The Consumer Bankers Association took issue with letters CFPB Student Loan Ombudsman Rohit Chopra recently sent to financial institutions that have contractual relationships with colleges and universities, calling for public disclosure of their campus marketing agreements. Chopra’s letter stated the institutions’ failure to be transparent about the terms of these proprietary agreements “may pose potential consumer protection risks.” However, CBA President and CEO Richard Hunt said Chopra did not provide any basis for or evidence to support these provocative claims. “On the contrary, relationships between banks and schools often provide students with great benefits by providing much needed financial literacy, safe and secure debit cards, low or no-fee checking accounts and access to convenient on-campus branches and ATMs; and students ...

CFPB Student Loan Ombudsman Rohit Chopra is raising the headline risk for banks that fail to be transparent about the campus financial product marketing agreements they have with colleges and universities. In a recent blog post alerting colleges and students about “secret banking contracts,” Chopra indicated the bureau has been mailing out letters to such educational institutions “to make sure they know that their bank partner has not yet committed to transparency when it comes to student financial products” because the financial institution has not yet posted its marketing agreement with the school on its website. Last year, the CFPB launched an inquiry into financial products marketed to college and university students to determine whether the market is working for...

The CFPB, the Federal Trade Commission and 15 state attorneys general, as well as other state agencies, announced a number of legal actions last month against alleged foreclosure relief scammers they accused of using deceptive marketing tactics to rip off distressed homeowners across the country. The CFPB filed three lawsuits against companies and individuals it asserted collected more than $25 million in illegal advance fees for services that falsely promised to prevent foreclosures or renegotiate troubled mortgages. The bureau is seeking compensation for victims, civil fines and injunctions against the companies and individuals it identified. One of the lawsuits was filed against Clausen & Cobb Management Company, Inc., its owners, Alfred Clausen and Joshua Cobb, and their business associate, attorney ...

The CFPB recently began accepting consumer complaints about prepaid cards (such as gift cards, benefit cards, and general purpose reloadable cards) as well as additional nonbank products, including debt settlement services, credit repair services, and pawn and title loans. Consumers can now submit prepaid card complaints to the bureau about problems managing, opening or closing their account; overdraft issues and incorrect or unexpected fees; and frauds, scams or unauthorized transactions. They can also file gripes about prepaid card advertising, disclosures and marketing practices; as well as issues relating to adding money and savings or rewards features associated with such cards. In the coming months, the bureau plans to issue a proposed rule aimed at increasing federal consumer protections for general ...

New issuance of non-mortgage ABS dropped slightly during the second quarter of 2014 from the robust levels recorded in the first quarter of 2014, according to a new analysis and ranking by Inside MBS & ABS. A total of $49.14 billion of non-mortgage ABS were issued during the April-to-June cycle, an 8.0 percent decline from the first quarter of 2014. But new issuance remained...[Includes three data charts]

The CFPB filed a lawsuit in a federal district court last week against Frederick J. Hanna & Associates, based in Marietta, GA, and its three principal partners – Frederick J. Hanna, Joseph Cooling, and Robert Winter – accusing them of operating a debt-collection lawsuit mill that used illegal tactics to intimidate consumers into paying debts they may not owe. “The CFPB alleges that the firm operates like a factory, producing hundreds of thousands of debt- collection lawsuits against consumers on behalf of its clients, which mainly include banks, debt buyers and major credit card issuers,” the bureau said. Between 2009 and 2013, the firm filed more than 350,000 debt-collection lawsuits in Georgia alone, according to the CFPB. The bureau further alleged the ...

The CFPB is now collecting consumer complaints about seven different segments of the financial services sector, and its latest cumulative report on the subject indicates the Dodd-Frank Act’s cop on the beat is only going to continue to expand its dragnet. So far, the CFPB is accepting complaints about credit cards (as of July 21, 2011), mortgages (Dec. 1, 2011), bank accounts and services (March 1, 2012), credit reporting (Oct. 22, 2012), money transfers (April 4, 2013), debt collection (July 10, 2013), and payday loans (Nov. 6, 2013). “The CFPB continues to work toward expanding its complaint handling to include other products and services under its authority, such as prepaid cards. Consumers may also contact the CFPB about other products ...

If an FHA borrower runs out of options for loss mitigation and home retention, a lender must first consider a pre-foreclosure or short sale, with deed-in-lieu (DIL) of foreclosure as a second option, according to new FHA guidance. Mortgagee Letter 2014-5 states that the lender must first determine whether the borrower facing default or at risk of default qualifies for a pre-foreclosure sale (PFS). The FHA allows pre-foreclosure sales to be processed as either a “standard PFS” or a “streamline PFS.” The former is available only to owner-occupants while the latter is for both owner- and non-owner-occupied single-family properties. In determining standard PFS eligibility, the lender must use a “deficit income test” to determine whether the borrower is experiencing hardship and is able to sustain his or her mortgage. A DIT resulting in a negative amount would likely qualify the borrower for a ...

Consumer complaints to the CFPB continued their quarter-by-quarter rise and fall, but one strong message from second quarter data is that financial services providers of all types saw a big improvement in the sheer volume of gripes, a new analysis by Inside the CFPB found. Overall, criticisms fell by 14.8 percent in the second quarter compared to the first quarter. Of the eight categories of consumer criticisms we track, seven saw double-digit improvements in 2Q14, ranging from an 11.3 percent drop related to bank accounts, to an 18.5 percent fall having to do with home mortgages. The sole category that saw an increase in the period ended June 30, 2014, was money transfers, which saw a rise of a scant [with 3 charts] ...

The American Bankers Association, the Consumer Bankers Association and the Financial Services Roundtable urged the Office of Management and Budget to put the kibosh on the CFPB’s proposal to conduct a national telephone survey of 1,000 credit card holders. The proposal is part of the CFPB’s study of the use of mandatory arbitration agreements in connection with the offering of consumer financial products and services. “The associations strongly recommend that OMB not approve the proposal because it will not produce information of practical utility, remains materially flawed and is inconsistent with the statutory mandate,” the groups said in a joint letter. Instead, the groups recommended that the bureau focus on obtaining important consumer information related to arbitration, including information with ...