The CFPB last week named Paul Watkins, a lawyer in the Arizona attorney general’s office who helped establish a “regulatory sandbox” for the state, to lead the agency’s new Office of Innovation. Watkins was chief counsel for the Arizona AG’s 150-person Civil Litigation Division, which enforces state law related to consumer fraud, antitrust and other issues. He managed the nation’s first facility aimed at reducing compliance costs and burdens for new fintech ...

The CFPB recently fined Kansas-based National Credit Adjusters and its former chief executive $800,000 for illegal debt collection practices. The bureau originally ordered a $6 million civil money penalty but suspended most of it based on the financial condition of NCA and its former CEO. The CFPB said in a consent order that NCA and its former CEO, Bradley Hochstein, purchased consumer debt and used a network of debt collection companies that frequently ...

The controversial structure of the CFPB and its enforcement tactics will likely draw skeptical attention from the U.S. Supreme Court if President Trump’s pick, Brett Kavanaugh, is confirmed by the Senate, industry attorneys said. President Trump recently nominated Kavanaugh to replace Justice Anthony Kennedy, a moderate justice who has announced his retirement. Kavanaugh is a judge of the U.S. Court of Appeals for the District of Columbia Circuit with a pro-business ...

Industry groups recently wrote to ask the CFPB to educate consumers on specific topics such as arbitration and mortgage shopping. The letters were responses to the bureau’s request for information on its financial education programs. The bureau frequently creates and publishes educational content which covers a wide range of financial topics such as borrowing and saving. The bureau also cooperates with community organizations to disseminate ...

Industry trade groups called on the CFPB to encourage consumers to contact financial services firms directly about their complaints, rather than going through the bureau. In response to the CFPB’s request for information on the process of handling consumer complaints and consumer inquiries, a number of industry groups said the bureau should direct consumers to first seek redress directly from financial institutions before filing complaints to the CFPB ...

The Mortgage Bankers Association recently asked the CFPB to exempt business-to-business loans secured by multifamily properties from Home Mortgage Disclosure Act reporting. The MBA met with the CFPB leadership recently to discuss the HMDA requirement. “The bureau appeared receptive to our concerns,” said trade group officials. Among a number of suggestions, the MBA said HMDA reporting on business-to-business loans secured by multifamily ...

Mortgage-related consumer complaints filed with the CFPB have shown double-digit declines in every major category at the midway point in the year, according to a new Inside the CFPB analysis. At the six-month mark, consumer complaints about loan applications have seen the most significant decline, down 35.0 percent for the first half from the comparable period in 2017. On a quarterly basis, this type of complaint dropped 10.8 percent from 1Q18 to [Includes an exclusive chart] ...

CFPB Joins Task Force on Market Integrity and Consumer Fraud. The CFPB recently joined a new Task Force on Market Integrity and Consumer Fraud, created by President Trump pursuant to an executive order. The task force is led by the Department of Justice, with the participation of the CFPB, the Securities and Exchange Commission, and the Federal Trade Commission. The task force will provide guidance for the investigation and prosecution of cases [Includes four briefs] ...

A federal court held this week that the single-director structure of the Federal Housing Finance Agency, headed by Director Mel Watt, violates the constitution. The ruling in Collins v. FHFA was handed down in Texas by a three judge-panel for the U.S. Court of Appeals for the Fifth Circuit. It represents the most recent major ruling in a number of Fannie Mae and Freddie Mac shareholder cases filed against the federal government. “We found, after an in-depth examination, that the FHFA is excessively insulated from executive branch influence and is, therefore, structured in violation of the Constitution,” the judges state in their 83-page ruling. And although Congress can create an independent agency, the court determined that elected officials cannot insulate...

There was some discussion as to whether credit scores serve as a good mechanism to achieve cross subsidization as well as a need for better data to manage risks, during an Urban Institute panel discussion last week focused on subsidies and GSE pricing. Credit scores aren’t a good tool to achieve cross-subsidization, according to Andrew Rippert, CEO of Global Mortgage Group at Arch Capital. He said the goal should be to serve low- and moderate-income borrowers, not necessarily to subsidize people who make a lot of money but have bad credit scores and don’t manage their credit. “Our belief is that we can do a lot better if we were very explicit about the risk in the system with regards to FICO scores,” Rippert said.