CFPB  Enforcement

  • Add-on products: On September 25th, the CFPB and the Office of the Comptroller of the Currency (OCC) announced that they had entered into Consent Orders with U.S. Bank National Association (“U.S. Bank”) (OH).  The Orders require $47.9 million in consumer restitution for allegedly violating Section 5 of the Federal Trade Commission (FTC) Act by unfairly billing consumers for identity theft protection “add-on” products.  The CFPB imposed a $5 million civil monetary penalty and the OCC imposed a separate $4 million civil monetary penalty.  The regulators alleged that U.S. Bank marketed “add-on” products provided by a third party, Affinion Group.  U.S. Bank reportedly billed full fees to consumers, even though some customers did not receive all of the credit monitoring and/or credit report retrieval services.  The Orders require U.S. Bank to establish a Compliance Committee to develop a comprehensive action plan to oversee the bank’s compliance with the Orders, and to submit quarterly progress reports to the CFPB and to the OCC.

CFPB & Congress

  • Data security: On September 22nd, the Government Accountability Office (GAO) published a report on the CFPB entitled, “Some Privacy and Security Procedures for Data Collections Should Continue Being Enhanced.” GAO reported that the, “CFPB had implemented logical access controls for the information system that maintains the consumer financial data collections and was appropriately scanning for problems or vulnerabilities.”However, GAO also reported that, “additional efforts are needed in several areas to reduce the risk of improper collection, use, or release of consumer financial data.”  GAO proposed 11 recommendations, with which the CFPB stated its agreement, including recommendations to improve written procedures and comprehensive documentation, to improve employee training, and to improve communication with the Office of Management and Budget regarding approval for data collection and data sharing.

House Financial Services Committee Chairman Jeb Hensarling (R-TX) characterized the report as revealing, “troubling deficiencies in the CFPB’s data security procedures and privacy controls, as well as an apparent effort by the CFPB to skirt the consumer privacy protections required by Congress.”  Hensarling added, “It seems the CFPB is trying to out- NSA the NSA when it comes to accumulating information on Americans.”  Rep. Carolyn Maloney (D-NY) interpreted the report differently, saying, “The report puts to rest the idea that CFPB has been improperly using consumers’ personal financial data.”

CFPB  Rulemaking

  • Consumer complaint narratives: On September 22nd, the extended comment period closed for the CFPB’s notice of proposed policy statement and request for public comment (79 FR 42765), originally published on July 23rd (previously reported).  The CFPB received 115 comments, according to Regulations.gov, from organizations including Wells Fargo & Co., Equifax, TransUnion, the Consumer Data Industry Association, ACA International, the Consumer Federation of America, the Consumer Mortgage Coalition, the Reporters Committee for the Freedom of the Press, and the AARP.  Certain industry groups cautioned the CFPB that publishing consumer complaint narrative data on its consumer complaint database would create a forum for anecdotal accusations to which companies would assume a significantly increased burden in responding.  Industry members also argued that the CFPB would have to redact so much factual information from company responses for consumer privacy concerns that database users would not gain much meaningful understanding of a company’s response.  Consumer advocacy groups generally supported the CFPB’s proposal to provide more insight into companies’ consumer relations and to strengthen consumers’ voice.

CFPB Outreach

  • Student debt: On September 23rd, the CFPB, the Department of Education, and the Peace Corps held an event in Washington, D.C., to announce a partnership in a public education campaign regarding student debt and public service.  In prepared remarks, CFPB Director Richard Cordray stated, “I am happy to report that AmeriCorps and the Peace Corps…are both signing our pledge to help their people tackle their student debt,” including by educating employees about student loan forgiveness options. CFPB Student Loan Ombudsman Rohit Chopra contemporaneously published a blog post on the CFPB’s website to highlight student debt management options, and materials that the CFPB has developed, for military members, Peace Corps Volunteers, and others.
  • Reverse mortgages: On September 24th, Nora Dowd Eisenhower, the CFPB’s Assistant Director for the Office of Older Americans, published a blog post on “two things you should know” from the CFPB’s update of its reverse mortgage guide. “One of these changes,” Eisenhower wrote, “limits the amount of money you can draw from your loan in the first year,” adding, “Borrowers often get into trouble by taking a lump-sum payment early on.” She also noted that, “in the past, couples who took out a reverse mortgage loan in the name of only one spouse ran into trouble when the borrowing spouse passed away,” and added, “With recent changes, a non-borrowing spouse may be able [to] continue to live in the home under certain conditions, even after the spouse who signed the loan  passes away.”

CFPB Operations

  • Debt collection: On September 23rd, the CFPB and the FTC announced the agenda for their October 23rd  roundtable in Long Beach (CA) entitled, “Debt Collection & the Latino Community.”  The event is scheduled to include the following sessions:
    • Panel 1: Pre-Litigation Debt Collection from Latino Consumers;
    • Panel 2: The Experience of LEP Latinos in Debt Collection Litigation;
    • Panel 3: Credit Reporting Issues Among LEP Latinos;
    • Panel 4: Developing Improved Strategies for Educating and Engaging LEP Latinos About Their Debt Collection Rights; and
    • Lessons Learned and Next Steps.
  • Mortgages: On September 22nd, the CFPB and the Federal Financial Institutions Examination Council updated its Home Mortgage Disclosure Act (HMDA) web-based database of mortgage data collected from 7,190 HMDA-covered financial institutions to reflect 2013 lending data.  The data includes information on applications, originations, purchases and sales of loans, denials, HOEPA status, and whether and how a loan is secured. In a press release, the CFPB provided broad interpretations of the 2013 data, including that reliance on government-backed mortgages, “has declined somewhat in recent years.”  The CFPB’s tool allows users to “explore the data and do your own analyses” by creating custom filters, charts, and tables.
  • Credit Union Advisory Council: On September 19th, the CFPB announced that its Credit Union Advisory Council will meet with Director Cordray on October 1st  to discuss overdrafts and consumer complaints.  The event is open to the public by RSVP.