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Inside the CFPB

July 13, 2015

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CFPB Warns Credit Card Issuers in $186M Settlement With Chase

The CFPB rang the credit card industry’s bell last week, compelling JPMorgan Chase to refund at least $50 million to consumers and to pay $136 million in penalties and payments to settle an enforcement action related to allegations of selling bad debt and robo-signing documents. The lender also must pay a $30 million penalty to the Office of the Comptroller of the Currency in a related action. According to CFPB officials and attorneys general from 47 states and the District of Columbia, who collaborated in bringing the action, Chase sold credit card accounts to debt buyers that included amounts that were inaccurate, settled, discharged in bankruptcy, not owed, or otherwise not collectible. Debt buyers then sought to collect the faulty ... Read More

Despite Extension, Mortgage Lenders Ask for More TRID Relief

Mortgage lenders told the CFPB they support the bureau’s recent proposal to extend the effective date of its integrated disclosure rule to Oct. 3, but urged the agency to do yet more to help the industry cope. The Mortgage Bankers Association, for example, in its comment letter said the so-called TRID rule –promulgated under the Truth in Lending Act and the Real Estate Settlement Procedures Act – when finally implemented “will make the mortgage process considerably more understandable and navigable for consumers, an objective we have long shared.” However, “experience has shown that the TRID rule is far more complicated and wide ranging than any other rule previously issued by the CFPB,” the trade group added. “It is causing significant implementation ... Read More

Industry Lobbying Efforts Continue For ‘Hold Harmless’ TRID Relief

The mortgage lending industry, fresh off a successful appeal to the CFPB for an extension of the effective date of the pending integrated disclosure rule, has secured the introduction of another piece of legislation in the U.S. Congress that would provide lenders a “hold harmless” enforcement period under the new rule. S. 1711, a bipartisan bill sponsored by Sens. Tim Scott, R-SC, Joe Donnelly, D-IN, and others, would provide for a temporary safe harbor from the enforcement of the rule, from the effective date through Dec. 31, 2015, providing lenders are making good-faith efforts to comply with the rule. The measure is identical to H.R. 2213 introduced in May by Reps. Steve Pearce, R-NM, and Brad Sherman, D-CA. “This bill ... Read More

TRID a Once-in-a-Generation Game-Changer, Industry Reps Say

The CFPB’s integrated disclosure rule under the Truth in Lending Act and Real Estate Settlement Procedures Act – dubbed TRID – is a “once in a generation transformational event for the industry,” according to Franklin Codel, executive vice president of Wells Fargo Mortgage. Even with the recently extended effective date of Oct. 3, 2015, TRID was still at the forefront of topics at a real estate conference in Miami in late June. The pending rule prompted a discussion by panelists who emphasized the magnitude of the upcoming changes. Codel said he thinks the industry is prepared but said it’s going to require strong cooperation among lenders, real estate professionals, settlement agents and consumers to get this right. “Many of the things that ... Read More

What About Waiving TRID’s Seven-Day Waiting Period?

Mortgage industry consultants at Lenders Compliance Group have received some client questions lately having to do with the seven-day waiting period under the CFPB’s integrated disclosure rule. “We know about the seven-day waiting period requirement between providing the initial disclosures and consummation,” according to a new TRID-related blog from Lenders Compliance Group that summarizes the concerns. “We need to know what criteria to use in order to determine if the consumer may waive the waiting period based on a personal emergency. And if a consumer can waive the waiting period, how is this done?” Jonathan Foxx, president and managing director at the consultancy, replied that, “For a closed-end credit transaction that is secured by the consumer’s dwelling and subject to ... Read More

CFPB Cracks Down on Credit Card Vendors Over Add-On Products

The CFPB recently took action against some credit card add-on product vendors – Affinion Group Holdings and its affiliated companies, and Intersections Inc. – accusing the companies of charging consumers for credit card add-on benefits they did not receive. When it comes to Affinion, the CFPB alleges that from about July 2010 through August 2012, the company enrolled consumers in add-on products that claimed to provide consumers with credit monitoring, credit report retrieval, or both. Consumers generally paid between $6.95 and $15.99 per month for these products, which were typically billed directly to their credit cards or deposit accounts. However, the bureau alleges that Affinion or its partner banks billed full product fees to at least 73,000 accounts while failing to provide ... Read More

Military Still Face Roadblocks From Student Loan Servicers, CFPB Says

U.S. military personnel are still having to deal with problems and challenges when they contact student loan servicers to invoke the military rights and protections earned through their service, according to a recently released report from the CFPB. Among the problems cited in the report are continued mistakes handling service members’ student loan repayments, resulting in improper denials of legal benefits, negative credit reporting, and shoddy follow-through on legal protections for military families. Complaints also include frustrations from grieving parents seeking to discharge a co-signed loan following the death of their child. Specifically, the report found that service members continue to report difficulties in obtaining the Servicemembers Civil Relief Act interest rate cap of 6 percent, despite action by federal ... Read More

Dems Want HMDA-Like Rules for Small Biz Loan Data Disclosure

Nearly two dozen Democrats in the U.S. Senate are asking CFPB Director Richard Cordray to speed up a Dodd-Frank Act rulemaking to require lenders to report small business loan data similar to mortgage loans under the Home Mortgage Disclosure Act.“You have acknowledged that the collection and disclosure of small business lending data would be similar in theory and practice to the collection and disclosure of mortgage credit data under HMDA. As the agency moves to finalize the HMDA rule, we believe that now is the time for it to initiate its Regulation B rulemaking,” said the letter to Cordray, written by Democrats led by Sen. Cory Booker, D-NJ. Citing the nearly 28 million small businesses in the U.S., the ... Read More

Vitter Calls for Probe into CFPB’s Analysis of Its Effects on Small Biz

Sen. David Vitter, R-LA, chairman of the Senate Committee on Small Business and Entrepreneurship, has called into question “the adequacy and thoroughness of the CFPB’s analysis of small entity impacts” as a part of its payday lending rulemaking process and requested the Government Accountability Office to investigate the issue and release its findings. Among the issues the senator raised was whether the selection of small entity representatives is conducted in a way that guarantees adequate input from a reasonable distribution and representation of small entities that would likely be affected by the bureau’s proposed regulation currently under consideration. Vitter also wanted to know if the materials that are distributed to SERs are adequate for them to provide constructive input for ... Read More

Bureau Puts Out Guiding Principles For Faster Payment Networks

The CFPB recently issued some guiding principles for protecting consumers as the private sector develops new faster payment systems that are aimed at reducing “pocket-to-pocket” payment times between consumers, businesses or other entities. The bureau said it wants to ensure any new payment systems are “secure, transparent, accessible, and affordable to consumers. The systems should also have robust protections when it comes to fraud and error resolution,” the agency said. While American consumers benefit from and make use of these payment systems, there remain opportunities to improve efficiency, reduce transaction costs for consumers, and lessen credit and fraud risks, according to the agency. “There is also greater opportunity for consumers to have real-time information about their account balances so they ... Read More

Consumer Loan Complaints Jump, Overall Gripes Holding Steady

Overall consumer complaints filed with the CFPB remained generally flat in the second quarter and year-over-year as of the six-month mark. But gripes about consumer loan related issues leapt 64.6 percent YOY, despite a 9.8 percent drop in the second quarter, according to the latest analysis by Inside the CFPB. The money transfer sector also showed a poor performance over both time periods tracked by Inside the CFPB, as consumer grumbling rose 18.7 percent YOY and 23.6 percent MOM. Complaints about credit cards also were up, but not as much: 12.9 percent as of the six-month period vis-à-vis last year, and a slight 2.3 percent during the second quarter of 2015. But the residential mortgage sector again did quite well ... Read More

Briefs/Get Your TRID On/Calendar

FDIC Issues Updated Exam Procedures for TRID. The FDIC recently published revised interagency examination procedures for the new Truth in Lending Act /Real Estate Settlement Procedures Act integrated disclosures rule (TRID) in an effort to help its supervisory charges better cope with the new regulatory regime. The new guidance also addresses some issues related to the bureau’s mortgage servicing rules, providing an alternative definition of the term “small servicer” for certain nonprofit entities.It also deals with aspects of the ability-to-repay rule with its qualified mortgage standard. “The examination procedures should be helpful to financial institutions seeking to better understand the areas on which the FDIC will focus as part of the examination process,” the agency said in a recent ... Read More

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