The CFPB recently warned credit card companies of the risk of engaging in deceptive and/or abusive acts and practices in connection with solicitations that offer a promotional annual percentage rate (APR) on a particular transaction – such as convenience checks, deferred interest/promotional interest rate purchases, and balance transfers – over a defined period of time. The bureau said it is concerned that some companies are luring consumers with offers of reduced or zero interest for a specific purchase or balances transferred from another credit card, and then hitting them with surprise interest charges. In CFPB Bulletin 2014-02, the bureau states that it has observed that some card issuers do not adequately convey in their marketing materials that a consumer who accepts such ...

Smaller financial institutions told the CFPB they see some positive possibilities for facilitating the banking needs of certain economically vulnerable segments of society through the use of mobile technologies. However, there are certain limitations with current capabilities, as well as unique security and fraud concerns. “The increased availability and use of not only mobile phones but mobile devices across a wide spectrum of sizes, weights and portability, as well as the continuing expansion of the mobile banking functions and capabilities of those devices, offer opportunity to expand bank services to current banking customers as well as those who are termed unbanked or underbanked,” the American Bankers Association said. While mobile banking offers potential for financial inclusion, it is not a ...

The CFPB would have a handful of new oversight responsibilities for the credit-reporting sector under a discussion draft of possible legislation entitled the “Fair Credit Reporting Improvement Act of 2014,” circulated last week by Rep. Maxine Waters, D-CA, the ranking member of the House Financial Services Committee. Among the draft’s provisions is a directive for the bureau to set standards for validating the accuracy and predictive value of credit score algorithms, formulas, models, programs, and mechanisms…

In what looks like an example of a minority party member of Congress trying to outflank the majority party, Rep. Carol Maloney, D-NY, a member of the House Financial Services Committee, wrote CFPB Director Richard Cordray last week and urged the agency take specific steps to address certain checking account overdraft practices. Some of her suggestions are included in legislation she introduced last year that has not been taken up by committee. Maloney’s recommendations come despite indications that most bank customers overall pay little or nothing for their monthly banking services. Referencing a related study issued by the bureau in July, Maloney said the agency’s report provides “indisputable evidence” that consumers who have not opted in to overdraft protection are ...

The CFPB is reviewing the debt collection practices of debt buyers as part of its broader expected rulemaking on debt collection. According to Alan Kaplinsky, a practice leader with the Ballard Spahr law firm in Philadelphia, those practices could become the subject of a uniform state debt-buying code if the newly authorized Study Committee on the Transfer and Recording of Consumer Debt concludes that a uniform code will produce significant benefits to the public. The new panel was authorized this summer by the non-partisan Uniform Law Commission. The ULC noted that the Office of the Comptroller of the Currency in 2013 issued a “best practices” document that expressed concern about safety, soundness and consumer protection issues involved with such sales ...

The CFPB’s Office of Inspector General has a handful of ongoing reviews and audits underway with a projected fourth-quarter completion date, most notably audits of the bureau’s contract management and hiring processes. The OIG said its audit of the CFPB’s contract management process is a follow-up to the evaluation of the bureau’s contract solicitation and selection process. The OIG’s focus this time around will include the CFPB’s compliance with applicable rules established by what’s known as the Federal Acquisition Regulation, and the effectiveness of the bureau’s internal controls related to contract management. On a related note, the OIG is also evaluating the bureau’s hiring process, including its administration of recruitment and selection incentives to recruit new employees. This review was ...

Last week, the law firm of Fredrick J. Hanna & Associates filed a motion to dismiss the enforcement action brought by the CFPB against it back in July. The bureau accused the firm and its three principal partners – Frederick Hanna, Joseph Cooling and Robert Winter – of operating a debt-collection lawsuit mill that used illegal tactics to intimidate consumers into paying debts they may not owe.Between 2009 and 2013, the firm filed more than 350,000 debt-collection lawsuits in Georgia alone, according to the CFPB. The bureau further alleged the defendants collected millions of dollars each year through these lawsuits, often from consumers who may not actually have owed the debts.But in its motion to dismiss, Hanna & Associates argued ...

Industry Tries to Rustle Up Support for QM Points-and-Fees Legislation. The Mortgage Action Alliance, the grassroots advocacy group of the Mortgage Bankers Association, recently issued a “call to action” to its members to get on the telephone and call their Senators and urge them to pass legislation that would make key changes to the way points and fees are calculated under the qualified mortgage definition in the CFPB’s ability-to-repay rule. S. 1577, the Mortgage Choice Act of 2013, introduced last year by Sen. Joe Manchin, D-WV, exempts any affiliated title charges and escrow charges for taxes and insurance from the QM cap on points and fees. Manchin’s bill is a legislative companion to H.R. 3211, the Mortgage Choice Act, which ...

One webinar panelist noted: "It reconfigures every disclosure that we had before."

The proposed ban is coming under heavy fire from different factions of the mortgage industry, including the Council of Federal Home Loan Banks, REITs and even private investors that own mortgage stocks.