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Inside the CFPB

September 23, 2013

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CFPB Fines Chase $329 Million Over Illegal Credit Card Practices

The CFPB ordered Chase Bank USA, N.A., and JPMorgan Chase Bank, N.A., to refund an estimated $309 million to more than 2.1 million customers for allegedly enrolling them in credit card “add-on” products without their authorization and for charging them for credit monitoring services that they did not receive, the agency announced late last week. The restitution has already taken place, and most affected cardholders should have received their refunds by Nov. 30, 2012. The bureau also ordered Chase to make a $20 million penalty... Read More

January Deadlines Unchanged as CFPB Finalizes Rule Amendments

The CFPB recently finalized the amendments and changes it proposed this past June to some of its pending mortgage rulemakings slated to take effect this coming January – mostly having to do with the mortgage servicing and loan originator compensation final rules. The revisions include a handful of changes sought by various industry groups. The amendments “principally address several important questions that have emerged during the implementation process for the mortgage servicing and loan originator compensation rules,”... Read More

Lender Proxies on Capitol Hill Press Cordray on QM Implementation

The CFPB’s ability-to-repay qualified mortgage rule is steaming full speed ahead with January implementation, and that has anxious lenders appealing to sympathetic ears on Capitol Hill for relief, one way or another. During a hearing earlier this month before the House Financial Services Committee, Rep. Shelley Moore Capito, R-WV, raised with CFPB Director Richard Cordray concerns she’s been hearing from some of her mortgage lender constituents about the bureau’s pending mortgage rules, including the ATR/QM. During a roundtable she held... Read More

Industry Groups Continue Calls For Implementation Changes, Delays

Mortgage lending trade group representatives are ramping up the crescendo of industry calls for the CFPB to make even more changes to its pending mortgage rules, or for an implementation delay, or both. It’s not easy to satisfy them, though, which some industry participants will privately concede. On the one hand, the industry keeps pressing for numerous changes and revisions, yet on the other hand, complains that each new change or revision further complicates their efforts to get into compliance. Be that as it may, the calls... Read More

Cordray Suggests Aggressive Rulemaking Around the Corner

In a recent question-and-answer with the Washington Post, CFPB Director Richard Cordray indicated the bureau is not going to ease up as it moves forward with rulemaking in the payday-lending, debt collection and prepaid-card sectors of the financial services industry. “We will be undertaking rulemaking in the debt-collection area,” Cordray told the Post. The work on that will get started later this fall. As the nation’s top consumer regulator sees it, debt collection is an area that is in need of revision and updating... Read More

Better Borrower Communication is Key for Servicing Rule Compliance

It’s now being said that consumer complaints may be the biggest regulatory threat companies face in the era of the CFPB, perhaps especially so for those operating in the mortgage sector. So a fully competent compliance management system will be essential for companies striving to comply with the bureau’s mortgage servicing requirements; otherwise, they likely face fines and/or disgorgement. But a solid CMS is only the means to an end, and it all boils down to better communication with the borrower, top industry and vendor... Read More

Industry Gets CFPB Guidance On QM Interest Rate Calculation

Staff and members of the Mortgage Bankers Association met with the CFPB in recent weeks to discuss how to determine the “interest rate without any discount” that is used to calculate the starting point at which bona fide discount points can be used to reduce the rate and are eligible for exclusion from the qualified mortgage’s points-and-fees cap. Specifically, MBA asked if the interest rate to be used is the rate unique to each consumer or is simply a rate from a standard rate sheet. The trade group also wanted to know what the... Read More

Industry Reps Receive CFPB Input On Applying ECOA Appraisal Rule

Representatives of the American Bankers Association and the Mortgage Bankers Association recently met with the CFPB to discuss the applicability of the Equal Credit Opportunity Act appraisal rule to certain business purpose loans secured by multifamily dwellings or inventories of homes. According to the industry’s account of the discussions, CFPB staff stated that while the ECOA appraisal rule is applicable to personal and business purpose applications for credit, the rule is intended to exclude applications for credit involving... Read More

Bureau Warns Employers Against Forcing the Use of Payroll Cards

The CFPB recently put out a bulletin warning employers that they cannot require their employees to receive wages on a payroll card. The bureau said it has received reports of employers, particularly in the retail and food service industries, distributing wages solely through payroll cards. However, the bureau said federal law prohibits employers from mandating that employees receive wages exclusively on a payroll card. Further, some employees receiving wages on employer-sponsored payroll cards have complained to the CFPB about... Read More

Worth Noting/This-’n-That/Looking Ahead

CFPB Deploys a New Online HMDA Tool. Last week, the CFPB launched an online tool to provide consumers with easy access to public mortgage information collected under the Home Mortgage Disclosure Act. “The tool enables greater transparency by helping inform people of trends in their local mortgage markets,” the bureau said. You can check it out at http://www.consumerfinance.gov/hmda/. Auto Dealers Push Back Against CFPB Criticism. The National Automobile Dealers Association is rejecting recent CFPB criticism of dealer discretion when it... Read More

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