CFPB  Rulemaking

  • GLB privacy notices: On May 6th, the CFPB published a proposed rule to provide  additional flexibility to financial institutions regarding the distribution of Gramm-Leach- Bliley Act privacy notices in cases where the financial institution limits its information sharing. Specifically, a bank or nonbank under CFPB jurisdiction may post its annual privacy notices online if it satisfies certain conditions, such as not sharing consumer data in a manner that would trigger consumers’ opt-out rights. A qualifying institution would be required to utilize the model disclosure form that federal regulators issued in 2009. In a press release, the CFPB stated that the flexibility of the proposed rule provides an incentive to qualifying institutions to limit data sharing in order to avoid disqualification from online delivery; the CFPB added that online delivery provides consumers with constant access to the disclosures and provides the ability to comparison shop between the standardized model forms. The CFPB is accepting public comments for 30 days following the proposed rule’s publication in the Federal Register.

CFPB & Congress

  • CFPB data collection: On May 7th, Rep. Lynn Westmoreland (R-GA) introduced H.R. 4604, the “CFPB Data Collection Security Act.”  The bill would require the CFPB to provide a consumer opt-out of personal data collection and require the CFPB to purge any information it collected after 60 days of completing its relevant investigation. Westmoreland stated in a press release that the bill would further require the CFPB to, “provide one free year of credit monitoring,” but did not provide any further details on that provision.  Finally, the bill would require Senate confirmation of the CFPB Director, and require a “confidential” security clearance for certain CFPB employees with access to certain consumer data.  “It is highly concerning,” Westmoreland stated, “that [the CFPB has] access to collecting your data without your permission and [has] no time limit on keeping your information in [its] system.”
  • CFPB research transparency: On May 1st, Rep. Michael Fitzpatrick (R-PA) introduced H.R.4539, the “[CFPB] Research Transparency Act.”  The bill would require that the CFPB provide, in publishing a research paper, “all studies, data, and other analyses on which the paper was based.”  The bill was referred to the House Committee on Financial Services.
  • House Financial Services Committee markup: On May 7th, the House Financial Services Committee held a markup of the following bills:
    • H.R. 2673, the “Portfolio Lending and Mortgage Access Act,” which would amend the definition of a “qualified mortgage” to include, “a residential mortgage loan made by a creditor so long as such loan appears on the balance sheet of such creditor”;
    • H.R. 3211, the “Mortgage Choice Act,” which would require the CFPB to clarify the Truth in Lending Act’s definitions of mortgage points and fees; and
    • H.R. 4466, the “Financial Regulatory Clarity Act,” which would require seven financial regulators, including the CFPB, to determine whether a new regulation or order that it issues is duplicative or inconsistent with existing federal regulations, as well as whether existing regulations are outdated (previously reported).  The bill does not expressly mention the authority of the Financial Stability Oversight Council in the CFPB rulemaking process, as do H.R. 3193 and S. 2212.

At the markup, the Committee agreed to H.R. 3211.  Recorded votes on H.R. 2673 and H.R. 4466 remain pending.

  • Rural designations: On May 6th, the House passed by voice vote H.R. 2672, the “CFPB Rural Designation Petition and Correction Act.”  The bill would require the CFPB to provide counties with an application process to be designated as a rural area for the purposes of federal consumer financial law, and require that the CFPB publish such applications in the Federal Register, allowing for a public comment period of at least 90 days (previously reported).

CFPB Operations

  • Older Americans: On May 7th, the CFPB published a “snapshot” report regarding older consumers and mortgage debt that provided information about delinquency and foreclosure rates among older homeowners between 2007 and 2011. In the report, the CFPB concludes that, “rising mortgage debt is threatening the retirement security of millions of older Americans,” and that, “compared to a decade ago, fewer older homeowners own their home outright.” Further, the CFPB reported that, in the period between July 2011 and December 2013, approximately one-third of complaints submitted by older Americans concerned mortgages, 14% concerned debt collection, and 8% concerned credit reporting.
  • Consumer literacy: On May 7th, the CFPB’s Assistant Director for the Office of Older Americans, Nora Dowd Eisenhower, published on the CFPB blog a consumer advisory recommending, “3 Things To Keep Your Retirement Plan on Track.”  Touching on the CFPB’s report published that day on older Americans and mortgage debt, Eisenhower recommended that homeowners, “plan for your mortgage pay-off date,” and, secondly, “be careful when getting a new mortgage, refinancing, or tapping into your home equity.” Finally, she recommended that future retirees, “estimate your retirement income and expenses.”
  • Financial controls: On May 2nd, the Government Accountability Office (GAO) published a report on the CFPB’s FY2012 and FY2013 financial statements to further investigate “two significant deficiencies” in the CFPB’s internal financial controls that the GAO identified in its December 16, 2013, report.  Specifically, the GAO identified deficiencies regarding the CFPB’s year-end accrual process to accurately and completely record accounts payable, and regarding the CFPB’s recording of property and equipment transactions.  In the report, the GAO provided four recommendations to ensure that the CFPB complies with federal financial standards.  The CFPB has indicated that it accepted and is working to implement the recommendations.