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Inside the CFPB

November 12, 2012

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Status Quo Election Means Full Speed Ahead at the CFPB

The CFPB is widely expected to proceed as fast as possible with its heavy regulatory and rulemaking responsibilities, now that President Barack Obama has fended off his Republican challenger for the White House, Mitt Romney, and Democrats have strengthened their control of the U.S. Senate. Created by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB has a single director, a limitless funding stream via the Federal Reserve, and little congressional oversight as compared to the other agencies... Read More

Speculation Mounts That CFPB Director Cordray to Move On

Well-informed sources in Washington, DC, are suggesting that Richard Cordray, head of the CFPB, is interested in moving on before the end of his term, despite the fact that the election results strengthen the hand of the agency he’s running. Under the Dodd-Frank Act, the director of the bureau is appointed to a five-year term by the president, with the advice and consent of the Senate. Cordray was nominated by President Obama, but was not confirmed by the U.S. Senate. He therefore may serve as a recess appointee until... Read More

State Regulators Urge CFPB to Move Carefully With Disclosure

Four associations representing state financial regulators told the CFPB they generally support most of what the bureau is proposing in integrating the disclosures consumers receive when they shop for a mortgage. However, they emphasized the importance of proceeding cautiously as the bureau moves ahead with the proposed rules that would amend the mortgage disclosures under Regulation Z, which implements the Truth in Lending Act, and Regulation X, which implements the Real Estate Settlement Procedures Act... Read More

CFPB, Bank Regulators Opposed To Independent Regulatory Bill

The CFPB and the federal banking regulators have jointly written a key panel in the U.S. Senate to express their opposition to legislation that would permit the president to require all independent agencies to undertake numerous additional steps and analyses as part of the rulemaking process. Introduced by Sens. Mark Warner, D-VA, Rob Portman, R-OH, and Susan Collins, R-ME, S. 3468, the “Independent Agency Regulatory Analysis Act of 2012,” would authorize the president to require independent regulatory... Read More

Bureau Exams Find Problems With Credit Cards, Mortgages

The CFPB has come out with a report highlighting problems that the agencyfs examiners found during their reviews of nonbanks and banks with more than $10 billion in assets that were conducted from July 2011 through September 2012. The deficiencies they found included improper procedures related to credit line increases for credit card holders under the age of 21, inadequate training on fair credit reporting requirements, and violations of mortgage disclosure requirements... Read More

CFPB Announces New Appeals Process For Adverse Findings

The CFPB has issued a new appeals process by which institutions under its supervision can contest certain adverse findings. However, industry attorneys are both skeptical and concerned. gThe bureau recently began issuing examination reports and supervisory letters to financial service providers that it supervises,h the bureau said in Bulletin 2012-07. gToday we are implementing a policy that would allow our supervised entities to appeal certain supervisory findings in those examination reports and supervisory letters.h... Read More

Wells Says False Claims Act Case Violates Servicing Settlement

Wells Fargo is contesting a complaint filed by the federal government that alleges the bank falsely certified loans under the FHA’s Direct Endorsement Lender Program in violation of the False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act. The Department of Justice and the Department of Housing and Urban Development are asserting that from May 2001 through October 2005, Wells regularly and knowingly participated in the reckless origination and underwriting of FHA loans... Read More

Bureau Takes Hard Line Again On CIDs, This Time With Next Gen

The CFPB recently refused to modify or set aside a civil investigative demand (CID) issued to Next Generation in connection with an investigation of the companyfs debt settlement services business. The bureau indicated in its decision and order that the probe was trying to ascertain whether companies engaged in unlawful acts or practices in the advertising, marketing or sale of debt settlement services. The CID, which the CFPB issued on Aug. 3, 2012, instructed Next Generation to appear for an investigational... Read More

CFPB Appears Open to Further Restrictions on “Dual Tracking”

CFPB Director Richard Cordray seemed to suggest recently the bureau is open to tightening restrictions on the mortgage servicing industry’s practice of “dual tracking,” by which servicers move forward with foreclosure proceedings while simultaneously evaluating a homeowner for possible loss mitigation alternatives. Appearing before attendees at a recent National Consumer Law Center Conference, Cordray conceded that the bureau has received pointed criticism from consumer advocates about its mortgage... Read More

Feds Make Another Stab at a National Mortgage Database

The CFPB and the Federal Housing Finance Agency, the regulator and conservator of Fannie Mae and Freddie Mac, have agreed to work together on setting up a National Mortgage Database, something officials hope will be the first comprehensive repository of detailed mortgage loan information. The National Mortgage Database is to include information spanning the life of a mortgage loan from origination through servicing and incorporate a variety of borrower characteristics. Specifically, the database will feature... Read More

BofA Rules the Roost in Declining College Credit Card Agreements

From 2009]2011, the number of college credit card agreements, total number of accounts open at year]end, amount of payments by issuers to the university, and number of new card accounts opened during the year all declined, according to the CFPBfs recently released 2012 Annual Report to Congress on College Credit Card Agreements. FIA Card Services, N.A., a subsidiary of Bank of America Corp., submitted 633 agreements, which represents nearly 80 percent of all agreements in effect during 2011, the report indicates... Read More

Bureau Releases Updated Supervision and Exam Manual

The CFPB has put out the second iteration of its Supervision and Examination Manual, the guide bureau examiners use in overseeing companies that provide consumer financial products and services. The manual describes how the CFPB supervises and examines these providers and gives its examiners direction on how to determine if companies are complying with consumer financial protection laws. The bureau updated the supervision manual to reflect the renumbering of the consumer financial protection regulations for which the CFPB... Read More

Worth Noting

Dodd-Frank Repeal? No. Corrections? Maybe. There will be no repeal of 2010’s landmark Dodd-Frank Wall Street Reform and Consumer Protection Act as a result of President Barack Obama’s re-election and the Democratic Party’s retention of control of the U.S. Senate, according to a post-election briefing by Wolters Kluwer. “However, a bipartisan Dodd-Frank Act corrections bill is very likely to pass in the 113th Congress that will convene in January 2013,” the firm continued, citing recent remarks by Sen. Mark Warner, D-VA... Read More

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