CFPB Reports on Consumer Complaint Trends
The CFPB recently released its Consumer Response Annual Report. The report discusses complaints handled in 2014 by type, including debt collection, mortgage, credit reporting, banking, credit card, consumer loan, student loan, payday loan, money transfer, prepaid card, and other financial services. The report also discusses how companies have handled complaints.
Overall, complaint volume rose 53% from 2013 to 214, with the greatest increase being in debt collection complaints, which more than doubled in 2014.
To read the report, visit: http://files. consumerfinance.gov/f/201503_cfpb_consumerresponse-annual-report-2014.pdf
Agencies Release FAQs on Basel III
The FDIC, OCC, and Federal Reserve Board recently released frequently-asked-questions regarding Basel III 2013 regulatory capital rule. These FAQs are in response to industry confusion regarding the rule. Covered topics include Definition of Capital, High Volatility Commercial Real Estate (HVCRE) Exposures, Other Real Estate and Off-Balance Sheet Exposures, Separate Account and Equity Exposures to Investment Funds, Qualifying Central Counterparty (QCCP), and Credit Valuation Adjustment (CVA).
To read the FAQs, visit: https://www.fdic.gov/ regulations/capital/capital/faq.html
OCC Revises Guidance on Subordinated Debt
The OCC recently issued revised guidance for subordinated debt issued by federal savings associations and national banks. The agency also revised its “Sample Subordinated Note,” replacing it with a tier 2 sample note and a nontier 2 sample note.
To read the guidelines and new sample notes, visit: http://occ.gov/news-issuances/ bulletins/2015/bulletin-2015-22.html
CFPB Releases TILA-RESPA Integrated Disclosure Rule Exam Procedures
The CFPB recently released examination procedures addressing the TILA/RESPA integrated disclosure rule. This rule, scheduled to take effect on August 1, 2015, will require lenders to provide a single, integrated disclosure to replace the two disclosure forms currently required under Regulation Z.
To read the procedures, visit: http://files. consumerfinance.gov/f/201503_cfpb_truth-inlending-act.pdf
CFPB Issues Customer Toolkit Regarding TILA-RESPA Integrated Disclosure Rule
The CFPB recently released a document entitled “Your Home Loan Toolkit” designed to inform consumers about the new disclosure forms lenders must provide beginning in August. Beginning in August 2015, creditors will be required to provide the toolkit to mortgage applicants.
The toolkit includes step-by-step guides for selecting your mortgage provider, closing your loan, and protecting your investment. According to CFPB Director Richard Cordray, “This toolkit is a great resource for consumers navigating the home-buying process, and will help consumers make well-informed decisions about the biggest financial transaction of their life.”
To read the toolkit, visit: http://files. consumerfinance.gov/f/201503_cfpb_your-homeloan-toolkit-web.pdf
CFPB Proposes Payday Lending Regulations
On March 26, 2015, the CFPB announced that it is considering proposing rules applicable to the payday loan industry. According to the CFPB, these rules will address practices that lead consumers into “debt traps.” The rules may address topics such as ability-to-repay, cooling-off period between loans and rollover caps.
The rules would cover payday loans, deposit advance products, vehicle title loans, high-cost installment loans, and open-ended lines of credit.
To learn more, visit: http://files. consumerfinance.gov/f/201503_cfpb-proposalunder-consideration.pdf
CFPB To Hold Academic Research Council’s Annual Meeting
The CFPB will hold this year’s Academic Research Council annual meeting on May 7, 2015 from 9 a.m. to 12 p.m. at the United States Bureau of Engraving and Printing. The meeting will address consumer financial protection trends in other countries, as well as trends in consumer finance research.
RSVP by May 4, 2015 if you wish to attend.
CFPB Announces it Will Publicize Narratives of Consumer Complaints
The CFPB recently announced its plan to include consumer narratives in its publicly available consumer complaint database. Narratives would be published on an opt-in basis, with personallyidentifiable information hidden. In contrast to the free-form narrative option provided to consumers, companies responding to complaints would be limited to selecting one of nine structured responses.
ABA President Frank Keating warns that the CFPB’s proposal “risks turning the CFPB database into a questionable -- even misleading -- resource and risks tarnishing the reputation of individual companies and the banking industry as a whole without substantiation.”
CFPB Requests Comment on Credit Card Market
The CFPB has recently requested public comment on the consumer credit card market. Specifically, the agency has requested comment on the terms of credit card agreements, the practices of credit card issuers, the effectiveness of disclosures regarding credit card fees and features, and the adequacy of consumer protections against deceptive and unfair credit card practices.
To learn more, visit: http://files. consumerfinance.gov/f/201503_cfpb_card-actreport-rfi.pdf
CFPB Releases Supervisory Report
On March 11, 2015, the CFPB released a report regarding legal violations its examiners have discovered. Problem areas identified by CFPB examiners included, among other things, student loan collection practices, mortgage origination, overdraft practices, and mishandling of credit reporting disputes.
CFPB Director Richard Cordray stated that “The CFPB will continue to monitor both bank and nonbank markets to ensure deception is rooted out, deficiencies are corrected, remediation is given to consumers, and violations are stopped in their tracks.”
CFPB Releases Arbitration Study
The CFPB recently released a study on predispute arbitration agreements, pursuant to Section 1028(a) of the Dodd-Frank Act, which instructs the agency to study the use of such provisions in connection with consumer financial products. The study discusses the prevalence of pre-dispute arbitration clauses, consumer awareness and understanding of such clauses, and statistics regarding arbitration outcomes.
According to the study, consumers are generally unaware of whether their contracts contain predispute arbitration clauses. Therefore, such clauses do not play a big role in a consumer’s decision between financial products.
To read the report, visit: http://www. consumerfinance.gov/reports/arbitration-studyreport-to-congress-2015/
Federal Reserve Determines Large Banks Are Sufficiently Capitalized
According to the results of the Federal Reserve’s stress tests, the largest U.S. banks can collectively withstand a severe economic downturn.
To read more about the results of these stress tests, visit: http://www.federalreserve.gov/ newsevents/press/bcreg/20150305a.htm
CFPB Releases Credit Card Account Management Exam Procedures
The CFPB recently released its Credit Card Account Management Examination Procedures, to be used by the agency in examining credit card lending activities. The procedures consist of six modules, covering topics such as marketing, origination, servicing, payment processing, periodic statements, dispute resolution, and addon products.
To read the exam procedures, visit: http://files. consumerfinance.gov/f/201502_cfpb_credit_card_ account_management_examination_guide.pdf
FDIC Releases Video on Mortgage Servicing Rules
The FDIC recently released a video addressing the Mortgage Servicing Rules. This video is the third in a series of videos the agency created in an effort to help bank employees comply with regulations. The previous videos addressed Ability to Pay, Qualified Mortgage, and Loan Officer Compensation Rules.
OCC Releases Updated Handbook on Personal Fiduciary Activities
The OCC recently released an updated version of its handbook entitled “Personal Fiduciary Duties,” which is to be used by the agency in examining personal fiduciary activities of banks. Generally, these are activities in which a bank is retained to provide services for an individual’s or family’s assets, such as trustee or management services.
The handbook discusses the risks associated with personal fiduciary activities, how those risks may be managed, and optional examination procedures to be used by the agency in examining such activities.
To read the handbook, visit: http://www.occ.gov/ publications/publications-by-type/comptrollershandbook/am-pfa.pdf
CFPB Releases Report on Reverse Mortgage Complaints
The CFPB’s Office for Older Americans recently released a report on consumer complaints regarding reverse mortgages. Since the CFPB began accepting complaints about reverse mortgages in December 2011, 42% of the approximately 1,200 complaints received by the CFPB were submitted by persons age 62 and older. According to the CFPB, the most common complaints by consumers regarding reverse mortgages are frustrations with servicing and inability to refinance or obtain a loan modification.