On February 16, 2012, the Consumer Financial Protection Bureau (“CFPB”) proposed a new regulation, pursuant to Section 1024 of the Consumer Financial Protection Act of 2010 (Title X of the Dodd-Frank Act) (the “Act”), intended to establish “the scope of coverage of the Bureau’s supervision authority for nonbank covered persons,” in particular as pertains to credit reporting and debt collection organizations.Continue reading this entry
Category Archives: Consumer Financial Protection Bureau
Defying Senate, President Obama purportedly makes recess appointment of Cordray to lead CFPB
Posted in Consumer Financial Protection BureauFor nearly six months, President Obama’s nomination of Richard Cordray to be the first Director of the Bureau of Consumer Financial Protection (CFPB) has been blocked by Senate Republicans. Today, the President is attempting to call the Senate’s bluff by making a legally questionable recess appointment of Cordray.
Under Article II, Section 2, Clause 3 of the federal Constitution, the President is empowered to make appointments to fill vacancies while the Senate is in recess. These so-called “recess appointments” have a limited duration, expiring when the next session of Congress ends, so Cordray’s appointment would not be effective for the full five-year term contemplated by the Dodd-Frank Act unless he were renominated by the President and confirmed by the Senate.
CFPB Republishes Certain Existing FTC Rules
Posted in Consumer Financial Protection BureauThe Consumer Financial Protection Bureau (CFPB) issued three interim final rules, each effective December 30, 2011, which republish and make minor, nonsubstantive changes to certain existing regulations of the Federal Trade Commission (FTC). The Dodd-Frank Act transferred rulemaking authority for those existing regulations to the CFPB effective July 21, 2011.
CFPB Regulation F (12 CFR Part 1006) republishes the FTC’s regulation (16 CFR Part 901) on procedures for states to apply for exemptions from certain provisions of the Fair Debt Collection Practices Act where the states’ laws are at least as protective of consumers as the federal law. CFPB Regulation I (12 CFR Part 1009) republishes the FTC’s regulation (16 CFR Part 320) on disclosure requirements for depository institutions which do not maintain federal deposit insurance. CFPB Regulation N (12 CFR Part 1014) republishes the FTC’s Mortgage Acts and Practices–Advertising Rule (16 CFR Part 321). CFPB Regulation O (12 CFR Part 1015) republishes the FTC’s Mortgage Assistance Relief Services Rule (16 CFR Part 322).
The CFPB has apparently elected to designate its regulations by letter, which had been the convention used by the Federal Reserve Board. The new CFPB Regulations F, I, N and O should not be confused with existing Federal Reserve Board Regulations F, I, N and O, which address topics such as correspondent banking, issuance and cancelation of Federal Reserve Bank capital stock, relations with foreign banks and bankers, and loans to bank insiders.
CFPB Report on Credit Card Complaints Proposes Publicly Accessible Database of Complaint Data
Posted in Consumer Financial Protection BureauThe website of the Bureau of Consumer Financial Protection (CFPB) has been soliciting consumer complaints since the CFPB opened for business on July 21, 2011. The CFPB has issued an interim report, detailing the 5,074 complaints the CFPB has received from consumers through November 15, 2011, and now proposes a publicly accessible database of consumer credit card complaints.
Of the complaints received by the CFPB through November 15, 2011, card issuers reported full or partial resolution of the complaints in 3,151 cases (74%), no relief granted in 845 cases (19.8%), and continuing issuer review of the complaints in 258 cases (6.1%). Of the reported resolutions, consumers confirmed that the complaints were satisfactorily resolved in 2,238 cases (71%) and disputed in 400 cases (12.7%), with the 513 cases (16.3%) pending the consumer’s review of the issuer’s reported resolution.
Who’s Your Regulator? Federal Regulatory Agencies Jointly Clarify CFPB Jurisdiction
Posted in Consumer Financial Protection Act; Consumer Financial Protection BureauA new Supervisory Statement clarifies when insured depository institutions and insured credit unions will be subject to supervision and enforcement by the Bureau of Consumer Financial Protection (CFPB). The CFPB issued the Supervisory Statement jointly with the federal prudential regulators–the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board (FRB), the Office of the Comptroller of the Currency (OCC), and the National Credit Union Administration (NCUA).
Section 1025 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) gives the CFPB exclusive supervisory authority and primary enforcement authority with respect to federal consumer financial laws over any insured bank, thrift or credit union and its affiliates, but only if its total assets exceed $10 billion (Large Institutions). For other institutions and their affiliates, the federal prudential regulators retain supervisory and enforcement authority with respect to federal consumer financial laws.
CFPB Releases Supervision and Examination Manual
Posted in Consumer Financial Protection BureauToday the Bureau of Consumer Financial Protection issued its initial Supervision and Examination Manual. The Bureau states that the manual “is a guide to how the CFPB will supervise and examine consumer financial service providers under its jurisdiction for compliance with Federal consumer financial law.”
Much of the manual will be familiar to both examiners and supervised institutions. The manual incorporates examination procedures developed under the auspices of the Federal Financial Institutions Examination Council (FFIEC) for many of the laws in the Bureau’s supervisory jurisdiction. The Bureau will also use FFIEC’s Uniform Consumer Compliance Rating System.
Martin J. Bishop To Speak At CRA & Fair Lending Colloquium
Posted in Consumer Financial Protection BureauMartin J. Bishop will be speaking on the impact of Dodd-Frank on Compliance professionals at the “CRA & Fair Lending Colloquium” November 6 – 9 in Baltimore. Senior executives at financial services organizations will discuss their compliance and risk management concerns with top regulators and other industry leaders. Other confirmed speakers include Thomas E. Perez, assistant attorney general for DOJ’s Civil Rights Division, and Sandra Braunstein, director of the Federal Reserve Board’s Consumer and Community Affairs Division.
Online registration is available at http://www.cracolloquium.com.
Bureau Issues Social Media Notice
Posted in Consumer Financial Protection BureauThe Consumer Financial Protection Bureau published in the Federal Register its Notice of Proposed Privacy Act System of Records. Comments are due no later than August 31, 2011 and it is expected that the new system will be effective September 12, 2011.
The Bureau has been blazing new trails in its use of social media. The new regulator routinely blogs and tweets. It uses Facebook and will accept consumer complaints via YouTube. According to the just-published notice, the Bureau expects its constituency (i.e., consumers) to use popular social media outlets to interact with it.
According to the Bureau:
The use of social media will enable the [Bureau] to interact with the public in effective and meaningful ways, encourage the wide sharing of consumer financial information and the strengthening of an online community of consumers, and ensure that critical information about the agency and key consumer finance issues is distributed.
Bureau Issues Report on Remittance Transfers, Makes Recommendations
Posted in Consumer Financial Protection Act; Consumer Financial Protection Bureau; Electronic Funds Transfer ActThe Consumer Financial Protection Bureau issued a report to the President and congressional committees regarding remittance transfers and remittance exchange rates. The report covers transparency and disclosure to consumers of exchange rates used in remittance standards, and examines the potential for using remittance histories to enhance consumers’ credit scores. The report was required by Section 1073(e) of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Remittance transfers are electronic funds transfers from senders in the United States to recipients in foreign countries. Each year, U.S. consumers send billions of dollars to family members and others through remittance transfers.
Bureau Reports to Congress on Differences Between Creditor-Purchased and Consumer-Purchased Credit Scores
Posted in Consumer Financial Protection Act; Consumer Financial Protection BureauThe Bureau has issued a report to Congress which examines different credit scoring models and products, their availability and use, and how differing availability of types of credit scores may disadvantage consumers.
Section 1078 of the Dodd-Frank Wall Street Reform and Consumer Protection Act required the Bureau to “conduct a study on the nature, range, and size of variations between the credit scores sold to creditors and those sold to consumers by consumer reporting agencies that compile and maintain files on consumers on a nationwide basis…, and whether such variations disadvantage consumers,” and then to report to Congress on the results of its study.
Bureau Issues Progress Report
Posted in Consumer Financial Protection BureauOn July 18, 2011, the Consumer Financial Protection Bureau issued a “progress report” entitled “Building the CFPB“.
The report cites the Bureau’s mission as “a 21st century agency that helps consumer financial markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives.” The Bureau intends to “achieve its mission through data-driven analysis, innovative use of technology, [and] valuing the best people and great teamwork.”
The report articulates the Bureau’s vision of “a consumer finance market place: …where customers can see prices and risks up front and where they can easily make product comparisons; …in which no one can build a business model around unfair, deceptive, or abusive practices; …[and] that works for American consumers, responsible providers, and the economy as a whole.
Cordray Nominated to Direct Consumer Financial Protection Bureau
Posted in Consumer Financial Protection BureauToday, President Obama will reportedly nominate Richard Cordray to serve as the first Director of the Consumer Financial Protection Bureau. The position is for a five-year term, and is subject to confirmation by the Senate. Cordray had previously been tapped to lead the Bureau’s Enforcement Division.
Cordray has a long and varied background in Ohio state politics, but is most well known for his two-year tenure as Ohio Attorney General. As Ohio AG, Cordray aggressively pursued legal action and investigations of home lenders accused of “robo-signing” (submitting fraudulent or improper affidavits in home foreclosure proceedings).
Bureau Outlines Approach to Supervision of Large Depository Institutions
Posted in Consumer Financial Protection BureauThe Consumer Financial Protection Bureau (CFPB) has outlined its approach to supervision of large banks and other depository institutions whose total assets exceed $10 billion, and their respective subsidiaries and affiliates.
On July 21, 2011, CFPB will commence supervision of these larger institutions to ensure their compliance with federal consumer financial protection laws. Currently, 111 depository institutions and their subsidiaries and affiliates–which collectively hold over 80% of the banking industry’s assets–will fall within CFPB’s supervisory jurisdiction.
Bureau Partners with Military’s Judge Advocate Generals on Enforcement
Posted in Consumer Financial Protection BureauThe Consumer Financial Protection Bureau recently signed a Joint Statement of Principles with the Judge Advocate Generals (JAGs) of the United States Army, Marine Corps, Navy, Air Force, and Coast Guard. They stated a common goal “to provide stronger protections for servicemembers and their families in connection with consumer financial products and services.”
The CFPB and the JAGs agreed to collaborate to identify potential violations of federal consumer financial laws. CFPB will establish a single point of contact within its Enforcement Division for JAGs to share complaints and related information received from servicemembers and military families. The JAGs and the CFPB’s Office of Servicemember Affairs and Enforcement Division agreed to create a formal working group to coordinate responses to unlawful conduct targeted at servicemembers and their families.
The Consumer Financial Protection Bureau: It’s the Designated Transfer Date, Now What?
Posted in Consumer Financial Protection BureauJuly 21, 2011 is the “designated transfer date” under Title X of the Dodd-Frank Act and the day the new Consumer Financial Protection Bureau inherits most of the considerable powers granted it by the Act.
So what happens now?
The Changing of the Guard at the Comptroller of the Currency
Posted in Consumer Financial Protection BureauAfter a five-year term of office, John C. Dugan stepped down as Comptroller of the Currency on Sunday. John Walsh was named the acting Comptroller of the Currency. This appointment may have been a surprise for those that expected the current Deputy Comptroller, Julie Williams, to be tapped for the top spot.