CFPB Operations

  • Debt Collection: On March 5th, the FTC published its annual summary of debt collection activities in the form of a letter written to CFPB Director Richard Cordray.  The letter describes the FTC’s efforts to implement the Fair Debt Collection Practices Act (FDCPA).  In the letter, the FTC explains its three-pronged debt collection program:
    • Vigorous Law Enforcement: Efforts including legal action to protect consumers from unfair, deceptive, and abusive debt collection practices and from phantom debt collection practices.
    • Education and Public Outreach: The FTC staff works with an informal network of about 10,000 community-based organizations and other interest groups that order FTC materials and distribute FTC information to their members, clients, and constituents.
    • Research and Policy Initiatives: In one of its prominent examples, in June 2013 the FTC and the CFPB assembled a group of consumer advocates, credit issuers, collection industry members, and state and federal regulators, to discuss the movement of consumer data throughout the debt collection process at a joint event entitled, “Life of a Debt: Data Integrity in Debt Collection.”
  • Credit Reporting: On February 27th, the CFPB published a blog post entitled Now You Have Better Options to Dispute a Credit Report Error,” which announced that the three major credit reporting bureaus, Equifax, Experian, and TransUnion, added a function to their respective websites allowing consumers to upload documents as part of a credit report dispute.  Consumers can provide supporting documents such as a paid bill, a letter explaining the issue, a police report, or proof of identity.

CFPB Budget

  • FY2015: On March 4th, the White House released a statement announcing the FY2015 budget, which proposes to increase the transfer cap from the Federal Reserve to the CFPB from $608 million to $619 million.  The CFPB, however, has indicated that it does not expect to withdraw the amount the White House’s budget proposal would appropriate.
  • Building Renovation: On March 3rd, the Office of Inspector General (OIG) of the Federal Reserve and the CFPB updated its Work Plan to include an evaluation of the CFPB’s headquarters renovation budget.  In January 2014, Cordray indicated in testimony before the House Financial Services Committee that, although previously estimated to be $95 million, the cost of the renovation had reached $145 million.  The Work Plan also stated that the OIG’s audit of the CFPB’s civil penalty fund was completed.  The OIG recommended that the CFPB consolidate fund information on its website and specify in its fund administration procedures that the fund administrator must collect in writing any case- related data from the CFPB’s Office of Enforcement.

CFPB  Complaints

  • Consumer Complaints: This week, media reported that the CFPB mailed “stuffers” to consumers along with IRS refund checks in order to solicit consumer complaints.  The stuffer invites consumers to visit the CFPB’s “Ask CFPB” feature as well as to “file a free complaint” on the CFPB website.
  • Servicemembers: On March 6th, the CFPB released a report, covering more than 14,000 complaints from servicemembers, veterans, and their families, announcing that those who submitted a complaint to the CFPB about financial products or services have recovered more than $1 million.  The servicemembers, veterans, and their family members who submitted complaints and did not receive money either:
    • Received non-monetary relief, such as correcting errors on their credit report, stopping harassment from debt collectors, and correcting account information; or
    • Had their complaints closed without relief.

According to the report, the top three complaints by these individuals are mortgages, debtcollection, and credit cards.

CFPB Outreach

  • Consumer Advisory Board: On February 27th, the CFPB held a Consumer Advisory Board meeting focusing on consumer reporting. Cordray stated that the CFPB has a “critical responsibility” to make sure that credit report information is timely and accurate. Cordray also mentioned that he has called upon several large credit card issuers to make credit scores available for free to their consumer customers. According to Cordray, providing free credit scores can, “yield positive returns that outweigh the limited effort involved,” because an educated consumer is less likely to default and more likely to participate in the national credit economy.
  • Mortgages: On March 3rd, CFPB Deputy Director Steven Antonakes delivered prepared remarks at a Common Ground Conference event co-hosted by the Federal Trade Commission entitled, “Protecting Nevada’s Consumers.”  Antonakes spoke about the CFPB’s effort to, “restore confidence and common sense to our mortgage market.” Antonakes also discussed student loans and mortgage servicing.

CFPB Commentary

  • Small Banks: On March 5th, researchers at George Mason University’s Mercatus Center published a working paper entitled, “How Are Small Banks Faring Under Dodd-Frank?” The paper examined, in part, small banks’ efforts toward CFPB compliance and concluded that small banks have responded to the increased regulatory burdens by shrinking the products and services they offer.  The study sought to analyze the impact of increased regulations on different areas of a small bank’s operations, including products and services offered. More than 80% of respondents indicated that their compliance costs had increased by more than 5% since the passage of the Dodd-Frank Act.  As a result, 94% of  respondents indicated that they would not be adding new products or services.
  • Personnel: On March 6th, the American Banker published confidential CFPB data, revealing racial differences in staff performance ratings. Specifically, the American Banker suggests that CFPB managers show a pattern of ranking white employees higher than minorities in performance reviews used to grant raises and issue bonuses.  Overall, whites were twice as likely in 2013 to receive the agency’s top grade than were African-American or Hispanic employees.  The American Banker claims that the statistics themselves do not prove that CFPB managers are intentionally discriminating against minority employees, but they do show that “racial disparities can be just as easily identified within the CFPB’s ranks as among the lenders the [CFPB] regulates.”