CFPB & Congress

  • Dodd-Frank Act: On September 9th, CFPB Director Richard Cordray testified before the Senate Banking, Housing, and Urban Affairs Committee at a hearing entitled, “Wall Street Reform: Assessing and Enhancing the Financial Regulatory System.” The other financial regulators testifying on the panel with Cordray were:
    • Daniel Tarullo, Governor of the Federal Reserve;
    • Martin Gruenberg, Chairman of the Federal Deposit Insurance Corporation;
    • Thomas Curry, Comptroller of the Currency;
    • Mary Jo White, Chair of the Securities and Exchange Commission; and
    • Timothy Massad, Chairman of the Commodities Futures Trading Commission

In his remarks, Cordray reviewed the CFPB’s recent efforts to address perceived challenges related to international money transfers, and to refine a “risk-based” supervision program that “help[s] to drive a cultural change within financial institutions that places more emphasis on compliance with the law and treating customers fairly.”  He also reviewed CFPB enforcement actions, including partnerships with other federal regulatory agencies and with state Attorneys General.  Finally, recalling the CFPB’s original focus on the mortgage market, Cordray reviewed the CFPB’s “Know Before you Owe” mortgage disclosure initiative and efforts to improve the quality of data collected pursuant to the Home Mortgage Disclosure Act.

  • Indirect auto lending: On September 8th, Rep. Marlin Stutzman (R-IN) introduced H.R. 5403, the “Reforming CFPB Indirect Auto Financing Guidance Act.”  The bill would explicitly nullify the CFPB’s bulletin issued March 21, 2013, entitled, “Indirect Auto Lending and Compliance with the Equal Credit Opportunity Act,” and require, instead, that the CFPB provide a public notice and comment period before issuing the bulletin in final form.  The bill would also require the CFPB to:
    • Make public all studies, data, methodologies, analyses, and other information used to prepare the guidance;
    • Consult with the Federal Reserve, the Federal Trade Commission, and the Department of Justice; and
    • Conduct a study on the costs and impacts of such guidance to consumers and to women-owned, minority-owned, and small businesses.

The bill, which so far has 23 Republican and 16 Democratic cosponsors, is pending in the House Financial Services Committee.

CFPB Outreach

  • Consumer technology: On September 11th, Cordray delivered prepared remarks at the CFPB’s Consumer Advisory Board meeting in Washington, D.C.  Cordray discussed how a system of financial regulation can appropriately “keep up” with technological developments, such as the expanding relationship consumers have with their mobile devices. Cordray referenced the CFPB’s recent Request for Information (previously reported) that sought input on, as Cordray stated, “a wide array of issues related to mobile banking and financial management services.”  The comment period for the Request for Information closed the day prior to the meeting.  Cordray stated that, “we look forward to digesting all the public input along with the feedback we get from CAB members today. And, of course, as new developments occur, we may decide to seek further input from the public on these issues over time.”  At the meeting, the CFPB also welcomed seven new Board members, as well as a new chair and vice chair.
  • Credit unions: On September 10th, Cordray delivered prepared remarks at the National Association of Federal Credit Unions.  Cordray discussed several means of cooperation between the CFPB and credit unions, most prominently through the CFPB’s Credit Union Advisory Council, which, “provide[s] information and analysis that better informs our policy decisions and improves our rulemaking process.”  Cordray also discussed considerations—such as exemptions for portfolio loans that exceed the 43% debt to income ratio, and the definition of a “rural” designation—relevant to credit unions in the CFPB’s implementation of its new mortgage rules.  Cordray also outlined the CFPB’s approach to, “our next big mortgage project, which has to do with the new mortgage disclosure forms that will take effect in August 2015.”  Finally, Cordray discussed the “eClosing” three-month pilot project, through which the CFPB is, “making a commitment to work with industry to improve the mortgage closing experience for consumers through technology.”
  • Debt collection: On September 9th, the CFPB published a blog post entitled, “Disputing Debt You Never Owed: William’s Story.”  According to the CFPB, the consumer unsuccessfully attempted for four years to resolve a $8,500 debt that he did not owe. “Because William submitted a complaint [to the CFPB],” the blog post states, “he was able to end a four year long credit dispute in one week.”  The CFPB added, “We want to make sure that you know that we’re here for you too.”
  • Mortgages: On September 8th, CFPB Deputy Director Steve Antonakes delivered prepared remarks at the American Mortgage Conference.  Antonakes spoke about, “drafting rules to restore confidence and common sense to our mortgage market,” and provided an overview of the CFPB’s efforts to help improve covered entities’ compliance.  He referenced a recent Compliance Bulletin and Policy Guidance that addresses frequently asked questions regarding servicing, especially regarding servicing transfers, and also referenced outreach efforts to provide streamlined interpretive guidance through webinars on the TILA-RESPA rule.  He also stated that the CFPB’s “next big mortgage project” will culminate in its   “Know Before You Owe” mortgage disclosure forms that will take effect in August 2015. “Mortgage lenders,” Antonakes stated, “should already be working on the new rule and getting ready now.”

CFPB Operations

  • Data breach: On September 9th, the CFPB published a blog post outlining remedial actions for individuals possibly affected by a payment card breach. Following Home Depot’s announcement confirming a data breach of its payment card systems (previously reported), the CFPB recommended that consumers:
    • Monitor accounts for unauthorized charges or debits;
    • Report suspicious charges or debits immediately;
    • Submit a complaint to the CFPB; and
    • Ignore phishing scams that steal information by pretending to verify such information.
  • Consumer credit: On September 9th, the CFPB published in the Federal Register (79 FR 53422) a notice of a proposed information collection to study consumer credit and  financial decision-making.  In the notice, the CFPB stated only that it requests “approval for a generic information collection plan to collect data from purposive samples through controlled trials in field and economic laboratory settings,” and that it intends to use the collected information “for development and informative purposes in order to increase the [CFPB’s] understanding of consumer credit markets and household financial decision- making.”  The CFPB is accepting public comments through October 9, 2014.
  • TILA / Consumer leasing: On September 9th, the CFPB and the Federal Reserve jointly announced increases required by the Dodd-Frank Act to the dollar thresholds for Regulations Z (Truth in Lending) and M (Consumer Leasing) for exempt consumer credit and lease transactions. The annual increases adjust the thresholds by the annual percentage increase in inflation.  Accordingly, the protections of the Truth in Lending Act and the Consumer Leasing Act will, according to the CFPB, “generally apply to consumer credit transactions and consumer leases of $54,000 or less in 2015—an increase of $1,100 from  2014.”