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Inside the CFPB

March 25, 2013

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Will GOP Senators Make Cordray A Lame Duck? Does it Matter?

With Senate Republican opposition to the structure of the CFPB showing no signs of faltering going into Congress’ spring break, speculation has begun to shift to what might happen at the bureau should the GOP again succeed in blockading Richard Cordray’s nomination as head of the bureau. The Democrat-controlled Senate Banking, Housing and Urban Affairs Committee last week approved, as expected, President Barack Obama’s nomination of Richard Cordray to be the director of the CFPB for a full, five-year term... Read More

Feds Try to Keep Canning at Bay While Hensarling Targets Funds

The National Labor Relations Board announced earlier this month that it will not seek en banc rehearing in Noel Canning v. NLRB, in which the U.S. Court of Appeals for the District of Columbia affirmed that President Barack Obama’s Jan. 4, 2012, recess appointments of three members to the board were unconstitutional. “The board, in consultation with the Department of Justice, intends to file a petition for certiorari with the United States Supreme Court for review of that decision,” the NLRB said. The petition is due... Read More

CFPB Targets Auto Lenders For Discriminatory Markups

In a sign that fair lending enforcement may be about to flex its muscle in the auto finance sector, the CFPB last week issued a bulletin asserting the authority to hold indirect auto lenders accountable for illegal, discriminatory pricing markups, and providing guidance to such lenders within the bureau’s jurisdiction on how to appropriately handle fair lending risk. “Consumers should not have to pay more for a car loan simply based on their race,” said CFPB Director Richard Cordray. The bureau’s bulletin “clarifies... Read More

Bureau Complaint System Might Now Include Debt Collection Issues

The CFPB might be on the verge of accepting consumer complaints about debt collection and/or payday and short‐term loans, if the bureau is not already doing so. This would be another indication that the CFPB is aggressively expanding its efforts to protect consumers throughout the financial services sector. The bureau plans to hold a public field hearing in Des Moines, IA, later this week to discuss its consumer complaint database. The field event is expected to… Read More

CFPB Exercising Authority Over 60 Percent of Debt Collection Market

The CFPB now has the lion’s share of the oversight of the consumer debt collection market. Under the “larger participant” rule recently adopted by the CFPB, any firm with more than $10 million in annual receipts from consumer debt collection activities is now subject to the bureau’s supervisory authority. “This authority extends to about 175 debt collectors, which accounts for over 60 percent of the industry’s annual receipts in the consumer debt collection market,” the bureau said in its annual report to Congress on the Fair... Read More

Points-and-Fees Bill Would Supplant, Ease CFPB Definition

Reps. Bill Huizenga, R-MI, and David Scott, D-GA, both members of the House Financial Services Committee, have reintroduced the Consumer Mortgage Choice Act, H.R.1077, legislation that would ease the definition of points and fees that the CFPB articulated in its ability-to-repay final rule issued in January. The definition is a key factor in determining whether a mortgage is a “qualified mortgage,” which requires that fees and points not exceed 3 percent. Currently, the definition would make hundreds of thousands of... Read More

Bureau Takes on Supervision of Big Nonbank Student Loan Servicers

The CFPB issued a proposed rule that would extend its supervisory authority to large nonbank student loan servicers, which it would define as those handling more than 1 million borrower accounts. With that threshold, the bureau estimates that it would have authority to supervise the seven largest student loan servicers. “Combined, those seven service the loans of 49 million borrower accounts, representing most of the activity in the student loan servicing market,” the CFPB said. The bureau currently oversees student loan servicing at... Read More

CFPB Samples Input Received On Student Loan Affordability

The CFPB recently provided a sampling of the kind of input it has been receiving as part of its student loan affordability initiative.Some of the issues identified by the more than 500 responses received to date include refinance products and the capital markets. “A number of participants, including a publisher of websites on financial aid and a start‐up CEO, described how there may be significant demand for credit‐worthy borrowers to refinance their loans and lock‐in lower rates, but creative lenders face hurdles in the capital markets... Read More

CFPB Reverses Fed Interpretation On Credit Card Fee Limits

Late last week, the CFPB issue a final rule amending the Truth in Lending Act’s Regulation Z, stating that the 2009 Credit Card Act’s limits on fees apply only during the first year after an account is opened. The rule reverses a previous interpretation from the Federal Reserve back in 2011 which said that the act’s provisions (which limit fees a card issuer can charge to 25 percent of the account’s credit limit when first opened) also applied to fees charged before the account was opened... Read More

OIG Expected to Issue Results of Two CFPB Audits by Month’s End

The Federal Reserve Board Office of Inspector General is expected to produce the results of two CFPB-related audits by the end of this month, one of which is an evaluation of the CFPB’s contract solicitation and selection process. “This evaluation’s objective is to determine whether the CFPB’s contract solicitation and selection processes and practices are compliant with applicable rules established by the Federal Acquisition Regulation,” the OIG said in its latest work plan. “We plan to focus on a specific contract... Read More

Chow, Gibbs, Kaplan, Carley Announced as Regional Directors

The CFPB recently announced regional directors in its Office of Supervision Examinations. Edwin Chow, in the West region, is one of the founding staffers of the CFPB, and he joined the implementation team in September 2010. He brings 26 years of experience serving as acting regional director, regional deputy director, and assistant regional director with the Department of the Treasury’s Office of Thrift Supervision and the Federal Home Loan Bank Board San Francisco office. Anthony Gibbs, in the Midwest region, is the newest... Read More

Worth Noting

Grassley Can’t Get a Vote on Independent IG. As the Senate was wrapping up its calendar before its spring break with an extensive amount of work on a budget, Sen. Chuck Grassley, R-IA, was pushing a non-binding amendment calling for the creation of an independent inspector general at the CFPB – a role currently being filled by the Federal Reserve Board Office of Inspector General. An aide to Grassley said his amendment was not able to get called up for a vote, due to the sheer volume of amendments being advanced by members... Read More

Heard Around Town/Looking Ahead/Technology Update

The Biggest Threat to Credit Unions? The CFPB. During “Regulatory Update Day” at the National Association of Federal Credit Union’s Regulatory Compliance School last week, NAFCU General Counsel and Vice President of Regulatory Affairs Carrie Hunt said, “The CFPB is the biggest threat to credit union operations.” Mortgage Market Needs Confidence, Reliability Restored. “This country has a tremendous need to restore confidence and reliability to the mortgage market, which as you know is the single largest market for consumer finance,”... Read More

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