By: Jon Eisenberg
Few agencies have generated as much controversy as the Consumer Financial Protection Bureau. The brainchild of Senator Elizabeth Warren when she was still a professor and the product of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the agency is charged with being the cop on the beat for consumers much like the SEC is the cop on the beat for investors. Among its goals are preventing consumers from being subject to “deceptive,” “unfair,” and “abusive” practices and holding alleged wrongdoers accountable by bringing enforcement cases against those the CFPB believes have violated consumer financial protection laws. Consumers have flooded it with over 300,000 complaints since the agency began operations less than three years ago, and those have already proven to be a fertile source of information for its examination and enforcement programs.
To read the full alert, click here.
By: Thomas H. Petrides, John L. Longstreth
On February 28, 2014 the Department of Labor, represented by the Solicitor General, petitioned for Supreme Court review of an appellate decision invalidating a 2010 DOL administrative ruling that determined mortgage loan officers generally do not qualify for the administrative exemption from overtime under the Fair Labor Standards Act. The U.S. Court of Appeals for the D.C. Circuit held last July that a prior administrative ruling issued in a 2006 DOL Opinion Letter was established law and that DOL was therefore required to use notice and comment rulemaking to change it. The 2006 Opinion Letter had previously determined that loan officers could qualify for the administrative exemption and therefore would be ineligible for overtime pay based on that exemption. The Solicitor General argues that requiring notice and comment for an interpretive rule in any circumstances is inconsistent with the Administrative Procedure Act, which exempts interpretive rules from notice and comment requirements, and therefore the 2010 interpretation should be reinstated. The petition also argues that the D.C. Circuit decision is inconsistent with the rulings of at least two other federal appeals courts. Continue Reading
By: Soyong Cho, Kerri M. Smith
At the Mortgage Bankers Association’s National Mortgage Servicing Conference & Expo last week, CFPB Deputy Director Steven Antonakes issued a strongly-worded warning that the CFPB will continue to vigorously monitor and investigate the mortgage servicing industry. Deputy Director Antonakes stated that the CFPB will rely on its newly adopted Mortgage Servicing Rules (the “Rules”) and Sections 1031 and 1036(a) of the Consumer Financial Protection Act (“CFPA”), which prohibit unfair, deceptive or abusive acts or practices (“UDAAP”). In his speech, Deputy Director Antonakes recounted problems that had been observed in mortgage servicing and admonished that “the fundamental rules have changed forever” and that “business as usual has changed in mortgage servicing.” Specifically, the Deputy Director explained the CFPB’s expectations of servicers: Continue Reading
K&L Gates is pleased to announce the publication of its Global Government Solutions® 2014 Annual Outlook.
Our seventh edition of the Global Government Solutions® series highlights increased government involvement in global commerce and provides the latest regulatory information corporate leaders need to navigate the intersection of business and government. The K&L Gates Global Government Solutions® 2014 Annual Outlook is a collection of 50 insightful articles to help you do just that, including:
- Former U.S. Congressmen Bart Gordon and James T. Walsh on congressional deadlock
- The European Union as a business partner
- A more aggressive Securities and Exchange Commission
- New hedge fund regulations
- International trade negotiations
- Resources nationalism in emerging nations
- Tax reform
- Competition and compliance risks for government contractors
To view the report, click here. For more information on our Global Government Solutions® practice, please visit our website.
By: David L. Beam, Christopher G. Smith
The Dodd-Frank Act provided the CFPB with examination authority over, among others, “larger participants” of consumer financial product and service markets. Almost three years ago, the CFPB issued an Advance Notice of Proposed Rulemaking targeting various industries whose larger participants it was eyeing for regular examination, including money transmission. In January 2014, the CFPB issued a proposed larger participants rule for a subset of money transmitters – those engaged in foreign remittances. Continue Reading
By: Nanci L. Weissgold, Kerri M. Smith, Christopher Shelton*
*Mr. Shelton is not admitted to the practice of law in the District of Columbia.
The CFPB has released updated exam procedures for reviewing mortgage servicers, incorporating the Mortgage Servicing Rules (“the Rules”) that became effective on January 10, 2014. These updated exam procedures still focus on nine major modules covering routine servicing, default servicing, and foreclosure. However, they frequently cross-reference the TILA and RESPA exam procedures that were updated in November 2013 to reflect the Rules. Because of the overlap in coverage and the reliance on cross-referencing, the updated servicing exam procedures are shorter than the prior version of the CFPB’s Examination Manual, although there are some notable additions. Continue Reading
Members of the Consumer Financial Services Group will host a webinar series during February and March.
On February 26, 2014 from 2:00 -3:30 p.m. EST, the group will host “Navigating the Legal Landscape Between Broker and Correspondent.” Presenters include: Costas A. Avrakotos, Holly Spencer Bunting, Jonathan D. Jaffe, Kris D. Kully, Stephanie C. Robinson, David A. Tallman Continue Reading
The Consumer Financial Services Group is pleased to welcome four new partners to the practice, effective March 1.
Soyong Cho focuses her practice on commercial disputes.
Kris D. Kully advises consumer financial services providers regarding federal and state laws and regulations, including a recent focus on new mortgage origination and compensation regulations of the Consumer Financial Protection Bureau.
Kerri M. Smith advises financial service providers on issues relating to mortgage servicing and mortgage lending, and regularly counsels clients on requirements applicable to default servicing and loss mitigation.
Robert W. Sparkes, III has extensive experience in complex civil and commercial litigation, including federal and state class action litigation.
We extend our warmest congratulations to this fine group of individuals.
The Consumer Financial Services Group is pleased to share our 2013 Highlights Activities report. The report provides highlights of firm achievements, practice group events, representative matters and client publications. Please click here to view the report.
By: Krista Cooley, Kathryn M. Baugher
Out with the old, in with the “new”! The first Mortgagee Letter of 2014 has arrived, superseding the guidance contained in Mortgagee Letter 2002-14.
In Mortgagee Letter 2014-1, HUD clarifies what notice FHA-approved mortgagees must provide to delinquent mortgagors to satisfy the requirement found in 24 C.F.R. § 203.602. Under the new Mortgagee Letter, mortgagees must send delinquent borrowers the “Save Your Home: Tips to Avoid Foreclosure” brochure (HUD-2008-5-FHA) no earlier than the 32nd day of delinquency and no later than the 60th day of delinquency. This mandate replaces the previous requirement to send borrowers the “How to Avoid Foreclosure” brochure (HUD-PA-426), which has not been updated since 2001. We note that, while the requirement to send the “Save Your Home: Tips to Avoid Foreclosure” brochure is new, the brochure itself has been around for at least several years. Continue Reading