CFPB Enforcement

  • Mortgages: On June 17th, the CFPB, together with the Department of Justice, the Department of Housing and Urban Development, and Attorneys General in 49 states and the District of Columbia, filed a proposed federal court order requiring SunTrust Mortgage, Inc. to pay $540 million to consumers and another $418 million in civil penalties for allegedly failing to accurately and promptly apply payments as well as for allegedly charging unauthorized fees for default-related services. The regulators also alleged that SunTrust deceived homeowners about foreclosure alternatives, improperly denied loan modifications, and otherwise engaged in illegal foreclosure practices. CFPB Director Richard Cordray stated, “[D]eceptive and illegal mortgage servicing practices have pushed families into foreclosure and devastated communities across the nation. Today’s action will help homeowners and consumers harmed by SunTrust’s unlawful foreclosure practices. The [CFPB] will continue to investigate mortgage servicers that mistreat consumers, and we will not hesitate to take action against any company that violates our new servicing rules.” 

CFPB & Congress

  • Semi-annual report: On June 18th, Director Cordray testified before the House Financial Services Committee, marking the CFPB’s 50th appearance before Congress since its inception in 2011, regarding the CFPB’s May 28th semi-annual report. Committee Chairman Jeb Hensarling (R-TX) focused his opening statement on allegations of burdensome regulation, collection of consumer personally identifiable information, and a discriminatory work culture. Hensarling spent much of his question-and-answer time on the cost of the CFPB’s headquarters renovation. Ranking Member Maxine Waters (D-CA) stated that the semi-annual report, “shows a continuation of [the CFPB’s] unprecedented record of success protecting consumers and servicemembers.” Cordray responded to Rep. Shelley Moore Capito’s (R-WV) concern about the CFPB’s collection of PII by stating that the CFPB will purchase information “off the shelf” and contract with a consumer reporting agency to de-identify such data before any CFPB employee may access it. In response to similar questions from Rep. Spencer Bachus (R-AL), Cordray stated that he would investigate why the CFPB requested in its Privacy Act Systems of Records Notice to access such consumer information if the CFPB will not ever receive it. Cordray also responded to Capito’s concerns about the National Mortgage Database’s use of information by stating that the database is for research and, “will not be used for enforcement or supervision purposes.” Cordray also told the Committee that the CFPB is preparing a white paper on the “proxy methodology” for determining disparate impact in auto financing.
  • Employee conduct: On June 18th, following the House Financial Services Committee’s hearing with Director Cordray, the Committee’s Subcommittee on Oversight and Investigations held its third hearing on allegations of discrimination and retaliation at the CFPB. The Subcommittee heard testimony from Ali Naraghi, an Examiner in the CFPB’s Division of Supervision, Enforcement, and Fair Lending, as well as Kevin Williams, a former Quality Monitor in the CFPB’s Office of Consumer Response, each of whom the Subcommittee compelled to testify by subpoena (previously reported). Naraghi testified that he was, “subjected to disparate treatment,” and sought to, “protect my fellow colleagues who, in their sincere attempts to support the mission of [the] CFPB, are paralyzed from asserting their rights, and even their opinions.” Williams characterized his experience at the CFPB as, “reminiscent of past eras of injustice, cronyism, discrimination, and retaliation,” which developed because the Office’s, “unproven management team was not properly prepared for the big job they faced.”
  • Appropriations: On June 17th, the House Appropriations Committee reported out its FY2015 Financial Services and General Government Appropriations bill, which would subject the CFPB to the Congressional appropriations process beginning in FY2016. The bill would also require what the Committee characterized as, “extensive reporting on CFPB activities.” 

CFPB Operations

  • Consumer Advisory Board: On June 18th, the CFPB held a public meeting of its Consumer Advisory Board in Reno (NV) to, “discuss trends and themes and the consumer experience in the mortgage market.” Deputy Director Steven Antonakes delivered prepared remarks describing the CFPB’s approach to regulating the mortgage market. Antonakes stated, “Our goal…is not some one-sided aim to maximize consumer protection or industry deterrence at all costs. There is such a thing as doing too little, and there is such a thing as doing too much. We are seeking an appropriate balance where incentives for homeowners, creditors, and servicers are aligned.”
  • Seniors: On June 19th, the CFPB published a guide entitled, “Protecting Residents from Financial Exploitation: A Manual for Assisted Living and Nursing Facilities.” The guide is intended to assist staff at such facilities in helping seniors detect and prevent financial exploitation by becoming familiar with common warning signs, keeping appropriate records, and reporting improper behavior to law enforcement. 

CFPB Rulemaking

  • Cease-and-desist orders: On June 18th, the CFPB published a final rule (79 FR 34622) establishing procedures for issuing a temporary cease-and-desist order (TCDO) under the Dodd-Frank Act. The final rule, unchanged from the rule as proposed in September 2013, clarifies:
    • The basis for issuing a TCDO;
    • The content, scope, and form of a TCDO;
    • The procedures governing the issuance of a TCDO, and the remedies available to the CFPB in issuing one; and
    • The rights of persons subject to a TCDO. 

CFPB Outreach

  • Financial literacy: On June 16th, Director Cordray delivered prepared remarks at the Marian J. Mohr Memorial Library (RI), at which he announced a financial literacy partnership with Rhode Island’s Office of Library and Information Services, “to make this state’s already trusted libraries into neighborhood centers of financial education.” Cordray stated, “we want libraries to feel comfortable pointing [patrons] in the right direction,” such as to various resources the CFPB offers that Cordray briefly identified in his remarks.