CFPB  Enforcement

  • Checking accounts: On October 9th, the CFPB announced that it entered into a Consent Order with M&T Bank to compel $2.9 million in refunds to approximately 59,000 affected consumers and $200,000 in the form of a civil monetary penalty.  The CFPB alleged that M&T Bank violated the Consumer Financial Protection Act and the Truth in Savings Act by charging customers fees in connection with checking accounts that the bank had advertised as free or no cost. The CFPB stated, “If an account is described as free or no cost, it cannot, for example, have any maintenance or activity fees, or any fees to deposit, withdraw, or transfer money.”  In addition to the aforementioned payments, the Consent Order requires M&T Bank to provide updated information to credit reporting agencies for consumers whose accounts it had closed due to a negative balance.

CFPB Operations

  • Checking accounts: On October 8th, the CFPB held a forum on access to checking accounts.  The forum explored the role of credit reporting agencies in consumers’ application for a checking account as well as data used in a decision to open an account. The CFPB displayed a particular interest in, among other things, increasing the accuracy of data furnished to and reported by consumer reporting agencies, including “specialty consumer reporting agencies,” as well as improving institutions’ ability to inform consumers of their right to know their account histories and correct any inaccuracies. CFPB Director Richard Cordray stated at the event, “In their screening for risk, banks and credit unions often rely on reports from…specialty consumer reporting agencies that also operate nationwide” and that, “primarily collect and provide specific types of information on a consumer’s history, such as medical payments, tenancy, employment, or insurance claims.” Cordray stated an interest in three areas:
    • The accuracy of such reports;
    • Consumers’ ability to access such reports and to dispute any incorrect information; and
    • The use of such reports.
  • Consumer savings: On October 2nd, the CFPB announced a research pilot under its Project Catalyst initiative to, “explore ways to encourage more saving among consumers at tax time.”  Cordray stated, “Tax time is an opportunity for many consumers to build savings that can help them meet their financial goals.  Saving a portion of tax refunds can enable consumers on a path to economic stability.”  The CFPB will partner with H&R Block, Inc., over three “tax seasons” to test the effectiveness of certain savings strategies and the effectiveness of certain informational materials. The CFPB stated in a press release that “the information shared by H&R Block will be de-identified, and appropriate precautions will be taken to ensure that individual consumers cannot be identified through the data.” In a post on its blog, the CFPB added, “We’ll update you on our progress before we proceed with the second year of the study.”

CFPB  Rulemaking

  • Auto finance: On October 8th, the CFPB published in the Federal Register (79 FR 60762) a proposed rule that would subject to the CFPB’s oversight those nonbank auto finance companies that make, acquire, or refinance 10,000 or more loans or leases in a year, covering approximately 38 auto finance companies that account for approximately 90% of nonbank auto loans and leases.  The CFPB had originally posted the text of the proposed rule to its website on September 17th (previously reported).  Cordray stated in a press release, “Nonbank auto finance companies extend hundreds of billions of dollars in credit to American consumers, yet they have never been supervised at the federal level.”  Cordray added, “Today’s proposal would extend our oversight, allowing us to root out  discrimination and ensure consumers are being treated fairly across this market.”  The CFPB will accept public comments on the proposed rule through December 8th.
  • OIG evaluation: On September 29th, the Office of the Inspector General (OIG) for the CFPB and the Federal Reserve published an evaluation report entitled, “The CFPB Complies with Section 1100G of the Dodd-Frank Act, but Opportunities Exist for the CFPB to Enhance Its Process.”  Section 1100G amended the Regulatory Flexibility Act to require that the CFPB both assess the impact of a proposed rule on the cost of credit for small business entities and also convene panels to seek direct input from such entities prior to issuing certain  rules.  The OIG concluded that the CFPB’s rulemaking process complied with Section 1100G in the six proposed and final rules that the OIG reviewed.  However, the OIG also found that the CFPB’s policies, “have been in use for approximately two years without being updated or finalized,” and that these interim policies and procedures, “afforded teams significant discretion in their 1100G rulemaking approach to regulatory analysis, which contributed to a variance in documentation and inconsistent knowledge transfer practices.”  The OIG recommended that the CFPB finalize its interim policies and procedures, and noted that the CFPB concurred with those recommendations in response to the OIG’s draft report.

CFPB Outreach

  • Foreign languages: On October 8th, the CFPB published a notice in the Federal Register (79 FR 60840) of its proposed Language Access Plan to help expand accessibility of the CFPB’s programs and services for persons with limited English proficiency.  Specifically, the CFPB stated that it will provide such individuals with translated consumer-facing documents and accept consumer complaints in “over 180 languages,” with an option to receive written communications in Spanish.  The CFPB stated that providing information and services to persons with limited English proficiency is consistent with Executive Order 13166.
  • Foreign languages: On October 7th, Nora Dowd Eisenhower, Assistant Director for the CFPB’s Office for Older Americans, published a post on the CFPB’s blog to highlight the CFPB’s, “resources in Spanish that could help thousands of older Hispanics spot financial exploitation and scams.”  Eisenhower noted that a reported 17% of Hispanic seniors are victims of financial exploitation, and nearly 40% of older Hispanics have limited English proficiency.  Eisenhower posted links to the CFPB’s educational materials on preventing financial exploitation and materials on informing financial caregivers about obligations and fraud prevention.