CFPB  Enforcement

  • Rulemaking: On February 12th, the U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness sent a letter to CFPB Director Richard Cordray, criticizing the CFPB’s approach of “regulation by enforcement settlement combined with issuance of brief guidance statements.” The letter discussed three areas in which the CFPB’s approach led  to “uncertainty and adverse consequences for both businesses and consumers”:
    • The test for disparate impact liability in the context of indirect auto lending;
    • The definition of “abusive” acts and practices; and
    • The standards for companies’ liability for the actions of service providers.

The Chamber said that instead of using consent orders as templates for compliance, the CFPB should follow a more formal rulemaking procedure which would produce “detailed, practical guidance that both protects consumers and gives regulated business the clear, understandable standards they need to ensure that they are complying with the law.”

CFPB Operations

  • Student Financial Products: On February 12th, the CFPB’s website published a blog post written by Rohit Chopra entitled, “What Sunshine for Student Financial Products Can Show Us.” The blog explained that a financial institution’s willingness to readily disclose arrangements with colleges and universities to market bank accounts, prepaid cards, debit cards, and other financial products to students would be a sign of the institution’s commitment to transparency. The blog listed a few examples of the different types of agreements that financial institutions have with colleges and universities:
    • Direct payments for using school logos;
    • Bonuses for recruiting students; and
    • Discounted prices in exchange for marketing access.
  • Mortgage Servicing Industry: On February 19th, CFPB Deputy Director Steven Antonakes spoke at a conference held by the Mortgage Bankers Association and expressed disappointment in the mortgage servicing industry’s lack of progress in complying with the mortgage servicing rules that went into effect on January 10th.  Antonakes defended the rule, saying that servicers have had months to bring themselves into compliance and that the CFPB has made changes in response to industry complaints. Antonakes also made it clear that CFPB officials are frustrated with the mortgage servicing industry’s lack of progress in “cleaning up its mistakes.”  He stated, “Despite advances, too many customers continue to receive erratic and unacceptable treatment.  This kind of continued sloppiness is difficult to comprehend and not acceptable.  It is time for the paper chase to end.”
  • Mortgage Servicing Industry: On February 19th, CFPB Deputy Director Steven Antonakes spoke at a conference held by the Mortgage Bankers Association and expressed disappointment in the mortgage servicing industry’s lack of progress in complying with the mortgage servicing rules that went into effect on January 10th.  Antonakes defended the rule, saying that servicers have had months to bring themselves into compliance and that the CFPB has made changes in response to industry complaints. Antonakes also made it clear that CFPB officials are frustrated with the mortgage servicing industry’s lack of progress in “cleaning up its mistakes.”  He stated, “Despite advances, too many customers continue to receive erratic and unacceptable treatment.  This kind of continued sloppiness is difficult to comprehend and not acceptable.  It is time for the paper chase to end.”

CFPB Rulemaking

  • Information Collection: On February 19th, the CFPB published a notice in the Federal Register, 79 FR 9459, proposing a new information collection program entitled, “Randomized Evaluation of the Credit Matters Loan at St. Louis Community Credit Union (SLCCU) and Credit Matters Counseling Offered by BALANCE Financial Fitness Program.” Through the data collection, the CFPB seeks to understand the impact of the Credit Matters Loan, a bundled credit-building loan product offered at SLCCU, and Credit Matters counseling, a telephone based credit counseling service offered by BALANCE Financial Fitness Program, a financial education and counseling service, on consumers. The information collected would be:
    • From economically vulnerable customers who consent to participate in the research study; and
    • Focused on the financial health of the consumers, as well as their financial capability.

CFPB Outreach

  • Credit Unions: On February 12th, Director Cordray spoke during a webinar hosted by the National Credit Union Administration (NCUA), during which he discussed with Chairman Debbie Matz that credit unions should be reassured that they would not be negatively affected by the CFPB’s new mortgage rules. Cordray stated that the CFPB provided exemptions from a substantial portion of the mortgage servicing rules for credit unions that service 5,000 or fewer loans originated or owned by the servicer itself or its affiliates.