It is no secret that the CFPB is taking great interest in consumers’ complaints about credit cards. From day one, a “submit a credit card complaint” icon has held a prominent position on the agency’s home page, and CFPB representatives have talked about how credit card offers and terms are sometimes too complicated for consumers to understand.
On November 7, the Consumer Financial Protection Bureau unveiled a process designed to warn individuals and companies of possible enforcement actions against them. At its discretion, the Bureau may provide an Early Warning Notice and an opportunity to respond before deciding whether to pursue an enforcement action. This process is not required by law, however, and the CFPB may decide not to provide notice in certain cases, such as when the Bureau’s Office of Enforcement believes that prompt action is necessary. Read More
By: David L. Beam, Rebecca Lobenherz, Stephanie C. Robinson
Those who have been concerned about the expansive powers of the new Consumer Financial Protection Bureau (“CFPB” or the “Bureau”) should ready themselves for the risk assessment reviews that the Bureau is about to initiate. The CFPB recently released the first edition of its Supervision and Examination Manual (“Examination Manual”), which provides an overview of the Bureau’s supervision planning process and details the Bureau’s examination procedures. A key component of the Examination Manual is the CFPB’s Consumer Risk Assessment process, which evaluates supervised entities based on the amount of risk their activities pose to consumers, identifies sources of risk, and assesses the quality of risk controls put in place by the supervised entities.
To view the complete alert online, click here.
By: Kathryn Baugher
The CFPB is expanding its “Know Before You Owe” initiative to cover student loans. Since “Know Before You Owe” began last May, the CFPB has asked the public for input on a variety of draft mortgage disclosure forms. Now the CFPB is working with the Department of Education to gather feedback on a sample financial aid offer form. The Department of Education, as required by the Higher Education Opportunity Act, plans to publish a model form that schools can use to communicate financial aid offers to students. Read More
By: Jonathan D. Jaffe, Steven M. Kaplan, David I. Monteiro, David A. Tallman
The Bureau of Consumer Financial Protection (the “Bureau” or the “CFPB”) was designed to provide a single, integrated federal approach to consumer financial protection. But with the October 13, 2011, release of its new Mortgage Servicing Examination Procedures (the “Procedures”), the CFPB appears to leave it up to scores of individual examiners to decide in their subjective judgment whether a company’s loan servicing practices raise “unfair, deceptive, or abusive acts or practices” (“UDAAP”) concerns. A federal government that is supposed to sing in one voice has not yet harmonized its employees.
To view the complete alert online, click here.
The CFPB, which has regularly reached out to consumers online through its blog posts and its consumer complaint portal, is also seeking consumer input the old-fashioned way – in person. On October 26, Raj Date, Special Advisor to the Secretary of the Treasury for the CFPB, who previously spoke with consumers in Philadelphia, will be headed to Minneapolis, Minnesota to discuss the Bureau’s upcoming initiatives directly with consumers. The Bureau has plans on holding more events aimed at consumers throughout the country in the upcoming months.
By: Kris D. Kully
The CSBS/AARMR Multistate Mortgage Committee (MMC) released a set of examiner guidelines to assist state regulators in implementing the Federal Reserve Boards loan originator compensation restrictions. Unfortunately, those guidelines provide very little guidance for examiners in determining whether state-regulated mortgage lenders or brokers have complied with those restrictions, or for the lenders or brokers seeking to comply. Like the children’s game of Hot Potato, the Federal Reserve Board issued the rulemaking, and then handed it over to the Consumer Financial Protection Bureau, but so far has left interpretation and/or enforcement of the rule to other federal and state agencies. While there are many significant questions that remain in understanding and implementing the loan originator compensation restrictions, the new state CSBS/AARMR examination guidelines do not (and cannot really be expected to) provide those answers. This client alert highlights certain aspects of the guidelines and describes the limited take-aways provided for state-regulated mortgage lenders, brokers, and loan originators.
To view the complete alert online, click here.
In the months ahead, the CFPB will be expanding the coverage of its consumer complaint portal to include products such as mortgages and student loans. Consumers have been able to submit credit card complaints through a portal on the CFPB web site since July 21st. In addition to providing a consumer portal through which consumers can submit and check on the status of their complaints, the CFPB now provides a company portal through which companies can view and respond to consumer complaints. The CFPB recently met with industry representatives to show them how the new system works. Read More
By: David L. Beam
Raj Date recently issued a statement on the CFPB’s web site which suggests that the Bureau is considering a standardized disclosure form for checking account fees. The “problem,” Mr. Date said, “is that checking accounts often come with a wide variety of unexpected costs that can quickly add up for consumers.” One bank might call the fee one thing, while another bank calls it something else. And the circumstances under which banks charge the same fee might be different. Read More
Richard Cordray’s nomination to become the director of the Consumer Financial Protection Bureau will be in the hands of the full Senate now that the Senate Banking Committee has approved his nomination along a 12-10 party-line vote. But will the CFPB ever have an official leader in place? Not at this rate.
It has been fourteen months since Congress passed the Dodd-Frank Act, and the new government agency still has no formal leader. Read More
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