CFPB & Congress
- Semi-annual report: On June 10th, CFPB Director Richard Cordray testified before the Senate Banking, Housing, and Urban Affairs Committee at a hearing on the CFPB’s May 28th semi-annual report (previously reported). As during Cordray’s prior appearance, members questioned Cordray about, among other topics, the CFPB’s collection of consumer data, especially related to the National Mortgage Database. Cordray defended the utility of the data collected, and stated the Database will not contain personally identifiable information. Ranking Member Mike Crapo (R-ID) expressed concern that Operation Choke Point reflects regulators’ interest in ending businesses engaged in illegal practices, and Cordray responded by characterizing the CFPB’s focus as directed toward stopping illegal activities. Sen. Elizabeth Warren (D-MA) spoke against forced arbitration clauses, and Cordray responded that the CFPB will issue its final report on forced arbitration later this year. Cordray also stated that the CFPB intends to issue its proposed rule regarding prepaid cards by the end of the summer, and is continuing rulemaking work regarding payday loans.
- HFS chairman: On June 12th, following the June 10th electoral primary defeat of House Majority Leader Eric Cantor (R-VA), media reported that House Financial Services Committee Chairman Jeb Hensarling (R-TX) does not intend to seek Cantor’s position in House leadership elections scheduled for June 19th, and will continue serving as HFS Chairman.
- Human resources management: On June 12th, the House Financial Services Committee’s Subcommittee on Oversight and Investigations voted by voice vote to subpoena the appearance and testimony of one current and one former CFPB official regarding the Subcommittee’s ongoing investigation of allegations of employee discrimination and retaliation at the CFPB, as well as, “related matters, including the operations of the Office of Consumer Response and the Division of Supervision, Fair Lending, and Enforcement.” In a memorandum to Committee members, the Committee’s Majority Staff wrote that the two individuals requested that the Subcommittee subpoena testimony, “to protect their interests and/or to guard against retaliation by the CFPB.” Specifically, the two individuals are:
- Ali Naraghi, an examiner in the CFPB’s Division of Supervision, Fair Lending, and Enforcement; and
- Kevin Williams, former Quality Monitor in the CFPB’s Office of Consumer Response.
- CFPB reform: On June 10th and 11th, the House Financial Services Committee held a markup of, and passed, 12 pending bills, including the following five CFPB reform bills:
- H.R. 3389, the “CFPB Slush Fund Elimination Act of 2013”;
- H.R. 3770, the “CFPB-Inspector General Reform Act of 2013”;
- H.R. 4539, the “[CFPB] Research Transparency Act”;
- H.R. 4604, the “CFPB Data Collection Security Act”;
- H.R. 4662, the “[CFPB] Advisory Opinion Act”; and
- H.R. 4804, the “[CFPB] Examination Fairness Act.”
- Qualified Mortgages: On June 9th, the House passed by voice vote H.R. 3211, the “Mortgage Choice Act of 2013,” which would amend the Truth in Lending Act’s definition of “points and fees,” which in part affects whether a mortgage is a Qualified Mortgage. The bill would require the CFPB to issue final regulations implementing the Act within 90 days of enactment. A companion bill, S. 1577, is pending in the Senate Banking, Housing, and Urban Affairs Committee.
- Mobile financial services: On June 11th, the CFPB announced an inquiry into, “the opportunities and challenges associated with the use of mobile financial services [MFS].” In its announcement, the CFPB published a Request for Information (RFI) on MFS, which includes 35 questions across the following areas:
- What information MFS providers collect on users, how providers use that information, and what related disclosures the provider makes to users;
- Whether, how, and at what cost MFS provide access for the underserved;
- Whether and how real-time access to account information affects money management, including spending decisions; and
- What customer service or technical assistance MFS providers offer to users. The CFPB will accept public comments on its RFI (published June 12th in the Federal Register, 79 FR 33731) through September 10th.
Also on June 11th, the CFPB held a field hearing on MFS in New Orleans (LA), at which Director Cordray delivered prepared remarks overviewing the CFPB’s RFI. Addressing the CFPB’s privacy concerns, Cordray stated, “We are…seeking information about the kinds of information companies are collecting on consumers, whether that is being disclosed to consumers, and how the information is being used for low-income consumers in particular.”
- Regulatory compliance: On June 9th, CFPB Deputy Director Steven Antonakes delivered prepared remarks at the American Bankers Association Regulatory Compliance Conference. Antonakes stated that, “[w]e have no intention to impede or supplant the workings of the marketplace,” but asserted that, “sensible and evenhanded regulation and oversight is a positive foundation for functioning markets.” Antonakes spent much of his speech describing, “five of our primary tools—rulemaking, consumer complaint response, supervision, enforcement, and consumer education.” He also highlighted the CFPB’s eRegulations tool, which, “should…make life easier for you and your colleagues who are engaged in compliance work.”
- Consumer Advisory Board: On June 9th, the CFPB published a notice in the Federal Register (79 FR 32922) of its June 18th Consumer Advisory Board in Reno (NV) to, “discuss trends and themes and the consumer experience in the mortgage market.” This meeting will mark the first such public meeting of a CFPB Board or Council (previously reported). The CFPB will accept public comments related to the meeting through June 16th.