CFPB Supervision

  • Supervisory Interests: On March 12th, CFPB Deputy Director Steven Antonakes delivered prepared remarks at the National Community Reinvestment Coalition’s (NCRC) Annual Conference, during which Antonakes thanked the NCRC for their, “strong working relationship.”  Antonakes spoke primarily about the CFPB’s new mortgage rules that went into effect in January.  He also spoke about the CFPB’s interest in the servicing of both mortgages and student loans, including payment applications, servicing transfers, and accuracy of information.  Finally, he identified debt collection and consumer reporting as “additional areas of concern and focus,” concluding, “[o]ur enforcement oversight extends to all debt collectors and consumer reporting agencies.”

CFPB Litigation

  • Debt Collection: On March 5th, the CFPB and the Federal Trade Commission (FTC) filed a joint amicus brief in a Fair Debt Collection Practices Act (FDCPA) case before the Sixth Circuit (Buchanan v. Northland Group Inc.).  The CFPB and FTC argue that a debt collector unlawfully attempted to collect time-barred debt by implying the prospect of future litigation.  The agencies argued, “actual or threatened litigation is not a necessary predicate for an FDCPA violation in the context of time-barred debt [emphasis original].  Rather, a debt collector violates the statute whenever its communications tend to deceive or mislead ‘the least sophisticated consumer,’ whom the FDCPA was enacted to protect. … [A] settlement offer can erroneously lead unsophisticated consumers to believe a debt is enforceable in court even if the offer is unaccompanied by any clearly implied threat of litigation.”  More generally, the CFPB and FTC addressed the collector’s omission from communications with the consumer that the debt in question had exceeded the statute of limitations.  The agencies asserted, “A debt collector’s communication need not contain overtly false statements to be misleading or deceptive; omissions may also deceive.”

CFPB Personnel

  • Performance Evaluations: On March 12th, the American Banker reported that the CFPB “is planning to eliminate” its current employee performance evaluation system.  Following an American Banker story on March 6th  highlighting that confidential CFPB data reflect racial disparities in staff performance ratings, CFPB Director Richard Cordray reportedly sent an internal memo indicating that he would evaluate the current system.  In his memo, Cordray stated, “[W]e take these issues seriously, and if there are problems we want and intend to have them fixed.  Depending on what the ongoing review finds, we will take appropriate corrective actions and communicate them to you.  In the meantime, we have begun taking steps to strengthen our performance management system and to improve managers’ skills.”
  • New Hires: On March 12th, the CFPB announced three additions to senior management:
    • Christopher Carroll, Assistant Director of and Chief Economist for the Office of Research, who is also a professor of economics on leave from the Johns Hopkins University and member of the Board of Directors of the National Bureau of Economic  Research;
    • Daniel Dodd-Ramirez, Assistant Director of Financial Empowerment, who was previously the Executive Director of Step Up Savannah Inc., a community development organization; and
    • Jeffrey Langer, Assistant Director of Installment and Liquidity Lending Markets, who was previously Senior Counsel at Macy’s, Inc. and Chair of the Consumer Financial Services Committee of the ABA’s Business Law Section.

CFPB Operations

  • Consumer Advisory Board: On March 7th, the CFPB published a notice in the Federal Register (79 FR 13044) extending the deadline for applications to its Consumer Advisory Board, Community Bank Advisory Council, and Credit Union Advisory Council from February 28, 2014, to March 14, 2014.
  • Debt Collection Survey: On March 7th, the CFPB published a notice in the Federal Register (79 FR 13043) proposing a new information collection program entitled, “Debt Collection Survey from the Consumer Credit Panel.”  The CFPB states that it, “plans to conduct a mail survey of consumers to learn about their experiences interacting with the debt collection industry.”  The CFPB will ask consumers about:
    • Preferences for being contacted by debt collectors;
    • Opinions about potential regulatory interventions in debt collection markets; and
    • Knowledge of legal rights regarding debt collection.

Public comments are being accepted through May 6, 2014.

  • Payday Loans: On March 13th, the CFPB announced a March 25th field hearing in Nashville (TN) regarding payday loans.  The CFPB will hear comments from representatives of consumer groups and industry, as well as from members of the public.  Director Cordray is scheduled to deliver prepared remarks, and the CFPB’s website is expected to provide a  live webcast on its website.
  • Youth Financial Capability: On March 10th, Director Cordray spoke at the first public meeting of the President’s Advisory Council on Financial Capability for Young Americans. Other speakers included Treasury Secretary Jacob Lew and Education Secretary Arne Duncan.  Cordray stated, “We need to begin by recognizing just how rarely families actually engage in [money] discussions,” and recommended:
    •  Providing financial education in every school;
    • Advancing student financial education through experiential learning;
    • Engaging and supporting financial educators;
    • Integrating financial education concepts into standardized tests; and
    • Extending financial education to home life.

Miscellaneous

  • Mortgages: On March 11th, Senate Banking Committee Chairman Tim Johnson (D-SD) and Ranking Member Mike Crapo (R-ID) announced an agreement on a housing finance reform proposal that, according to a press release, will “wind down and eliminate Fannie Mae and Freddie Mac.”  The Obama Administration and a bipartisan group of at least 10 senators on the Committee have expressed support for the proposal. The proposal uses S. 1217, Sen. Bob Corker’s (R-TN) “Housing Finance Reform and Taxpayer Protection Act of 2013,” as the “base text,” although a new text is still forthcoming.  Among the agreed upon details is the establishment of the Federal Mortgage Insurance Corporation, which will be “modeled in part after the [Federal Deposit Insurance Corporation],” and which would guarantee certain mortgage-backed securities. The proposal also establishes a 10% capital requirement for private trading of such securities.