CFPB & Congress
- Revolving Door: On July 31st, House Oversight and Government Reform Committee Chair Darrell Issa (R-CA) and House Financial Services Committee Chair Jeb Hensarling (R-TX) sent a letter to CFPB Director Richard Cordray expressing concern about the propriety of former CFPB senior staff working in areas impacted by CFPB rules that those same staff members helped to develop during their time at the CFPB. The letter requests, “more information about the departure of these individuals from the CFPB and its continuing relationship with them.”
- Servicemembers: On July 31st, CFPB Assistant Director of the Office of Servicemember Affairs Holly Petraeus testified before a Senate Committee on Veterans’ Affairs hearing entitled, “Preserving the Rights of Servicemembers, Veterans, and their Families in the Financial Marketplace.” Petraeus testified about areas of concern that the CFPB has encountered among servicemembers and their families, including aggressive marketing by for-profit colleges, compliance with the Servicemembers Civil Relief Act, and pension advances. Petraeus noted that the CFPB began accepting credit reporting complaints in October 2012, but that credit reporting complaints are already the “fourth highest complaint category for veterans at 8% and is trending upward.”
- Inspector General: On July 25th, Sen. John Boozman (R-AR) introduced S.1366, which would amend the Inspectors General Act and empower the Inspector General of the Federal Reserve, who also oversees the CFPB, with the same authorities and responsibilities over the CFPB as if the CFPB were a part of the Federal Reserve. Currently, the CFPB has no independent Inspector General.
CFPB Consumer Complaints
Student Loans: On August 1st, the CFPB published a “Mid-year Snapshot of Private Student Loan Complaints” as an update to the CFPB’s October “Annual Report of the CFPB Student Loan Ombudsman.”
- The mid-year snapshot shows that between October 1, 2012, and March 31, 2013, consumers reported 2,002 complaints to the CFPB, approximately three-quarters of which were directed at just eight companies.
- The study found that 62% of consumer complaints concerned consumers’ inability to modify repayment terms, and that 34% percent concerned payment processing issues.
- The report also noted that borrowers and co-signors expressed concern about potentially adverse credit consequences as a result of lenders’ distribution of a debtors’ underpayment to multiple loans.
- Thin-File Consumers: On August 1st, the CFPB published a notice in the Federal Register (78 FR 46578) about a new information collection initiative entitled, “Evaluations of Financial Capability Programs for Economically-Vulnerable Consumers: Two Randomized Evaluations.” The study will examine the impact of bundled products and services on the financial decision-making of economically-vulnerable consumers. The target population for the study is low-income, underserved consumers who are considered unbanked or underbanked or have thin or no credit files. Public comments are being accepted through September 30, 2013.
- TISA: On July 31st, the CFPB published a notice in the Federal Register (78 FR 46325) to renew the CFPB’s collection of information under, “Truth in Savings (Regulation DD) 12 CFR 1030,” to be used by the CFPB in evaluating legal violations under the Truth in Savings Act (TISA). Public comments are being accepted through August 30, 2013.
ECOA Examination: On July 23rd, the CFPB published its Equal Credit Opportunity Act (ECOA) baseline review modules, which will supplement the CFPB’s examination procedures for supervised entities. The review modules state that they will be used, “by examiners during ECOA baseline reviews to identify and analyze risks of ECOA violations, to facilitate the identification of certain types of ECOA and Regulation B violations, and to inform fair lending prioritization decisions for future CFPB reviews.” The review procedures include:
- Fair Lending Supervisory History;
- Fair Lending Compliance Management System (CMS);
- Risks Related to Mortgage Lending Policies and Procedures;
- Risks Related to Mortgage Servicing;
- Risks Related to Auto Lending; and
- Risks Related to Other Products.
CFPB Case Law
- Legal Challenge: On August 1st, the U.S. District Court for the District of Columbia dismissed a lawsuit that challenged the validity of CFPB rulemaking activity under the leadership of CFPB Director Richard Cordray, who had been installed by President Obama using the presidential recess appointment authority. The court concluded that the plaintiffs lacked standing because they, “have not faced any adverse rulings nor has agency action been directed at them.” Cordray has subsequently been confirmed by the Senate as the CFPB Director.
State National Bank of Big Spring et al., v. Lew et al., D.D.C., Civil Action No. 12-1032 (ESH)