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Inside the CFPB

April 2, 2012

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CFPB Still Working on Clarifying Abusive

Consumer Financial Protection Bureau Director Richard Cordray last week indicated to members of Congress that the bureau is still working to clarify all the nuanced meanings of the term “abusive” as it relates to prohibited mortgage lending activities per the Dodd-Frank Wall Street Reform and Consumer Protection Act. Responding to a parsing of the definition of the word under questioning before the House Financial Services Committee, Cordray acknowledged some aspects of the Dodd-Frank Act’s abusive standard are “situational and somewhat subjective in nature,” such as ... Read More

CFPB Takes Borrower Side in Collections Case

The Consumer Financial Protection Bureau has intervened in an ongoing case involving a foreclosure by American Home Mortgage Servicing, the only mortgage-related probe out of three “non-public” investigations of debt collection practices to determine whether they violate the Fair Debt Collection Practices Act or the Dodd-Frank Wall Street Reform and Consumer Protection Act. The CFPB filed an amicus brief in Paul and Angela Birster vs. American Home Mortgage Servicing Inc. (11th Circuit), the agency revealed in its first FDCPA annual report to Congress, which it ... Read More

CFPB Finds Mortgage Lenders Not Very Responsive to Complaints

The Consumer Financial Protection Bureau’s first semi-annual report to Congress suggests the mortgage lending industry has a lot of work to do if it’s going to satisfy disgruntled homeowners. The report included some updates on the CFPB’s consumer complaint system, including the finding that mortgage-related complaints represented the second largest category of consumer complaints, after credit cards. Between July 21 and Dec. 31, 2011, the CFPB received 13,210 consumer complaints, including 9,307 credit card complaints and 2,326 mortgage complaints... Read More

CFPB’s Brief in TILA Case Supports Canceling of Mortgage

In Rosenfield v. HSBC Bank USA, the Consumer Financial Protection Bureau has submitted a friend-of-the-court brief arguing that some mortgage borrowers who did not receive important disclosures mandated by the Truth in Lending Act are permitted to cancel their loans as long as they notify the lender of their intent to cancel within three years. Filed before the U.S. Court of Appeals for the Tenth Circuit in Denver late last week, the CFPB argued that Section 125 of TILA (U.S.C. Section 1635) provides consumers a statutory right to rescind qualifying mortgage loans ... Read More

AG Miller Emphasizes Importance Of Settlement Implementation

Iowa Attorney General Tom Miller, the lead official behind the recent $25 billion mortgage servicing settlement, told industry representatives last week that, unlike past agreements, the AGs are going to be sticklers for full and proper implementation this time around. Implementation “is a very, very important aspect to our effort currently and going forward,” Miller said to participants in a webinar sponsored by Inside Mortgage Finance, an affiliated publication. “We put just an awful lot into this investigation and negotiations, and we don’t want it to ... Read More

House Panel OKs Bill Targeting Kickbacks, Unearned Fees

Last week, the full House Financial Services Committee passed several pieces of legislation, including H.R. 2446, the RESPA Home Warranty Clarification Act of 2011, introduced by Rep. Judy Biggert, R-IL, which advanced with one amendment. The legislation amends the Real Estate Settlement Procedures Act of 1974 to state that no prohibited kickback or unearned fee incidental to a real estate settlement service involving a federally related mortgage loan shall be deemed to include, or be deemed to have included, homeowner warranties or similar residential service contracts for ... Read More

House Goes Part Way in Fixing CFPB Privilege Waiver Issue

The full House of Representatives made some progress last week in dealing with a potential blind spot in the Dodd-Frank Wall Street Reform and Consumer Protection Act when it comes to maintaining the confidentiality privilege for information and communication shared with the Consumer Financial Protection Bureau. The House passed H.R. 4014, which was introduced Feb. 13, 2012, by Reps. Bill Huizenga, R-MI, Shelley Capito, R-WV, and Spencer Bachus, R-AL. H.R. 4014 would amend Sections 11(t) and 18(x) of the Federal Deposit Insurance Act, 12 U.S.C. §§ 1821(t), 1828(x), to make sure the CFPB can ... Read More

OCC’s Walsh Assures Federal, State Efforts Will Mesh Well

Acting Comptroller of the Currency John Walsh reassured participants at an interagency conference on the Community Reinvestment Act last week that the enforcement orders federal bank regulators issued last year and the state attorneys general national mortgage settlement will work well together. “I’ve said from the beginning that it is not only possible, but absolutely necessary, that our separate actions be able to work well together. And I think we’ve succeeded in that,” Walsh said. “The steps we have each required servicers to take to fix the problems in servicing and foreclosure processing ... Read More

State Roundup

Indiana. House Bill 1238 allows a mortgage creditor to petition to have a state court determine whether a property is abandoned, and lays out the criteria and procedures for the court to use in making its determination. Also, Senate Bill 298 stipulates that if a mortgage or vendor's lien does not show the due date of the last installment, the mortgage or lien expires 10 years after the date of execution of the mortgage or lien, not 20 years as had been the case previously. The measure provides an exception if a foreclosure action is brought prior to the expiration... Read More

Federal Roundup

Department of Housing and Urban Development.Federal Deposit Insurance Corp.Federal Reserve.Office of the Comptroller of the Currency.Treasury Department/SIG-TARP.Some Nominees Pass; Two Don’t. The full Senate has unanimously confirmed Martin Gruenberg, Thomas Hoenig, and Jeremiah Norton to be members of the FDIC Board of Directors, and Thomas Curry to be the Comptroller of the Currency, after all four had ... Read More

Worth Noting

Consumer Financial Protection Bureau Director Richard Cordray reached out to the business community last week, reiterating the bureau’s commitment to riding close herd on the mortgage lending industry but expressing a willingness to be open and to hear all concerns. “In the run-up to the financial crisis, there was insufficient accountability for those who were responsible for the foreclosure mess,” Cordray told attendees at an event at the U.S. Chamber of Commerce. “Those who sold and packaged loans illegally or irresponsibly left others holding the bag... Read More

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