The Bureau of Consumer Financial Protection also released the proposed interim rules relating to investigations (Title 12, Chapter X, Part 1080, in case you’re keeping track). The rules apply to Bureau investigations conducted pursuant to section 1052 of the Act (12 U.S.C. 5562).
Tag Archives: CFPA
CFPB Releases Interim Rules Regarding Procedures for States to Notify Bureau of Actions to Enforce CFPA
Posted in Bureau of Consumer Financial ProtectionThe interim rule went into effect today, July 28, 2011, regarding the process by which state officials are to notify the CFPB of actions or proceedings undertaken to enforce any requirements of the Consumer Financial Protection Act (“CFPA”).
State officials are required prior to initiating any action or proceeding in any court or other administrative or regulatory proceeding against any covered person o enforce any provision of the CFPA or any regulation prescribed thereunder, including but not limited to the filing of a complaint, motion for relief, or other document which initiates an action or proceeding.
CFPA Q&A: Describe The Bureau’s Rulemaking Authority.
Posted in Bureau of Consumer Financial Protection; Consumer Financial Protection ActExpansive. The Consumer Financial Protection Act’s ("CFPA") Bureau of Consumer Financial Protection ("Bureau") will not only be big, but it will have broad and sweeping rulemaking authority. Specifically, the Bureau’s Director, once selected and confirmed, will have the power to "prescribe rules . . . as may be necessary or appropriate to enable the Bureau to administer and carry out the purposes and objectives of the Federal consumer laws, and to prevent evasions thereof." The Bureau’s purpose is "ensuring that all consumers have access to markets for consumer financial products and services and that markets for consumer financial products are services are fair, transparent, and competitive." The Bureau’s objectives include exercising its authority to ensure that, among other things:
- consumers get timely and understandable information about consumer financial products;
- outdated and burdensome regulations are modified to reduce unwarranted regulatory burdens;
- the Federal consumer financial law is consistently enforced; and
- consumers are protected from discrimination, and unfair, deceptive, or abusive acts and practices.
In short, the CFPA’s virtually all-encompassing rulemaking power covers almost every aspect of most consumer financial products.
Learn More About The Bureau And The CFPA
Posted in Bureau of Consumer Financial ProtectionTitle X of the Dodd-Frank Act creates a new comprehensive statutory framework and federal regulatory watchdog to deal with the offering and provision of consumer financial products or services. There is little doubt that this legislation will have a major impact on the financial industry going forward. To learn more, join the August 2, 2010 Web conference "Consumer Financial Protection Act: What Lenders Need to Know."
Death Knell Ringing For An Independent CFPA?
Posted in Consumer Financial Protection AgencyNobody knows the banking system like the Fed. What better place, then, to house a consumer financial protection agency (CFPA)? The Fed’s insight into the banking system leaves it well-positioned to develop, coordinate, and implement new and existing rules applicable to credit cards and other consumer financial services products. Rather than create a completely new federal bureaucracy to govern the regulation of consumer financial services products, as proposed by the House of Representatives, the Senate proposes a more measured response: house the CFPA in the Fed.
As Craig Torres and Yalman Onaran of Bloomberg Business Week are reporting in their article, “Consumer Agency Within Fed Seen as Victory for Banking Industry,” the debate about whether to have an independent CFPA boils down to this:
Banks say placing the agency with the Fed alleviates their concern that an independent entity would ignore the health of the financial system. Consumer advocates say it’s a mistake because the Fed didn’t succeed in curbing abuses during the subprime lending boom that contributed to the worst financial crisis since the Great Depression.
Representative Barney Frank, chair of the powerful House Financial Services Committee, calls the Senate proposal “a joke,” and has lashed out at the Fed, calling its track record of consumer protection its “most conspicuous failure.” On the other hand, Senator Chris Dodd, chair of the Banking Committee, is pushing a CFPA that would create a bureau within the Treasury Department or within a new overarching bank regulator that would have authority to write consumer-protection rules.”
So what is the likely outcome? Negotiations in Washington are accelerating, but the issue is so divisive that attempts to find middle ground could thwart the entire effort. As Jim Kuhnhenn reported in the AP, “Dodd, Corker regulatory offer gets cool reception,” when the new proposal came up yesterday in the Banking Committee, it achieved virtually no traction.
Stay tuned…
More News on the Potential Fate of the CFPA
Posted in Consumer Financial Protection AgencyIt looks like the proposed Consumer Financial Protection Agency may never see light of day. Republicans and democrats appear to be at an impasse over the amount of power and independence the CFPA would have. Senator Dodd has publicly stated that he will not go ”begging” for the 60th vote in the Senate, which makes the passage of the previously envisioned, all-powerful and independent CFPA highly unlikely. Read more here.
Senate at Impasse on Financial Reform
Posted in Consumer Financial Protection AgencyAfter reaching “an impasse” in negotiations with Senate Republicans on financial regulatory reform, Senator Dodd has stated that he will begin drafting legislation to present to the Senate Banking Committee. It will be interesting to see if Senator’s Dodd’s proposal appeases any Republicans since the Democrats no longer have 60 votes in their caucus.
Here is an article analyzing the differences between the House bill and the latest Senate approach.
Barney Frank Fires Back At “Innaccuracies”
Posted in Consumer Financial Protection AgencyRepresentative Barney Frank, chair of the House Financial Services Committee (“FSC”), has issued a memorandum to the members of the FSC addressing certain issues raised by various news publications. The substance of the memorandum is as follows:
Some inaccuracies have appeared in the press about institutions exempted from the reach of the Consumer Financial Protection Agency in the House-passed financial reform bill. For instance, yesterday’s New York Times reported that it “exempted smaller community banks, credit unions, retail merchants …”. Not true. All of those institutions will be subject to all rules issued by the agency with respect to the extension of credit. They also will be subject to agency enforcement. The exemption for smaller financial institutions is only with respect to examination which will continue to be the responsibility of the institutions’ prudential regulators. However, the CFPA will have back-up inspection authority and may independently take enforcement action. And even this exemption is limited to institutions with less than 2% of bank assets.
Importantly, the new agency will also have authority with respect to the now lightly or unregulated institutions such as pay day lenders and check cashers firms which are especially important to lower income families. It also will have authority over independent mortgage brokers and lenders that led the industry in issuing subprime and abusive option ARM mortgages.
Consumer protection has long been a weak link in our system of financial regulation and the meltdown of the subprime mortgage market is only the most dramatic example of the consequences of our failure in this area. The President’s position on closing this gap is of great importance.
Leading consumer protection advocates unanimously support the President. Harvard professor Elizabeth Warren said when the House bill passed, “the banks lost today.” That same day, Travis Plunkett from the Consumer Federation of America said that “The CFPA will allow consumers to shop or take out a loan knowing that there is an agency looking out for their best interests.”
Click here to read the memo as it appears on the FSC’s website.
Dodd Watch: Will He Abandon The CFPA?
Posted in Consumer Financial Protection AgencySpeculation continues about what will happen to the pending legislation promoted by retiring and now lame duck senator Chris Dodd. That legislation, of course, includes the creation of a new Consumer Financial Protection Agency (“CFPA”) and a whole host of bureaucratic additions to the federal government. You can read more about that from us by clicking here and here. The Wall Street Journal is now reporting that, in order to get something passed this year, Senator Dodd may jettison the CFPA as an independent agency, favoring instead a new body within an existing agency like the Treasury Department. If true, this proposal is a far cry from what the White House originally contemplated. We’ll keep you posted. Read more from the Journal article here.
The Amended CFPA Passes The House; Financial Reform Debate Moves To Senate
Posted in Consumer Financial Protection AgencyBy a close vote (223-202), the House passed H.R.4173 — the Wall Street Reform and Consumer Protection Act (“WSRCPA”) – on December 11, 2009. The WSRCPA includes the Consumer Financial Protection Agency Act (“CFPA”).
Significantly, one of the major sticking points prior to passing the WSRCPA was the creation of a new Consumer Financial Protection Agency (the proposed new bureaucracy under the CFPA is discussed here). An amendment to the CFPA was introduced that would have created a council of regulators housed at the Treasury Department comprised of various existing regulators of banks and other financial institutions. The amendment failed, however, and the CFPA made it through the House with the Agency in tact.
Getting To Know The CFPA: Part I – The New Bureacracy
Posted in Consumer Financial Protection AgencyWith the debate over the Consumer Financial Protection Agency Act (“CFPA”) about to hit the floor of the House of Representatives, there is no better time than now to start digesting the massive reforms proposed by the CFPA.
Will the CFPA pass? Most agree that the CFPA will see several amendments before it comes close to a final vote in both houses of Congress, particularly because the CFPA is part of the larger Wall Street Reform and Consumer Protection Act of 2009 (“WSRCPA”). At the moment, there are over 250 proposed amendments to the WSRCPA in the House. Of those, only about two dozen are likely to see the floor of the House for debate, which could begin as early as today. The clock is ticking, of couse. There are only eight to 10 days left in the current legislative session.
Are You Prepared? The Consumer Financial Protection Agency Act of 2009
Posted in Consumer Financial Protection AgencyThis week, the House of Representatives will be debating the Consumer Financial Protection Agency Act of 2009 (“CFPA”), which is now part of the omnibus Wall Street Reform and Consumer Protection Act of 2009. Stay tuned to The Bulletin for the latest on the CFPA debate, as well as a multi-part series reviewing the various provisions of CFPA. The “Getting To Know The CFPA” series kicks off with an overview of the massive bureaucracy that will be set up following the passage of the Act.
Click here to to read the first installment.
Debate Rages On Over Structure Of Consumer Financial Protection Agency
Posted in Consumer Financial Protection AgencyRepresentatives Barney Frank and Henry Waxman are debating the leadership structure of the agency to be created by the pending Consumer Financial Protection Agency Act of 2009. Rep. Frank is looking for a structure with a single director whereas Rep. Waxman is looking for leadership in the form of a five member bipartisan commission. For more on this debate, see The Hill’s Blog here and here.