The tug of war between the CFPB and the Morgan Drexen firm took an unusual twist late last month, with the company firing a public relations salvo in the form of an open letter to attorneys nationwide, calling on them to “stand up against the CFPB and defend access to affordable legal services for disadvantaged Americans.” “Affordable legal care in America is under fire by the CFPB, and without quick and decisive action, the legal support that millions of Americans need may be eliminated,” the firm’s letter said. “It is vital that we, as an industry, stand together to draw a hard line and demand that our representatives in Congress rein in a bureau that has specifically not been given ...

The U.S. Supreme Court plans to hear oral argument on Jan. 21, 2015, in the disparate-impact case, Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc. The fundamental legal issue in the case is whether disparate-impact claims are cognizable under the Fair Housing Act. As far as the facts of the case go, the dispute involves a statutory challenge to the allocation of low-income housing tax credits. The TDHCA distributes the tax credits associated with the Low-Income Housing Tax Credit Program throughout Texas. The ICP is a 501(c)(3) nonprofit that works to place low-income, mostly African-American Section 8 tenants in Dallas’s more affluent and largely white suburban neighborhoods. The ICP brought suit against TDHCA back in ...

The CFPB’s updated semi-annual regulatory agenda is out, and one of the tidbits it contains is that the joint agency final rule on minimum requirements for appraisal management companies is expected sometime this month. The CFPB is working on the rule with the Federal Housing Finance Agency, the Federal Reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp., and the National Credit Union Administration. The rule is designed to implement the appraisal-related amendments to the Financial Institutions Reform, Recovery, and Enforcement Act mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act. “Work to issue a final rule to implement the Dodd-Frank Act’s AMC amendments to FIRREA is ongoing,” said the CFPB’s updated agenda. ...

Special servicers continue to outperform the big banks when it comes to dealing with distressed mortgages, and that bodes well for the future of transferring distressed servicing rights, according to a new report by analysts at Compass Point Research & Trading. “Servicers have been under a ton of scrutiny in the past several quarters due to their servicing practices,” the analysts said, based on their review of homeowner complaints to the CFPB. “However, as the complaint data show, the special servicers screen as being significantly better at servicing distressed mortgages compared to the big banks.” According to their analysis, US Bank (18.2 percent), PNC Financial (14.8 percent) and SunTrust (11.3 percent) have had the highest level of complaints per delinquent ...

Debt collectors showed an even larger double-digit decline in consumer complaints filed about them with the CFPB in the third quarter of 2014 than they did in the second – a 20.5 percent drop versus a 11.5 percent decline – but the latest numbers in the bureau’s database show a huge 85.7 percent jump year-over-year. Among the top 50 ranked by Inside the CFPB, 17 companies saw triple-digit increases YOY, and one even saw a quadruple-digit increase for the period. Part of the surge could be explained by the fluid nature of the CFPB’s data collection and classification processes, which tends to reflect retroactive adjustments. For instance, back on April 1, first quarter data showed 9,140 debt collection complaints. But by July 1, ...

Almost all (92 percent) financial services executives surveyed by Aptean, an enterprise application software vendor based in Atlanta, expect the costs of handling complaints to increase as a result of the regulations and enforcement activities of the CFPB, the firm said in a new study. Aptean’s new national survey also found that almost three out of four (73 percent) organizations say they already have experienced a jump in regulatory compliance costs since the CFPB started its regulatory and supervisory roles. Also, a majority (57 percent) of financial service executives said that the complexity of complaints has increased since the CFPB started operations in 2011. Meanwhile, 39 percent say complaint complexity has stayed about the same and only 4 percent say ...

The CFPB ombudsman’s third annual report highlighted a number of concerns from industry representatives as well as consumer advocates on a range of issues critical to both constituencies. For instance, some of the industry issues the ombudsman’s office heard about in the past year were the need for additional clarity on CFPB points-of-contact for industry, a desire for more clarity on regulatory compliance for business planning and operations, and a concern about broad examination information requests. The office also received industry input about the need for normalization of data in the public consumer complaint database, the differences between the language used in consent orders and their corresponding CFPB press releases, and issues related to the formal or informal nature of ...

Industry representatives might be interested to know that the Treasury Department’s Office of Financial Research is working with the CFPB on some key regulatory initiatives. For instance, the OFR is providing technical support to the CFPB and other regulators to create a universal mortgage loan identifier to promote transparency, data aggregation, comparability, and analysis in the home mortgage market, the office said in a new report. The Dodd-Frank Act authorized the bureau to collect more data about individual mortgage loans and to mandate that entities reporting data under the Home Mortgage Disclosure Act provide a universal loan identifier for each loan or application that they are required to report. The OFR published a working paper on this subject in late ...

The most recent work plan issued by the CFPB's Office of Inspector General indicates the results of a handful of audits are expected to be completed sometime during the fourth quarter, indicating that either they will be released within the next few months or held over until sometime after the start of 2015. One such review has to do with a joint evaluation of coordination between the CFPB and other regulatory agencies. The inspectors general of the Federal Reserve, the Federal Deposit Insurance Corp., the National Credit Union Administration, and the Department of the Treasury are conducting “an evaluation of the coordination between the CFPB and other regulatory agencies with respect to conducting supervisory activities,” said the OIG’s work plan. ...

Senate, House to Wrap Up 113th Congress This Week. The U.S. Senate and the House of Representatives are expected to wrap up the affairs of the 113th Congress this week, but it was unclear as of press time whether any pending CFPB-related legislation might make its way through the national legislature’s gauntlet and wind up on the desk of President Barack Obama. Last week, the House passed a large package of tax extenders. This week, House and Senate negotiators are expected to be busy working on appropriations legislation to keep the government funded for the remainder of the fiscal year. The 114th Congress is expected to convene on Jan. 6, 2015, with Republicans firmly in control of both chambers, presenting ...