CFPB Rulemaking

  • Remittances: On August 8th, the CFPB published an updated small business guide to help companies comply with the requirements of the CFPB’s remittance transfer rule, which goes into effect on October 28, 2013.  The updated guide reflects amendments made to the rule since the guide was originally released in September 2012.  Some of the changes discussed in the guide include revised disclosure requirements for institutional fees and foreign taxes applicable to errors that result when consumers provide inaccurate account information.  
  • High-Risk Mortgages: On August 8th, the CFPB published a proposed rule in the Federal Register (78 FR 48548) together with the Treasury Department and the Federal Reserve to amend Regulation Z, which implements the Truth in Lending Act.  The proposed amendments provide exemptions from a CFPB final rule requiring appraisals for “high-risk mortgages” for: (1) transactions secured by existing manufactured homes and not land, (2) certain “streamlined re-financings, and (3) transactions of $25,000 or less.  Public comments are being accepted through September 9, 2013, except that public comments may be submitted through on the mandatory information collection by creditors to evaluate real estate collateral securing high-priced mortgage loans.
  • CFPB Liability: On August 5th, the CFPB published a final rule in the Federal Register (78 FR 47153) defining the procedures for filing, processing, and paying awards arising from claims against a CFPB employee based on negligence, wrongful act, or omission.  Claimants may submit claim forms and appropriate supporting evidence to the CFPB’s General Counsel.  The rule went into immediate effect on August 5, 2013.

CFPB Supervision

  • Payday Lenders: On August 8th, the CFPB reportedly joined at least five other federal agencies and several state attorneys general in filing civil subpoenas against a number of online payday lenders, as well as the banks and payment processors through which the payday lenders operate.  The Financial Fraud Enforcement Task Force is reportedly coordinating the investigation.  Task Force Executive Director Michael Bresnick stated that, “If we can stop the scammers from accessing consumers’ bank accounts then we can protect the consumers and starve the scammers.” 
  • Mortgage Loans: On August 8th, PNC Financial Services included in a regulatory filing information about a CFPB and Department of Justice investigation concerning PNC’s mortgage-related practices, including the disparate impact of mortgage loan pricing for people of certain income levels or ethnicities.

CFPB Operations

  • Financial Literacy: On August 8th, the CFPB published a notice in the Federal Register (78 FR 48422) proposing a new information collection entitled, “Development of Metrics to Measure Financial Well-being of Working-age and Older American Consumers.”  The data collection’s core objective is to test, refine, and produce valid and reliable measures of consumer financial wellbeing to assist the CFPB develop and implement a strategy to improve consumers’ financial literacy.
  • FOIA: On August 5th, the CFPB published a notice in the Federal Register (78 FR 47306) revising the CFPB Freedom of Information Act / Privacy Act System.  The CFPB modifies the notification procedures for individuals seeking access to records maintained in this system; modifies the system location, system manager(s), and address; consolidates two routine uses that include the disclosure of personally identifiable information (PII) from the system to the U.S. Department of Justice for providing legal advice to the CFPB or in representing the CPFB in a legal proceeding; and adds a new routine use for the disclosure of PII to law enforcement agencies as appropriate.  Public comments are being accepted through September 4, 2013.
  • Student Loans: On August 5th, CFPB Student Loan Ombudsman Rohit Chopra published a blog post, entitled, “A Closer Look at the Trillion,” on the CFPB website examining the estimated $1.2 trillion market on student loans.  Chopra stated that approximately 7 million borrowers are in default on a federal or private student loan and that approximately one-third of Federal Direct Loan Program borrowers have chosen alternative repayment plans to lower their payments.
  • Cordray commentary: On August 4th, a series of news stories were published based on an interview with CFPB Director Richard Cordray.
    • Cordray stated that the CFPB’s growing database of financial services complaints is insufficient to fully inform consumers when making choices about finance and banking companies.  Cordray noted that such decisions should be made by consumers taking into account reputation as well as product and service prices.
    • Cordray also characterized the complaint databases as “one of the most exciting things we’ve done” because companies know that it is “backed by potential supervision and enforcement authority” and therefore companies respond to complaints quickly.  Borrowers “come by the thousands” to submit complaints.
    • Cordray also identified student loan debt as “a big priority for us.”
  • Complaints: On June 18th, the CFPB published a document entitled, “Company Portal Response Guidance.” The document supplements the Company Portal Manual.  The guidance provides recommendations to companies when documenting and responding to consumers’ complaints based on the CFPB’s best practice observations.  The guidance addresses four of the specific consumer financial product categories being collected through the CFPB’s Consumer Response System: credit cards, bank accounts and services, consumer loans and mortgages.

CFPB & Congress

  • Consumer Financial Data: On August 7th, Senate Banking Committee Ranking Member Mike Crapo (R-ID) announced that members of a consumer protection panel will participate in a news conference on August 12, 2013, at the Idaho Statehouse regarding the CFPB’s collection of bulk consumer financial data.  Crapo will head the panel, which will also include Idaho Attorney General Lawrence Wasden, Judicial Watch President Tom Fitton, and Idaho attorney John Zarian.

CFPB & Regulatory Compliance

  • Auto Lending: On August 6th, the CFPB, together with the Federal Reserve and the Department of Justice, held a webinar on fair lending considerations related to indirect auto lending programs.  CFPB Fair Lending Director Patrice Ficklin discussed the CFPB’s supervisory and enforcement authority as well as indirect auto finance.  Ficklin discussed steps that lenders can take to comply with the Equal Credit Opportunity Act and clarified that CFPB expects companies to be currently taking steps to comply with fair lending laws for compliance with auto far lending regulations.  She added that the CFPB will refer a matter of unexplained pricing disparities to enforcement if it has a minimum statistical certainty level of 95%, but would use a lower certainty level to address disparities through the supervisory process.
  • Regulatory Compliance: On June 24th, the Commercial Law League of America announced a Compliance Conference on August 23rd that will include CFPB Assistant Director for Legislative Affairs Catherine Galicia and a member of the CFPB Credit Union Advisory Council as well as Wells Fargo senior counsel and other leading compliance attorneys to discuss financial and consumer regulatory compliance.  Specific topics for discussion include ensuring vendor compliance, avoiding Telephone Consumer Protection Act violations, preparing for a potential CFPB review, and effective methods for maintaining regulatory compliance.