CFPB Guidance

  • Gramm-Leach-Bliley Act: On September 24th , the CFPB, in conjunction with six other federal regulators, issued guidance clarifying how companies should comply with the Gramm-Leach-Bliley Act (GLBA) privacy requirements.
    • Pursuant to the GLBA, financial institutions must provide consumers with the opportunity to opt-out of the companies’ disclosures to third parties of the consumers’ nonpublic personal information. The guidance clarifies that financial institutions are permitted to report suspected elder financial abuse to appropriate authorities without violating GLBA.
    • CFPB Director Richard Cordray stated that the guidance addresses concerns among financial institutions that, “in many circumstances they may not disclose such information unless they have informed the consumer and provided an opportunity to opt out.”
    • Nora Dowd Eisenhower, CFPB Assistant Director for the Office for Older Americans, stated that the guidance allows financial institutions, “to protect their older consumers when they spot a threat to their economic security,” while also complying with important privacy protections.
  • Small Creditors: The CFPB has posted on its website a quick reference guide for financial institutions to assist in the determination of whether a company qualifies as a small creditor pursuant to the CFPB’s qualified mortgage standards.  Factors to be considered in making such a determination that are included in the chart are: institution size and product offerings, loan features, balloon payment features, underwriting procedures, points and fees, portfolio position, and type of compliance presumption for higher-priced loans.

CFPB Enforcement

  • Auto Dealers: On September 20th , national media reported that the regulatory filings of two companies—Toyota Motor Credit Corp. and American Honda Finance Corp.— show that the CFPB and the Department of Justice (DOJ) are investigating the companies for possible racial discrimination in the companies’ lending practices, specifically with regard to “dealer markup” or “dealer-assisted finance.”  Up to five other auto lenders have reportedly received similar requests for information from the CFPB and DOJ. 
  • Investigation: On September 26th , Cordray issued a Decision and Order to three Native American online lending companies in response to a joint petition to set aside CFPB civil investigative demands (CIDs), which the CFPB sent to the companies in June 2013 seeking information about the advertising, marketing, providing, or collecting of small-dollar loan products, known as payday loans.
    • The petition challenged the CFPB’s authority over businesses affiliated with Indian tribes. 
    • Cordray declined to set aside the CIDs asserting that the CFPB has broad authority to issue CIDs to lenders, there is no tribal sovereign immunity, and the CIDs request relevant information and comply with legal requirements.
    • Cordray has ordered the companies to comply with the CIDS within twenty-one (21) calendar days.
  •   Cease-and-Desist Orders: On September 26th , the CFPB published an interim final rule (78 FR 59163) that establishes procedures governing the issuance of CFPB cease-and-desist orders during adjudication proceedings.  Under the rule, the CFPB may issue a temporary cease-and-desist order if the Director determines that one or more of the alleged violations specified in a notice of charges, or the continuation thereof, is likely to cause the respondent to be insolvent or otherwise prejudice the interests of consumer before the completion of the adjudication proceeding. 

CFPB & Congress

  • CFPB Reform: On September 26th , Rep. Sean Duffy (R-WI) introduced a number of CFPB reform bills.
    • H.R. 3192 would bring the CFPB under the congressional appropriations process. 
    • H.R. 3193 would strengthen the review authority of the Financial Stability Oversight Council over CFPB regulations.
    • H.R. 3194 would eliminate any special deference provided by courts to CFPB interpretations of federal consumer financial laws.
  • Consumer Accounts: On September 19th , Rep. Jan Schakowsky (D-IL) introduced H.R. 3137 that would create, “a framework establishing the rights, liabilities, and responsibilities of participants in closing procedures for certain types of consumer deposit accounts and to protect individual consumer rights.”  The bill would require the CFPB to issue regulations that would control how depository institutions should handle the closure of consumer accounts, including how to report such accounts to consumer reporting agencies under the Fair Credit Reporting Act. 
  • Consumers’ Personal Information: On September 25th , Rep. Lynn Westmoreland (R-GA) introduced H.R. 3183, which would amend the Dodd-Frank Act to provide individual consumers with a free, annual disclosure of the information that the CFPB maintains about the consumer.
  • Tax Liens: On September 20th , twelve Democratic Senators sent a letter to Cordray and Department of Justice (DOJ) Assistant Attorney General for the Civil Division Stuart Delery to ask the CFPB to look into tax lien programs, which may be pressuring vulnerable homeowners into foreclosure.  The letter specifically requests the CFPB and DOJ to:
    • Examine states’ and municipalities’ tax lien programs and offer best practice recommendations on how to structure such programs to ensure strong consumer protections; and
    • Examine oversight of third-party vendors hired by mortgage holders or servicers during the foreclosure process.

CFPB Outreach

  • Consumer Complaints: On September 20th , the CFPB announced a partnership with the City of Jackson, MS.  Jackson consumers may call the city’s non-emergency hotline, 311, to reach the CFPB and ask questions or file complaints.  Cordray stated that, “We are always looking for new ways to connect with consumers.” 
  • Financial Literacy: On September 25th , Cordray spoke at a field hearing of the Financial Literacy and Education Commission (FLEC), which is chaired by Treasury Secretary and comprised of the leaders of eighteen (18) other federal agencies.
    • Cordray stated that “Financial education should be as fundamental as the education we are all required to receive in U.S. history and government.
    • Cordray called for incorporating financial literacy into the curricula across class subjects, both in classroom lessons and in standardized tests. 
  • Servicemember Affairs: On September 23rd , CFPB Assistant Director for Servicemember Affairs Holly Petraeus joined Sen. Elizabeth Warren (D-MA) and Rep. Niki Tsongas (D-MA) at a series of roundtable discussions at Bunker Hill Community College (SC) with servicemembers, veterans, and their families.  Issues facing military families, such as financial scams and the availability of financial resources, were the focus of the discussions.
  • Student Loans: On September 23rd , CFPB Student Loan Ombudsman Rohit Chopra posted on the CFPB website an item entitled, “Explainer: Scoring Student Loan Servicers,” which analyzes the performance of the four largest servicers of student loans.  Chopra indicated that students are seldom able to make decisions about which specific servicer will be selected by the original lender, but students should consider their repayment options before graduation.  
  • Supervision and Enforcement: On September 24 th , Cordray spoke at the American Banker Regulatory Symposium.
    • During his remarks, Cordray discussed the CFPB’s focus on the “4 Ds”: deception, debt traps, dead ends, and discrimination. 
    • Cordray further commented that, “Our supervision and enforcement work is driving cultural change that places more emphasis on compliance and treating customers fairly.” 
    • Cordray also observed that, “Institutions also know that our supervision and enforcement teams are keeping a watchful eye on the consumer complaints we receive and that the patterns reflected in those complaints can prompt investigations or be the basis for risk scoping that leads to prioritizing supervisory attention.” 

CFPB Commentary

  • Compliance: The International Automotive Remarketers Alliance (IARA) Standards Committee has developed a draft template that would assist financial institutions to comply with consumer financial protection legal requirements and CFPB regulations that may impact automobile remarketing.  The proposal addresses issues such as data security, hiring and background checks, and vendor compliance.  The IARA’s Standards Committee hopes that the full IARA and the National Auto Auction Association will endorse the template.
  • CFPB Analysis: On September 24th , the Bipartisan Policy Center published a report entitled, “The Consumer Financial Protection Bureau: Measuring the Progress of a New Agency,” based on interviews with banks, nonbanks, consumer advocates, and CFPB officials.  The report identifies several overarching trends or patterns that emerged when examining successful and problematic CFPB actions.  The report also includes over thirty (30) recommendations on how to improve CFPB operations.
  • CFPB Consumer Advisory Board: A Mississippi consumer has expressed criticism of the CFPB’s refusal to permit the public to attend portions of the CFPB’s Consumer Advisory Board (CAB) meeting that was held in Jackson, MS.   The consumer has threatened a lawsuit against the CFPB for violating the Federal Advisory Committee Act (FACA), which requires that federal advisory committee meetings be open to the public. 
  • Consumer Complaints: On September 17th , U.S. PIRG published a report entitled, “Big Banks, Big Complaints: CFPB’s Consumer Complaint Database Gets Real Results for Consumers,” which is identical to the report published by PennPIRG on September 18 th (previously reported).  The report provides an analysis of the 19,000 complaints that the CFPB has received in the past 18 months and offers recommendations on how to make the public database more useful to consumers.