Two targets of the CFPB’s recent crackdown on the debt relief industry sued the bureau in federal district court in Washington, DC, last week, challenging the constitutionality of the agency, as well as accusing it of “data mining” and attempting to obtain sensitive bankruptcy information protected by attorney-client privilege. At the heart of the dispute is a civil investigative demand the CFPB issued in March 2012 to Morgan Drexen Integrated Systems, whose personnel served as paralegals and other support staff for Connecticut...

Complaints consumers had about their mortgages dropped across the board – loan application and origination, servicing, and modification – during the second quarter of the year, according to a new analysis and ranking by Inside the CFPB. Our review of the second-quarter data based on complaints filed with the CFPB showed that gripes about loan modifications dropped the most during the period, down 10.3 percent. Servicing-related grievances fell 6.5 percent from the first quarter, while complaints about the loan application and origination process...

Now that President Barack Obama’s nomination of Richard Cordray for a full term as director of the CFPB has gained the grudging consent of the U.S. Senate, perhaps the key issue for the financial services industry is whether the bureau will behave any differently. “The debate about the bureau is going to continue, there’s no question about it,” said one industry attorney formerly on Capitol Hill. “Clearly, on the Republican side, you can see there are serious concerns. They took the unprecedented step of refusing to initially...

The House Financial Services Committee recently voted 30‐27 to approve H.R. 2767, the Protecting American Taxpayers and Homeowners (PATH) Act, the housing reform bill introduced by Rep. Jeb Hensarling, R‐TX, the committee chairman. Among the bill’s Title IV provisions are a handful of “regulatory relief” overrides to various CFPB mortgage-related rulemakings. For example, Section 403 includes changes to the points-and-fees definitions for the “qualified mortgage”/ability-to-repay rule that also were included in H.R 1077...

Two industry groups have jointly written the CFPB requesting the bureau reconsider a final rule that requires lenders to disclose and deliver appraisals to consumers for both residential loans and commercial loans. The American Bankers Association and the Mortgage Bankers Association said the rule is going to create challenges for lenders when a dwelling is securing business credit, asserting it would place large burdens on lenders, as they may have to deliver thousands of appraisals to non-consumers in commercial settings...

The New York State Department of Financial Services is concerned that the CFPB’s proposed amendments to its mortgage loan servicing rulemaking would interfere with the state’s early-intervention efforts on behalf of delinquent homeowners. Here’s the problem, as NY DFS sees it: Under the CFPB’s proposed amendments to the mortgage rules per the Real Estate Settlement Procedures Act/ Regulation X, mortgage servicers are prohibited from making “the first notice or filing required by applicable law for any judicial or non-judicial...

The CFPB has issued new Equal Credit Opportunity Act “baseline review procedures” for use by its examiners. The procedures are made up of six baseline review modules for examiners to use “to identify and analyze risks of ECOA violations, to facilitate the identification of certain types of ECOA and Regulation B violations, and to inform fair lending prioritization decisions for future CFPB reviews.” ECOA baseline reviews are one type of fair lending review conducted by the CFPB, in addition to ECOA targeted reviews and Home Mortgage...

David Silberman, associate director for research, markets and regulation at the CFPB, appeared before the Senate Special Committee on Aging last week, mostly summarizing and discussing the bureau’s recent white paper on payday loans and deposit advance products – and revealing more regulation or oversight may be in the offing. “The bureau intends to continue its study of small dollar loan products to better understand why some consumers are able to use these products in a light to moderate way, while others seem to get trapped in a...

Corey Stone, assistant director in the CFPB’s Office of Deposits, Cash, Collections and Reporting Markets, indicated at a Senate hearing on debt collection earlier this month that the bureau might promulgate national documentation standards, perhaps in coordination with the Federal Trade Commission. Testifying before the Senate Banking, Housing, and Urban Affairs Subcommittee on Financial Institutions and Consumer Protection, Stone discussed the recent joint roundtable the bureau and the FTC held on debt collection...

More than a dozen Democrat members of the U.S. Senate have written the CFPB and the Department of Labor expressing concerns about fees paid by low‐wage workers using payroll cards and urging them to move quickly to protect American workers. “We strongly believe that your agencies have the capability to protect workers from at least some of the excessive fees and harmful practices associated with payroll cards,” the senators said. Therefore, they asked the agencies to take a closer look at whether workers adequately understand these fees...