The CFPB recently petitioned the U.S. District Court for the District of Columbia to enforce a civil investigative demand (CID) it issued back in August to the Accrediting Council for Independent Colleges and Schools (ACICS), despite congressional objections and arm-twisting. The CID was issued during a bureau probe of possible violations of the Consumer Financial Protection Act of 2010 or other federal consumer financial protection laws. “The CID issued to ACICS relates to a bureau investigation to determine whether any entity or person has engaged or is engaging in unlawful acts and practices in connection with accrediting of for-profit colleges” in violation of CFPA provisions addressing unfair, deceptive or abusive acts or practices, the CFPB told the court. The demand ...

U.S. Rep. Nydia Velázquez, D-NY, the ranking member on the House Small Business Committee, recently wrote to CFPB Director Richard Cordray for information about the role his agency has in regulating online lending to small businesses. She also wanted to know what federal laws under the bureau's jurisdiction apply to small business borrowers and retail investors participating in the online lending marketplace. Additionally, Velázquez inquired about what resources the CFPB has devoted to the regulation of online lending marketplaces. She also asked if the bureau has the necessary legal authority to protect small business borrowers and retail investors when it comes to online lending. Further, Velázquez inquired of Cordray what statutory changes, additional legal authorities and resources are necessary to ...

The U.S. House of Representatives recently passed bipartisan legislation, H.R.1737, the Reforming CFPB Indirect Auto Financing Guidance Act, which would declare “without force or effect” the bureau’s controversial guidance on indirect auto finance. At issue is CFPB Bulletin 2013-02 (Indirect Auto Lending and Compliance with the Equal Credit Opportunity Act), which the bureau published on March 21, 2013. The bill also would direct the CFPB, when proposing and issuing guidance primarily related to indirect auto financing, to provide for a public notice and comment period before issuing the guidance in final form; make publicly available all information relied on by the CFPB; and redact any information exempt from disclosure under the Freedom of Information Act. The bureau also would have ...

The CFPB more than doubled the amount of money it collected in civil penalties in fiscal year 2015 compared with FY 2014, $183.1 million versus $77.5 million, according to the bureau’s recently released FY 2015 financial report. Total cash collections in the fund from its inception, as of Sept. 30, 2015, amount to $342.14 million. Of that total, $190.12 million has been allocated to victim compensation. An additional $13.38 million has been allocated to consumer education and financial literacy programs, the default destinations of a certain amount of the penalties when victims can’t be found or identified, or when payment isn’t “practicable,” according to the bureau. Meanwhile, approximately $2.07 million has been used by the CFPB as an “administrative set-aside.” ...

State Mortgage Regulators Bring $10.2 Million Enforcement Action Against Prospect Mortgage. The Multi-State Mortgage Committee recently announced a $10.2 million settlement agreement and consent order between 50 state mortgage regulators and Prospect Mortgage over allegedly inappropriately assessed third-party settlement fees charged by an affiliate. According to the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators, a multi-state examination performed by eight states revealed a pattern of charging improperly disclosed and unsupported fees paid to the company’s affiliate, C2C Appraisal Services. Under the terms of the agreement, Prospect is to pay restitution to every borrower in all participating states that was assessed a C2C Settlement Service Fee in the amount of $40 with interest of 10 ...

Industry Groups Call for Restructuring Bureau With Commission Leadership Structure. Two dozen industry trade groups sent a letter to the House and Senate chairmen and ranking members of the appropriations committees recently in support of legislation restructuring the CFPB with a five-member board leadership mechanism, instead of its current sole directorship structure. Their focal point is H.R. 1266, the Financial Product Safety Commission Act, bipartisan legislation approved on a bipartisan basis by the House Financial Services Committee. Similar legislation was included in Section 505 of S. 1910, the Fiscal Year 2016 Financial Services and General Government appropriations bill. “Looking ahead, the current sole director structure at the CFPB jeopardizes the foundation of the bureau as an objective, neutral consumer protection ...

CFPB, Fed, OCC Announce Threshold for Smaller Loan Exemption from Appraisal Requirements for Higher-Priced Mortgage Loans. Last week, the CFPB, the Federal Reserve and the Office of the Comptroller of the Currency announced that the threshold for exempting loans from special appraisal requirements under the Dodd-Frank Act for higher-priced mortgage loans during 2016 will remain $25,500.The threshold amount will be effective January 1, 2016, and is the same threshold that applied in 2015 – based on the annual percentage decrease in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) as of June 1, 2015. ...

CFPB Attorney James Kim Joins DC Law Firm. James Kim, formerly a senior enforcement attorney with the CFPB, recently joined the Ballard Spahr law firm in its Washington, DC, office. “While at the CFPB, James led nationwide investigations involving consumer credit, mobile financial services, emerging payment systems, mortgage origination, and debt collection,” said new colleague Alan Kaplinsky, a partner at the law firm. “He was lead counsel in the CFPB’s first enforcement actions involving mobile payments and was a member of the credit card/prepaid card/emerging payments issue team that helped coordinate enforcement activity with other offices at the CFPB.” ...

Commercial banks and savings institutions continued to pull back from the non-mortgage ABS market during the third quarter of 2015, according to a new Inside MBS & ABS analysis of call-report data. Banks and thrifts reported a combined $140.93 billion of non-mortgage ABS on their books at the end of September, down 5.3 percent from midyear. The decline marked the seventh consecutive decline in bank ABS holdings since they peaked at $175.54 billion at the end of 2013. Bank ABS investment tumbled 15.0 percent in the year since September 2014, hitting its lowest level since the end of 2011. The industry’s holdings were down in all ABS categories. In percentage terms, the sharpest downturn was in home-equity ABS, although this ...

Some investors won’t return to the non-agency MBS market until the federal government establishes minimum standards for issuers, according to Chris Katopis, executive director of the Association of Mortgage Investors. Speaking at the RMBS 3.0 symposium produced by Information Management Network and the Structured Finance Industry Group this month in New York, Katopis said investors are frustrated with the lack of action from the government to help the non-agency MBS market. “We know there’s a lot of work going on, but at some point the government has to set minimum standards,” he said.Katopis said investors are happy that SFIG is working on a new representation-and-warranty framework for non-agency MBS. However, the AMI is skeptical of voluntary industry standards. “Having ...