The CFPB recently began accepting consumer complaints about prepaid cards (such as gift cards, benefit cards, and general purpose reloadable cards) as well as additional nonbank products, including debt settlement services, credit repair services, and pawn and title loans. Consumers can now submit prepaid card complaints to the bureau about problems managing, opening or closing their account; overdraft issues and incorrect or unexpected fees; and frauds, scams or unauthorized transactions. They can also file gripes about prepaid card advertising, disclosures and marketing practices; as well as issues relating to adding money and savings or rewards features associated with such cards. In the coming months, the bureau plans to issue a proposed rule aimed at increasing federal consumer protections for general ...
The Mortgage Bankers Association, in a bit of a surprise move, is pressing the CFPB, the Conference of State Bank Supervisors and members of Congress for changes to the Secure and Fair Enforcement of Licensing Act and other regulations that would provide uniform testing standards for all mortgage loan officers. The development is somewhat unexpected in that the trade group is calling for regulators and lawmakers to increase the compliance load for its members. Under the SAFE Act, there are two regimes for loan officers. Loan officers who work for nonbank lenders have to be licensed. That includes testing, pre-licensing and continuing education requirements, as well as extensive criminal and financial background reviews by state regulators. Additionally, they also must ...
The Government Accountability Office has found that “opportunity exists” for the CFPB to improve the transparency of its civil penalty fund activities. On the positive side of the equation, the bureau has implemented a number of internal controls for managing the Consumer Financial Civil Penalty Fund. The CFPB has also implemented controls for tracking the collection of penalty funds, determining the allocation amount to classes of eligible victims, and monitoring the third-party vendors that distribute the funds, GAO found. In addition, the bureau has written policies that describe roles and the process related to making allocations to consumer education and financial literacy programs. “However, according to officials, the CFPB did not document the factors the fund administrator considered in determining ...
Another CFPB Official Heads for the Private Sector. CFPB Enforcement Attorney Manuel Alvarez has been hired away by Affirm, a young financial services company based in San Francisco, to be its first chief compliance officer and general counsel. In his new role at Affirm, Alvarez will oversee and manage the company’s regulatory compliance program and related actives to prevent illegal, unfair or deceptive conduct. He will also take charge of the firm’s working relationships with regulators and Affirm’s service providers. “Consumers often don’t understand the fees or interest they pay on a revolving account. That has to change,” said Alvarez. “Affirm’s commitment to delivering honest and transparent financial products totally aligns with my long-standing commitment to consumer protection.” Alvarez was ...
A trade group representing non-agency MBS investors continues to raise concerns about settlements that give servicers credit for completing loan modifications on mortgages in non-agency MBS. Regulators and others counter that the settlements include protections for the investors, who ultimately benefit from loan mods completed under the settlements. The latest flare-up involves $4.0 billion in loss mitigation actions required of JPMorgan Chase under a recent settlement with federal and state regulators. Last week, the settlement’s monitor credited Chase with $6.31 million in consumer relief under the settlement, with 56 percent of the relief completed on Chase’s own holdings and the remainder completed on loans serviced for others, likely mortgages in non-agency MBS. The settlement prompted...
A Manhattan federal judge on Wednesday ordered Bank of America to pay a $1.27 billion penalty over mortgage fraud related to Countrywide Financial’s “Hustle” program, a little more than half of what the government had said the bank should pay, while the bank and Department of Justice discuss a potential MBS fraud settlement. Last October, the DOJ and the Securities and Exchange Commission successfully proved in court that Fannie Mae and Freddie Mac lost some $850 million from thousands of loans acquired through Countrywide’s “high-speed swim lane” program – known as HSSL or “Hustle.” The loan program ran...
Close compliance with the mortgage servicing rules promulgated by the Consumer Financial Protection Bureau will continue to be a critical concern for servicers this year. Analysts at DBRS anticipate intensified scrutiny from the CFPB and a higher likelihood of fines and lawsuits from noncompliance and even technical errors. “DBRS believes that the issuance of the mortgage servicing rules has brought much-needed reform to the servicing industry,” the analysts said in a new report. It was...
Standard & Poor’s said it is working with the Securities and Exchange Commission to address issues raised by the enforcement staff in connection with botched ratings of several commercial MBS transactions in 2011. A spokesperson for S&P said the rating agency and its parent company, McGraw Hill Financial Inc., are cooperating with the SEC after receipt of a “Wells Notice” last week indicating both companies may soon be the target of a regulatory enforcement action. The SEC notice is...
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