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Inside the CFPB

August 12, 2013

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State National Bank, State AGs Continue Challenge to Bureau

A group, including State National Bank of Big Spring, TX, and 11 state attorneys general, have appealed a recent district court dismissal of their lawsuit that challenges the constitutionality of the CFPB as well as President Obama’s recess appointment of Richard Cordray as the bureau’s director. “The district court’s opinion is deeply flawed,” C. Boyden Gray, lead counsel for the plaintiffs, said in announcing the appeal. “It is disturbing that the opinion – and the government – ignored the very real harm Dodd-Frank has... Read More

GOP Probes Ex-CFPB Staff Over Regulatory Revolving Door

House Financial Services Chairman Jeb Hensarling, R-TX, and House Oversight and Government Reform Committee Chairman Darrell Issa, R-CA, sent a letter to CFPB Director Richard Cordray recently, expressing concerns that senior employees have left the bureau in order to profit from the very rules they helped create. “Simply put, it appears that former CFPB employees are now offering financial products in a market sector created by the very rules they were in a position to influence while working in senior leadership positions... Read More

QM/QRM/Dodd-Frank Might Be Killing Off Joint Ventures

Up until recently, if a mortgage joint venture of Wells Fargo asked its partner if the megabank was still feeling the love for joint ventures, the answer would’ve been yes. At least that’s the word from one JV executive who received the news recently that Wells was tossing all of its origination JVs overboard. Earlier in the year, the bank told its two largest JVs – HomeServices Lending and Prosperity Mortgage – that everything was hunky dory. Well, apparently not. Of course, both Home and Prosperity needn’t worry... Read More

Due Diligence in Vetting Vendors Critical to QM Compliance

With the prospect of the qualified mortgage right around the bend for the mortgage lending industry, it could be easy for lenders to be so focused on getting their points-and-fees calculation to a point of near-perfection. But don't lose sight of your third-party vendors. Michael Chan, vice president at ComplianceEase in Burlingame, CA, gave some attendees at a recent Inside Mortgage Finance webinar on the QM a list of features and characteristics that should be part of a lender's every due diligence effort to vet and review a... Read More

Industry Groups Urge CFPB Not to Proceed With Credit Card Survey

The CFPB should not proceed with a proposed telephone survey on credit card dispute resolution, three financial services trade groups said in a comment letter. First, the Financial Services Roundtable, the Consumer Bankers Association and the American Bankers Association said the proposed survey is inconsistent with the bureau’s mandate under the Consumer Financial Protection Act. Section 1028(a) of the CFPA provides that the bureau shall “conduct a study of, and shall provide a report to Congress concerning, the use of agreements... Read More

Inability to Modify Repayment Terms Chief Student Loan Gripe

Borrowers in the near-$1.2 trillion student loan market had a number of concerns about processing of payments, obtaining documentation about their loans, finding accurate information about their loan status and repayment options, and accessing basic account information, according to an updated mid‐year snapshot of private student loan complaints from the CFPB. Last October, the CFPB Student Loan Ombudsman’s first annual report identified servicing issues that were cited by private student loan borrowers in their complaints... Read More

Private Student Loan Providers Ask Bureau for 30 Days Grace on Rates

Congress and the White House may have cut many of the nation's student borrowers a break by enacting the Bipartisan Student Loan Certainty Act of 2013, which restored lower interest rates for student loans after rates doubled on July 1. But the student lending industry is pleading with the CFPB to immediately provide private student loan providers with a 30-day compliance grace period for lenders and servicers to make the necessary changes to their systems so they can accurately disclose the interest rates for federal... Read More

Fannie, Freddie Dataset to Support Pending CFPB Closing Disclosures

Even though the CFPB has yet to release its final rule and related forms under its consolidated consumer disclosure project, Fannie Mae and Freddie Mac recently announced they are working on a standardized dataset to support the forms when the rule is finalized by the bureau, which is expected in October. The government-sponsored enterprises’ dataset is called the Uniform Closing Dataset, and is a component of Fannie’s and Freddie’s Uniform Mortgage Data Program, an ongoing effort to enhance the accuracy and quality of loan data... Read More

CFPB Provides New Guidance For Responding to Customers

The CFPB has recently posted new “response guidance” for companies when they log into their online company portal with the bureau. The guidance – some of it general in nature, some of it product-specific – supplements the bureau’s company portal manual, providing recommendations for documenting and responding to consumers' complaints based on the agency's best-practice observations. In terms of the general response guidance that applies to all products and response types, the CFPB suggests, first, when referencing past... Read More

FTC Seeks to Extend Enforcement Partnership With Consumer Bureau

The Federal Trade Commission plans to ask the Office of Management and Budget to extend through Nov. 30, 2016, the current Paperwork Reduction Act clearance for the FTC’s shared enforcement with the CFPB of the information collection requirements in Regulation N (Mortgage Acts and Practices – Advertising). That clearance expires Nov. 30, 2013. The FTC is inviting public comments on a handful of related issues, the first of which is whether the proposed collection of information is necessary for the proper performance of the... Read More

OCC to Tag Team With CFPB Examiners in Debt Sale Practices

The OCC plans to collaborate with CFPB examiners on reviews the OCC is undertaking of the debt sales practices of financial institutions under its jurisdiction. “Where OCC has been informed of CFPB reviews, resident OCC teams will collaborate with [the] CFPB, bringing both a safety and soundness and a consumer protection focus to these reviews,” the OCC said in a recent statement to the Senate Banking, Housing and Urban Affairs Subcommittee on Financial Institutions and Consumer Protection. “Where examiners find unsafe and unsound... Read More

Under the Microscope/What We’re Hearing/Legislative Roundup/Worth Noting/Looking Ahead

CFPB, Justice Department Probing PNC, National City Over Disparate Impact. The CFPB and the Department of Justice are jointly investigating whether mortgage loan pricing by National City and PNC had a disparate impact on protected classes, PNC revealed in its latest 10Q. “In June 2013, PNC was advised by the CFPB that it had authorized settlement negotiations with PNC, as successor to National City Corp., and by the Department of Justice that it had authorized the filing of a civil complaint against PNC, also as successor to... Read More

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