- FDCPA: On March 20th, the CFPB published its annual report on the Fair Debt Collection Practices Act. The report stated that the CFPB has so far handled approximately 30,300 debt collection complaints since it began accepting such complaints in July 2013. A plurality (34%) of complaints concerned continued attempts to collect debt that a consumer claims that they did not owe. The CFPB reported that it forwarded 11,000 debt collection complaints to companies, which reported as ‘closed with explanation’ 59% of all complaints that the companies received. The report also details the number, categories, and handling of debt collection complaints submitted to the FTC. Further, the CFPB stated that it received more than 20,000 responses to its Advance Notice of Proposed Rulemaking on debt collection, not including a report submitted by Cornell Law School based on 1,000 responses Cornell received through RegulationRoom.org. In an introduction, CFPB Director Richard Cordray stated that the CFPB continues to collaborate with the FTC in enforcement work on debt collection, including jointly filing amicus briefs.
- Disclosures: On March 18th, the CFPB published a blog post entitled, “Prepaid Cards: Help Design a New Disclosure,” which described the CFPB’s efforts to model standardized prepaid card disclosures. The CFPB stated, “We expect to propose a rule on this topic later this spring.” The post explained that, currently, today’s disclosures are printed in different styles and formats, which are difficult to compare side-by-side. The CFPB is developing a model form to, “clearly present a prepaid card’s most important fees so you can easily identify the best prepaid card for your needs.” In the post, the CFPB included test models and added that it will both conduct interview testing with consumers and consider public feedback.
CFPB and Congress
- Rural Designation: On March 14th, the House Financial Services Committee reported out (55-1) H.R. 2672, the “CFPB Rural Designation Petition and Correction Act,” which would provide for an application process for interested parties in a particular state to ask that a county in that state be designed by the CFPB as a rural area.
- Transparency: On March 17th, Rep. Jeb Hensarling (R-TX), Chairman of the House Financial Services Committee, called on the CFPB to end its closed-door meeting policy for its four advisory groups: the Community Bank Advisory Council, the Credit Union Advisory Council, the Academic Research Council, and the Consumer Advisory Board. In a press release on behalf of the Committee, Hensarling stated that the groups, “conduct virtually all of their business behind closed doors – refusing requests by members of the public and even a member of Congress to attend them.” Hensarling also criticized the CFPB for advising its employees to include only minimal details about agency events on their work calendars.
- FOIA: On March 18th, Judicial Watch filed a Freedom of Information Act (FOIA) lawsuit on behalf of the Washington Examiner against the CFPB for allegedly withholding public records regarding CFPB expenses incurred in remodeling its Washington headquarters. In July 2013, a Washington Examiner Senior Investigative Reporter filed a FOIA request with the CFPB to obtain access to records concerning the headquarters’ renovation. In response to the request, the CFPB handed over 15 pages, withholding 235 of the 250 total pages. The Executive Director of the Washington Examiner stated that the CFPB has exceeded planned spending by $90 million and asserted, “Documents to explain why a government bureau is spending so lavishly on renovations to its headquarters are exactly the kind of information the FOIA is meant to make available to taxpayers.”
- Funding: On March 12th, the Federal Reserve published its audited financial statements for calendar years 2012 and 2013, which reflected that the Federal Reserve transferred $523.2 million to the CFPB in 2013, which represents a 46% increase over the $385.2 million that the Federal Reserve transferred to the CFPB in 2012. Beginning in 2014, the CFPB’s funding share of Office of Inspector General (OIG) operations will be adjusted based on OIG expenses and work allocation from the previous year.
- FOIA Reports: On March 12th, the CFPB issued its annual Freedom of Information Act (FOIA) Report, along with the report of its Chief FOIA Officer. The FOIA Report contains tallies of FOIA requests received by the CFPB organized by:
- The number of FOIA requests received;
- The initial disposition of requests;
- The number of appeals;
- The disposition of appeals;
- Response times for requests and appeals;
- The number of backlogged requests or administrative appeals that are pending; and
- FOIA Employee numbers and associated costs and fees.
The report of the Chief FOIA Officer contains answers to a series of questions regarding the CFPB’s transparency, response to FOIA requests, and overall efficiency. In a preface to the report, CFPB Chief Operating Officer Sartaj Alag listed a number of internal initiatives to improve its FOIA operations and stated, “I take pride in emphasizing our quick response time to requests and exemplifying our commitment to educating all of our employees on the components of the FOIA.”
- Consumer Finance: On March 18th, Director Cordray delivered prepared remarks to the National Association of State Treasurers. Cordray described lessons learned from his experience as a treasurer in state and local Ohio government, and spoke, as in previous speeches, about the CFPB’s consumer complaint system, its financial literacy education initiatives, and its recently implemented mortgage rules. He reminded state treasurers that, “federal law requires employees to have a choice of how to receive their wages.” Finally,Cordray advised that prepaid card holders should be empowered to access their account balances for free. He added, “[w]hen considering how to design a prepaid card program,… consumers [should] have the option of direct deposit into a bank account and, if they do choose a prepaid card, it should include the option to easily switch to direct deposit at any time.”
- Consumer Financial Markets: On March 19th, CFPB Deputy Director Steven Antonakes delivered prepared remarks to the U.S. Chamber of Commerce to, “shed light on how we intend to regulate consumer financial markets.” Antonakes identified five CFPB “tools” that, “create a balanced approach that not only protects consumers, but fosters an environment which allows for responsible companies to innovate and compete in the marketplace so consumers can have access to responsible credit.” Specifically, Antonakes discussed:
- Rulemaking that is “constructive” and “evidence-based”;
- CFPB response to, so far, over 300,000 total submitted complaints with debt collection as the largest source of the complaints;
- Supervision through examinations that are, “intended to be rigorous and heavy on data analysis, with the important goal of also being fair and reasonable”;
- Enforcement through, “working with our examination teams, and listening to and analyzing consumer complaints, industry whistleblower tips, and information from government agencies, industry, and consumer groups”; and
- Consumer education that empowers consumers, “to make the best decisions for themselves and their families.”
- Disparate Impact: On March 19th, Automotive News reported that the CFPB had not responded by the March 13th deadline to a March 7th House Financial Services Committee letter requesting details about determinations of disparate impact in auto lending. The letter, submitted by Chairman Hensarling, accused the CFPB of a “pattern of obfuscation,” in which the CFPB has allegedly ignored or provided incomplete answers to questions from Congress about the CFPB’s methods for determining disparate impact.