The bureau has tightened the use of “abusive” practices under its sweeping authority to prohibit unfair, deceptive or abusive acts or practices. Industry watchers believe the impact of the new policy might be limited.
Analyst Jaret Seiberg of Cowen: "This guidance should restrict how the abusive standard can be used. This doesn't mean the CFPB can't investigate these products. It is more that its power to bring aggressive enforcement actions will be less.”
The current standard language in leveraged loan documents may expose issuers to heightened credit risk and a spike in debt service costs when LIBOR is no longer viable, according to Fitch Ratings.
While the Consumer Financial Protection Bureau’s plan to extend the qualified-mortgage patch was not unexpected, its proposal to eliminate the debt-to-income threshold has sparked a debate.
While industry groups argue the integrated mortgage disclosure rule is overly burdensome for lenders, consumer advocates caution the CFPB from taking any drastic steps.
After Pennsylvania, New Jersey and New York, the Golden State will be the fourth state to establish a state-level agency to boost consumer financial protection.
The court-appointed CFPB defender said the petition challenging the bureau’s structure is “remarkably weak.” According to him, there is no basis “to take the grave step of invalidating an act of Congress.”
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