The Supreme Court of the United States has delayed a decision to review a case that rests on the disparate impact theory of discrimination in housing and mortgage lending. The case, Township of Mount Holly, NJ, et al., Petitioners v. Mt. Holly Gardens Citizens in Action, Inc., et al., was listed on the court’s conference schedule at the end of last week, but the justices took no action. Mount Holly is now scheduled to be considered at the court’s next conference on Oct. 26. If certiorari is granted...
The Federal Reserve Office of Inspector General recently revealed that the CFPB “plans to accept complaints about additional financial products and services” and “anticipates that referrals from state agencies will increase as the CFPB begins accepting complaints regarding nonbank products.” The disclosures were provided in the OIG’s evaluation report of the bureau’s Consumer Response Unit, which was released last week. “This news should be of concern to financial institutions because it is another clear indication that the CFPB is preparing to extend its enforcement functions...
Consumer complaints about mortgages and credit cards accounted for more than 70 percent of the roughly 79,200 complaints made to the CFPB from July 21, 2011, through Sept. 30, 2012, according to the latest data from the bureau. Mortgage-related complaints again led the way, with approximately 36,300 submitted during the period reviewed. Credit card complaints were next, with roughly 23,400, followed by 12,900 for bank accounts and services, and 2,900 for private student loans. The most common type of mortgage complaint is about problems consumers have when they can’t pay their...
Numerous industry representatives are calling upon the CFPB to significantly scale back its ambitious mortgage servicing rulemaking proposal ¨C with at least one trade group urging the bureau to withdraw it entirely. The proposed rules amend Regulation Z (which implements the Truth in Lending Act) and Regulation X (which implements the Real Estate Settlement Procedures Act). The CFPB¡¯s rules aim to bring greater transparency to the mortgage servicing market with: clear monthly mortgage statements, a warning before interest rate adjustments, options for avoiding costly...
The mortgage lending industry is now grappling with a number of potential compliance challenges with the loan originator compensation rule as currently proposed by the CFPB, with the treatment of proxies and the “zero-zero” alternative mortgage near the top of the short list. An earlier Federal Reserve rulemaking prohibited compensation based on the terms of a loan or proxies for loan terms. “The problem there is the existing rule does not define what exactly that is,” said Richard Andreano, practice group leader of the mortgage banking group at Ballard Spahr, during an...
The Federal Trade Commission has called on the bureau to do more consumer testing before it comes out with a finalized version of its streamlined, consolidated Truth in Lending Act and Real Estate Settlement Procedures Act consumer mortgage disclosure rulemaking. The FTC’s Bureau of Consumer Protection, Bureau of Economics and Office of Policy Planning submitted a comment letter to the CFPB stating that the proposed disclosures “will likely improve the information that consumers receive under current federal regulations” because they “are generally simpler and less...
The bureau brought another aggressive enforcement action against a top credit card lender at the beginning of the month, requiring three American Express subsidiaries to refund an estimated $85.0 million to approximately 250,000 customers for allegedly illegal credit card practices. The settlement also requires the companies to pay a civil monetary penalty of $27.5 million, to be split by the CFPB, the Federal Deposit Insurance Corp., the Federal Reserve and the Office of the Comptroller of the Currency, and to change a number of their practices. According to the bureau ...
Opponents of the Dodd-Frank Wall Street Reform and Consumer Protection Act that created the CFPB are finding some initial success in chipping away at various provisions of the law through legal challenges. So far, authorities of the bureau itself have escaped the crosshairs of such legal challenges. However, the legitimacy of President Barack Obama’s appointment of Richard Cordray as director of the CFPB has been challenged in a round-about manner. So far, federal regulators have twice lost in court in their efforts to defend some of the rules they put in place...
The bureau last week issued another call for public comment on the request it submitted earlier this year to the Office of Management and Budget for generic clearance of its collection of information from providers of consumer financial services and products on compliance costs and the other effects of regulations. gAs outlined in the Dodd-Frank Act, among the bureaufs objectives is to identify regulations that are eoutdated, unnecessary, or unduly burdensomef in order to reduce unwarranted regulatory burdens. In order to help support this objective, the bureau must fully understand...
The CFPB recently announced it plans to hold a field hearing on debt collection in Seattle on Wednesday, Oct. 24, 2012. Since Director Richard Cordray is scheduled to deliver remarks at the event, there is “considerable speculation” that release of the bureau’s final larger participant rule for the debt collection market is imminent and could be announced by Cordray at the hearing, according to Alan Kaplinsky, a Ballard Spahr practice leader. “It is expected that the release of the final debt collection rule will quickly be followed by the release of the CFPB’s debt collection examination...
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