Republicans on the House Financial Services Committee recently tried to take a page out of the CFPB's playbook by setting up a page on their website to solicit industry complaints about the bureau. But now supporters of the consumer regulator are launching a publicity campaign to use it to drum up more visible public support. Leading the charge is Americans for Financial Reform, a coalition of consumer, civic and community groups, which put out a public call for people to speak out on why a "tough and effective watchdog" standing up for the public interest is needed in the consumer financial marketplace. "The House Committee on Financial Services majority is asking individuals and businesses to weigh in with stories about how the CFPB is hurting the public, arguing once again -- without any evidence --
The Republican-controlled House of Representatives, with the help of 10 renegade Democrats, voted last week to scale back some of the power and independence of the CFPB. As previously reported, H.R. 3193, the Consumer Financial Freedom and Washington Accountability Act, sponsored by Rep. Sean Duffy, R-WI, would replace the single CFPB director with a five-member, bipartisan commission appointed by the president and confirmed by the Senate. The goal here is "to ensure that a diversity of viewpoints informs the CFPB's regulatory and enforcement agenda, and to conform the CFPB's governance to that of other federal agencies charged with consumer or investor protection," according to the GOP contingent on the House Financial Services Committee.
CFPB Deputy Director Steven Antonakes was harshly critical of the mortgage servicing industry and put servicers on notice they'll likely have a higher bar when it comes to making a good-faith effort than perhaps they were anticipating. Speaking last month at the Mortgage Bankers Association's mortgage servicing conference, Antonakes noted that back in 2006, when he worked as the Massachusetts Commissioner of Banks, he collaborated with the industry, urging servicers to increase the pace of loan modifications and engage in best practices.
As the CFPB contemplates a possible rulemaking on consumer debt collection, the Consumer Mortgage Coalition advised the bureau that the Fair Debt Collection Practices Act is pretty much obsolete, as far as mortgage servicers go, due mostly to key legislative developments since the law was enacted. One such change was the 1999 enactment of the Gramm-Leach-Bliley Act consumer financial privacy protections, which are more comprehensive and more modern than those under the FDCPA, according to the CMC. Then there was passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which assigned to the bureau rulemaking authority under the FDCPA and other enumerated consumer financial laws.
Among the components of the CFPB's ability-to-repay/qualified mortgage rule, the 3 percent cap on fees and points was by far of greatest concern, a recent survey by the National Association of Realtors found. According to the NAR, 60 percent of survey respondents indicated that they were "very concerned" about the 3 percent points-and-fees cap. Also on the list of high concerns were the limitations on the annual percentage rate relative to the average prime offer rate for the general QM standard and the FHA's QM standards.
The CFPB last week urged the nation's top credit card companies to make credit scores and related content freely available to their customers. Apparently, some credit card companies recently began making credit scoring information freely and regularly available to their customers on monthly statements or through online access. CFPB Director Richard Cordray recently sent letters to the nation's top credit card companies urging them to follow suit. "A regularly available credit score may prompt more Americans to review their credit standing and pull their free annual credit report at www.annualcreditreport.com," the CFPB said.
In its first public enforcement action against a company in the for-profit college industry, the CFPB sued ITT Educational Services, Inc., over predatory lending allegations. The bureau alleges that ITT exploited its students and used high-pressure tactics to push them into high-cost private student loans that would probably end in default. The CFPB said it is seeking restitution for victims, a civil fine, and an injunction against the company. As far as the bureau is concerned, like the mortgage market in the lead-up to the financial crisis, the for-profit college industry may be experiencing misaligned incentives.
A small mortgage lender that mostly provides loss mitigation financing to distressed homeowners has strayed into the CFPB's crosshairs and was compelled to pay $83,000 in a civil money penalty to settle charges it illegally split fees in violation of the Real Estate Settlement Procedures Act. Begun in 2004, 1st Alliance Lending, LLC, is an East Hartford, CT-based lender that purchases troubled mortgages from servicers, and then reaches out to the affected borrowers and offers them new loans with reduced principal amounts under federal mortgage efforts such as the Hope for Homeowners program.
In another sign of how serious the CFPB intends to be in pursuing alleged mortgage servicing abuses, the bureau is planning to take an enforcement action against Green Tree Servicing LLC, a wholly owned subsidiary of Walter Investment Management Corp., for alleged violations of federal consumer financial laws."On Feb. 20, 2014, the Federal Trade Commission and CFPB staff advised Green Tree that it has sought authority to bring an enforcement action and negotiate a resolution related to alleged violations of various federal consumer financial laws," the parent company said last week in earnings-related disclosures with the Securities and Exchange Commission.
RSS