Banks are required to provide consumers with certain information about their financial products. But under a new trial disclosure policy the CFPB finalized recently, banks may apply for a waiver to test potential disclosure improvements on a trial basis. Under the terms of the finalized policy, if the CFPB approves a specific trial, then, for the duration of an agreed testing period, the bureau will deem a testing company’s disclosure, to the extent that it is used in accordance with the terms and conditions approved by the agency, to...

Late last month, the CFPB put out an interim final rule with a request for public comment on its new rules of practice for issuing temporary cease‐and‐desist orders. The bureau’s rule generally tracks along the trajectory of the Federal Deposit Insurance Corp.’s approach. That’s likely because Section 1053(c) of the Dodd‐Frank legislation, which authorizes the bureau to issue temporary C&D orders, resembles the comparable provision in the Federal Deposit Insurance Act. Those authorities authorize a temporary C&D as an...

Last week, the CFPB brought an enforcement action against Meracord LLC, a leading debt-settlement payment processor, and CEO/owner Linda Remsberg for allegedly helping others to collect millions of dollars in illegal upfront fees from consumers. The CFPB accused Meracord and Remsberg of violating the Telemarketing Sales Rule by helping debt-settlement companies charge consumers upfront fees. The rule prohibits debt-settlement companies from charging consumers such fees before settling any of their debts. It also protects consumers from...

Loan originators these days not only are looking over their shoulders, they’re also getting skittish about what lies ahead of them. Some of their backward-facing anxiety has to do with this summer’s CFPB suit against the nonbank lender, Castle & Cooke of Utah, and two of its top executives for allegedly paying bonuses to loan officers who steered consumers into mortgages with higher rates.During a recent special webinar sponsored by Inside Mortgage Finance, an affiliated newsletter, Jay Laifman, counsel with the Buckley...

The CFPB issued a report last week on how the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) has benefited consumers by effectively eliminating over-limit fees, sharply curtailing re-pricing practices, and reducing the average size of late fees. But the report also reveals the bureau’s intentions to scrutinize add-on products, rewards programs, and other “areas of concern.” Examples of the add-on products getting eyeballed by the bureau are those having to do with debt cancellation...

The CFPB held a forum in Washington, DC, recently on campus banking that featured some clues about likely forthcoming regulatory requirements for lenders that provide such services. One initial finding provided at the event was that arrangements between financial institutions and institutions of higher education on many student banking products are not well understood. Another was that “affinity products” – those co-branded by a lender and an educational institution – do not always have more competitive features...

Overall, internal controls for the CFPB Government Travel Card program should be strengthened to ensure program integrity, according to a new report by the Federal Reserve Office of Inspector General, which audits the bureau. “While controls over the GTC issuance process were designed and operating effectively, we found that controls are not designed or operating effectively to prevent and detect fraudulent or unauthorized use of GTCs, and [to] provide reasonable assurance that cards are properly monitored and closed...

The Financial Regulatory Reform Initiative of the Bipartisan Policy Center, a Washington, DC, think tank, issued a report late last month with dozens of recommendations by which the CFPB could improve transparency and accountability. “Perhaps the most significant trend the task force discovered was that when the bureau operated in a transparent, open and iterative manner, repeatedly seeking input from all stakeholders throughout a process, the results were generally positive,” the report said. “However, when the bureau made...

Drop in GSE Loan Limit Will Harm Special Category QMs, Industry Says. In a letter late last week to the Federal Housing Finance Agency, the regulator of Fannie Mae, Freddie Mac and the Federal Home Loan Banks, the Mortgage Bankers Association warned against any lowering of the conforming loan limit for the size of mortgages that Fannie and Freddie can purchase. “Any FHFA action to lower loan limits would ... undermine the special category of QMs created by the CFPB for loans that are eligible for Fannie Mae and Freddie Mac purchase,” the MBA...

Certain members of the U.S. Senate want to see some type of analysis from FHFA on what impact lower loan limits will have on the housing and mortgage markets.