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Inside the CFPB

June 9, 2014

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CFPB Slaps RealtySouth With $500,000 RESPA Civil Penalty

In its largest settlement under the Real Estate Settlement Procedures Act against a company that is not a mortgage insurer, the CFPB ordered Alabama real estate company RealtySouth to pay a $500,000 civil penalty to settle claims it gave inadequate disclosures of its relationship with an affiliated title insurance company. The practices identified by the CFPB’s investigation illegally benefited TitleSouth, an affiliated company owned by the same holding company that owns RealtySouth, according to the bureau, and left consumers unaware of their rights to choose service providers during the home-buying process. “RealtySouth’s preprinted form purchase contracts, which its agents provided to homebuyers preparing to make an offer on a home, either explicitly directed... Read More

CFPB Focused on Holding Student Loan Servicers Accountable

Rohit Chopra, the CFPB’s student loan ombudsman, appeared before the Senate Budget Committee last week and indicated the bureau remains intent on holding student loan servicers to account for their treatment of struggling borrowers. “Like many of the improper and unnecessary foreclosures experienced by many homeowners, I am concerned that inadequate servicing has contributed to America’s growing student loan default problem, now topping 7 million Americans in default on over $100 billion in balances,” Chopra said. “To ensure that we do not see a repeat of the breakdowns and chaos in the mortgage servicing market, it will be... Read More

CFPB Would Play Extensive Role in Bill on Campus-Sponsored Lending

Rep. Maxine Waters, D-CA, the ranking member of the House Financial Services Committee, is among those leading a legislative push by House and Senate Democrats to protect college students from what they see as unfair banking practices involving campus-sponsored financial products. The legislation would extensively rely upon the CFPB to help accomplish lawmakers’ objectives in this regard. The House bill, entitled the Curbing Abusive Marketing Practices with University Student Debit Cards Act (otherwise known as the CAMPUS Debit Cards Act), would end... Read More

Democrats Want CFPB to Crack Down on ‘Predatory’ Payday Loans

A handful of Democrat Senators are urging CFPB Director Richard Cordray to bring an end to what they consider to be predatory small-dollar storefront and online payday lending. “Sadly, the evidence shows that these loans trap consumers in a cycle of debt in which consumers end up owing more than the initial loan amount, an appalling practice that exploits the financial hardship of hard working families and exhibits a deeply flawed business model that does not consider borrowers’ ability to repay the loan,” the senators said in a letter to the director. “The CFPB was established... Read More

House Committee Postpones Markup on CFPB Legislation

As last month drew to a close, the leadership of the House Financial Services Committee decided to postpone a May 29 markup of a number of pending bills, including six related to the CFPB, after the death of the mother of Rep. Maxine Waters, D-CA, the ranking member of the committee. The markup has been rescheduled for Tuesday, June 10, the committee announced late last week. Among the CFPB-related bills pending before the committee is... Read More

Mortgage Lenders Express Support For Proposed QM ‘Right to Cure’

Organizations representing different segments of the mortgage lending industry generally strongly support the overall thrust of the CFPB’s proposed amendments to its 2013 mortgage rules that would enable a limited “right to cure” a “qualified mortgage” that inadvertently falls outside the points-and-fees cap. The 120-day cure period would only be available if the creditor originated the loan as a QM loan in good faith, the loan otherwise meets the QM requirements, and the creditor or assignee maintains and follows policies and procedures for post-consummation review and refunding of overages. “The proposed cure period for points and fees overages would be... Read More

Auto Finance ‘Larger Participant’ Rule in the Works, CFPB Confirms

The CFPB officially made it clear again that it will propose a rule to define “larger participants of a market for auto lending,” according to the agency’s recently updated semi-annual rulemaking agenda. The bureau is also now in the process of finalizing a rule defining larger participants in the international money transfer market, after having previously defined larger participants in the consumer debt collection, credit reporting and student loan servicing markets. Elsewhere, the CFPB is... Read More

CFPB Continues Efforts Toward HMDA Rule, Latest Agenda Shows

The CFPB recently convened a small business review panel as per the Small Business Regulatory Enforcement Fairness Act of 1996 to discuss potential amendments to the Home Mortgage Disclosure Act, Kelly Thompson Cochran, acting assistant director for regulations at the CFPB, said in a recent blog posting. The amendments made by the Dodd-Frank Act expand the scope of information relating to mortgage applications and loans that must be compiled, maintained and reported under HMDA, including the ages of loan applicants and mortgagors, information relating to the points and fees payable at origination, and the difference between the annual percentage rate associated with the loan and benchmark rates for all loans. Other new inclusions are... Read More

CFPB Seeks OMB Approval to Conduct Credit Card Survey

The CFPB intends to conduct a national telephone survey of 1,000 credit card holders and is seeking additional public comment and eventual approval from the Office of Management and Budget, according to a recent notice in the Federal Register. This survey follows an earlier effort last summer along similar lines. Both are... Read More

Another Disparate Impact Case Come to SCOTUS; Will CFPB Opine?

Disparate impact litigation apparently is one of those gifts that keeps on giving. Once again, the Supreme Court has been given an opportunity to receive one of those gifts, as the Texas Department of Housing and Community Affairs recently asked the justice to agree for what would be the third time to take on the issue of disparate impact claims brought under the Fair Housing Act. CFPB observers will be watching to see if the bureau feels compelled to weigh in on the case, Texas Department of Housing and Community Affairs, et al., Petitioners v. The Inclusive Communities Project, Inc., as it has previously elsewhere. The TDHCA distributes... Read More

OIG Auditing CFPB Headquarters Budget as Per Rep. McHenry

The Federal Reserve Office of Inspector General has begun an evaluation of the CFPB’s controversial headquarters renovation budget in response to a request from Rep. Patrick McHenry, R-NC, chairman of the House Financial Services Subcommittee on Oversight and Investigations, the OIG revealed in its semi-annual report to Congress. “To address this congressional request, our objectives are to evaluate, with respect to the CFPB’s headquarters renovation project, (1) the capital budgeting and approval process, (2) the scope and justification for cost estimates, and (3) the use of competitive procedures,” the OIG said. It expects... Read More

Looking Ahead

Director Cordray to Deliver Report to Senate Banking. CFPB Director Richard Cordray is scheduled to deliver his agency’s semi-annual report to the Senate Banking, Housing and Urban Affairs Committee on Tuesday, June 10, 2014. Cordray is the only person scheduled to appear before the committee during this event. His remarks will be posted on the committee’s website the day of the hearing, which will also be available for viewing live online. Look for coverage of the event in the next issue of Inside the CFPB. Bureau Plans Public Field Hearing on Mobile Financial Services. The CFPB plans... Read More

Comments Due

Comments are due Monday, June 9, 2014, on the joint notice of proposed rulemaking, Minimum Requirements for Appraisal Management Companies, issued... Read More

Jumping The Snark

How Not to Run a Website. The “links” section of the website of the Senate Banking, Housing and Urban Affairs Committee is so outdated, not only does it not have a link to the CFPB, arguably the majority’s favorite regulatory agency, it also has links to the Federal Housing Finance Board and the Office of Federal Housing Enterprise Oversight. Both of those agencies were subsumed and replaced by the Federal Housing Finance Agency back in 2008. Not surprisingly, there also is no link on the committee’s website to the FHFA’s website. Meanwhile, neither fhfb.gov nor ofheo.gov have... Read More

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