CFSL Bulletin The latest Consumer Financial Services Litigation news, developments, and legal thinking

Tag Archives: Dodd-Frank Act

Court Rules Semicolon in Statute Means Force-Placed Insurance Provision of RESPA is Not Yet Effective

Posted by Julie A. Angelini on Posted in Real Estate Settlement Procedures Act

In Williams v. Wells Fargo Bank, N.A., Judge Cecilia M. Altonaga of the United States District Court for the Southern District of Florida, ruled that a semicolon contained in the Dodd-Frank Wall Street Reform and Consumer Protection Act means that force-placed insurance provisions contained in the amendments to the Real Estate Settlement Procedures Act (“RESPA”) are not yet in effect. Williams v. Wells Fargo Bank, N.A., S.D. Fla., No. 11-21233-CIV-ALTONAGA/Simonton, September 19, 2011.

The Plaintiffs in this case brought claims against Wells Fargo for violation the RESPA amendments, alleging that Wells Fargo unlawfully charged homeowners for force-placed insurance after the homeowners’ property-insurance policies lapsed. The Plaintiffs alleged that Wells Fargo violated the RESPA amendments by using the force-placed insurance to generate kickbacks from a third-party insurer. The Plaintiffs rely on the RESPA amendments that require charges on forced insurance payments to be “bona fide and reasonable,” alleging that these amendments took effect on June 2, 2010 (one day after the Dodd-Frank Act was signed into law).

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The Consumer Financial Protection Act – Understanding Subtitles F through H

Posted by Christi R. Adams on Posted in Consumer Financial Protection Act

Due to the creation of the new Consumer Financial Protection Bureau (the “CFPB” or the “Bureau”), the existing federal agencies that are currently tasked with oversight of various consumer protection laws now have the unenviable task of transferring their consumer protection functions to the CFPB. The Consumer Financial Protection Act (“CPA” or the “Act”) lays out the initial foundation for the transfer of functions to the Bureau.

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CFPA Q&A: Describe The Bureau’s Rulemaking Authority.

Posted by Martin J. Bishop on Posted in Bureau of Consumer Financial Protection; Consumer Financial Protection Act

Expansive. 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.   

CFPA Q&A: How Big Will The Bureau Be?

Posted by Martin J. Bishop on Posted in Consumer Financial Protection Act

Big. The Dodd Frank Act created the Consumer Financial Protection Bureau ("Bureau"), which will have the responsibility for protecting consumers in the financial services area. The Bureau is an independent federal agency funded by the Federal Reserve Board.  While "big" could mean a lot of things, the best measure of the Bureau’s size at this early stage is to look at its funding. The Bureau’s initial budget is substantial, with the expectation of an initial budget around $550 million. To put the Bureau’s budget in perspective, it may be helpful to compare the budgets of some other large federal agencies. The Consumer Protection Safety Commission has an annual budget of $118 million. The Federal Trade Commission, which focuses on protecting consumers against unfair, deceptive or fraudulent marketing and advertising practices, had a 2009 budget of $281 million. The Equal Employment Opportunity Commission, which is expected to have a backlog of discrimination complaints in excess of 105,000 by the end of 2011, will have a 2011 budget of about $385 million. The Securities and Exchange Commission’s 2009 budget was $961 million.

Learn More About The Bureau And The CFPA

Posted by Martin J. Bishop on Posted in Bureau of Consumer Financial Protection

Title 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." 

Meet The New Boss: The Bureau of Consumer Financial Protection

Posted by Martin J. Bishop on Posted in Bureau of Consumer Financial Protection

With the passage and signing of the omnibus Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), a new era of financial regulation has been born. The 2,300 plus pages of new legislation will forever change the way financial services companies do business in the United States (and elsewhere). With that in mind, the CFSL Bulletin will publish a series of articles reviewing the 429 pages of Title X of the Dodd-Frank Act, also known as the Consumer Financial Protection Act of 2010 (CFPA). The series begins with a detailed overview of the Bureau of Consumer Financial Protection (Bureau), the new primary regulator with authority over consumer financial products and virtually every federal consumer financial protection statute. Specifically, this installment will address: 

  1. The CFPA’s Effective Date;
  2. The Bureau’s Limitations;
  3. The Structure of the Bureau;
  4. The Bureau’s Rulemaking Authority; and
  5. The Bureau’s Supervisory Authority.

Subsequent articles will focus on the CFPA’s provisions addressing preemption, enforcement, regulatory improvements, and federal consumer financial protection statutory amendments. 

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President Obama Signs The Dodd-Frank Act; The Bureau Of Consumer Financial Protection Is On Its Way

Posted by Martin J. Bishop on Posted in Bureau of Consumer Financial Protection

Jim Puzzanghera of the Los Angeles Times reports that the President has signed the Dodd-Frank Act.  With the enactment of this sweeping financial overhaul legislation comes the birth of the Bureau of Consumer Financial Protection – a new and principal regulator which will oversee consumer financial products and virtually every consumer financial protection statute.  In the coming days, the CFSL Bulletin will be present a series of articles on the new Act, and the structure and power of the Bureau.  Stay tuned…