident that the CFPB chose Alabama for its first hearing as it explains that Alabama is “a state with one of the highest number of payday lenders per capita in the country.”  Alabama does regulate payday loans and caps the loan amount to $500 and caps the interest rate that can be charged on the loan.  Check back soon as we will provide a recap of the field meeting discussion.


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

 

Jan 16, 2012

CFPB: Education loan and lender comment deadline approaches
 

The CFPB is accepting comments from the public regarding the produces and services currently offered by to or used by students and their families for financing post-secondary education.  The deadline for submitting comments to the CFPB is January 17, 2012.  Comments can be provided here. 

Under the Dodd-Frank Act, the CFPB will regulate companies that offer “private education loans” offered by schools or financial institutions to finance higher education.  This new regulatory authority does not, however, apply to Title IV federal loans.

Certainly, the CFPB is looking to tighten the existing disclosures provided by private education lenders regarding the terms of these loans.  Likewise, the CFPB is seeking comment regarding whether students are adequately informed of their rights as borrowers on private education loans and it is interested in alternative repayment plans that have proven to be effective in preventing loan default.


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

 

Jan 13, 2012

CFPB releases mortgage origination examination procedures
 

The CFPB has announced the publication of the mortgage origination examination procedures.  These guidelines are a "field guide" for examiners reviewing mortgage originators in both the bank and nonbank industries. 

These examination guidelines will apply to both lenders and brokers and nonbank entities such as payday lenders. In sum, the supervision activities will include document gathering, data analysis, onsite examination and ongoing monitoring.


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

 

Jan 12, 2012

Federal regulators to examine nonbank mortgage companies
 

Within the next few weeks, regulators from the new Consumer Financial Protection Bureau will begin examining the books and records of nonbank firms in the first ever "in-depth federal-government review" of these U.S. mortgage lenders and brokers, according to an article in The Wall Street Journal. Whereas many nonbank mortgage lenders were originally regulated only at the state level, they now join banks, which must comply with federal regulations, the article said. This comes as a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which created the federal consumer bureau and gave it power over many nonbank financial firms, the article said.  CFPB officials have opined that some of the practices of these lenders are thought to have contributed to the housing bubble and its associated financial crisis in 2008. For more read the full story here.
 
Posted by A. Sharett in  Consumer Financial Protection Bureau  Dodd-Frank   |   Permalink

 

Jan 08, 2012

CFPB nonbank examination will include various approaches
 

After Director Cordray’s appointment, the CFPB reminded the public what its approach will be for nonbank examination.  For certain nonbanks including mortgage companies, payday lenders, and private education lenders, CFPB supervision is effective immediately. 

The CFPB is careful to note that its goal is to “prevent harm to consumers and promote the development of markets for consumer financial products and services that are fair, transparent, and competitive.”

To accomplish these goals, the CFPB will employ a combination of any of the following tools as outlined in the recent CFPB Blog post: requiring nonbanks to file certain reports, reviewing the documents that nonbanks utilize to offer products and services to customers, reviewing nonbank compliance systems and policies, and reviewing the correspondence between nonbanks and customers. 

The CFPB explained that “in general,” it will notify a nonbank in advance of an examination.  Thus, that leaves the door open to “surprise” CFPB examinations.  That should sufficiently concern nonbanks that will be examined by the CFPB.

Expect the CFPB to coordinate with the Ohio Department of Commerce for nonbank examinations. 


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

 

Jan 02, 2012

Recess appointment for Cordray?: Advocacy group waits
 

Before the second session of the 112th Congress begins on January 3, a progressive advocacy group is hoping for a last-minute gift — the recess appointment of former Ohio Attorney General Richard Cordray to the Consumer Financial Protection Bureau (CFPB).  According to an article in The Columbus Dispatch, People for the American Way Executive Vice President Marge Baker said the new CFPB will not be "able to do significant portions of its work" if President Barack Obama does not override the Senate Republicans' December 8 filibuster that blocked Cordray's nomination. 

Created to protect consumers from lending and mortgage practices related to the financial crisis, several of the monitoring duties and newly created powers established under Dodd-Frank Act cannot be enforced without a director, as reported in our Dec 9 post. 

Read the full article


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

 

Dec 18, 2011

One-day course on CFPB and Dodd-Frank offered in New York
 

ALI-ABA is offering an a comprehensive one-day course on the Consumer Financial Protection Bureau (CFPB) and Dodd-Frank titled "The Consumer Financial Protection Bureau: A New Regulatory Word for Banks, Thrifts, Mortgage Lenders, Credit Card Companies, and Consumer Financial Service Companies."  The course will be offered in New York City on January 20, 2012 and will examine the regulatory powers of the CFPB, review the structuring of the bureau's operating divisions, and discuss CFPB interaction with other federal and state agencies charged with regulating the consumer financial marketplace. Representatives of the CFPB, other government agencies and private practitioners will be panelists and presenters. Click here for the online brochure


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

 

 

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