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Inside the CFPB

May 14, 2018

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RESPA Clock Effectively Wound Back to Pre-CFPB State

PHH Corp. decided not to appeal to the U.S. Supreme Court a lower court ruling that effectively overturned the CFPB’s controversial interpretation of the Real Estate Settlement Procedures Act under former Director Richard Cordray. The lender’s lawsuit also unsuccessfully challenged the constitutionality of the CFPB. In January, the en banc panel of the U.S. Court of Appeals for the District of Columbia Circuit sided with PHH on the RESPA components of the dispute, invalidating ... Read More

An Influx of Political Appointees May Marginalize Career Staffers

Although there are fewer than two months left for Mick Mulvaney as the CFPB’s interim director, he continues to bring in his people to key positions in almost all divisions of the bureau, potentially weakening the role of career staffers. It is the first time that the consumer agency has experienced a political transition, and the new leadership appears to have adopted a dramatically different approach on how to treat consumers and the industry. To help reset the new political agenda at the ... Read More

Mulvaney Makes Major Changes To Student Protection Unit

Acting CFPB Director Mick Mulvaney announced last week that he plans to restructure an office that aims to help student loan borrowers. Many consumer advocates worried that the change will strip the office of all functions except for consumer education. In a memo obtained by Inside the CFPB, Mulvaney announced to all staffers that the Office of Students and Young Consumers will be folded into the Office of Financial Education. Both offices are part of the bureau’s Consumer Education ... Read More

Mulvaney Considers Moving CFPB Staff to Basement to Cut Costs

Acting CFPB Director Mick Mulvaney, a vociferous critic of the consumer agency’s budget, is reportedly looking for ways to cut spending by tens of millions of dollars, including an option to move dozens of employees to the basement of its Washington headquarters. According to an internal cost-saving analysis obtained by Bloomberg News, Mulvaney’s top aides proposed to add 70 work spaces in the CFPB main building’s basement, which may save $16.6 million. Other ... Read More

Survey Shows Lenders Lukewarm About Disrupting QM Regulation

Mortgage lenders spent a considerable amount of money implementing the qualified-mortgage rule, and many are not keen about a major overhaul, according to a survey by Strategic Mortgage Finance Group. Some 54 percent of 122 respondents to the survey favored no or only modest changes to QM rules. There was little variation between banks and independents, or large and small lenders. However, lender attitudes on regulatory change vary significantly with the size of ... Read More

House Votes to Kill Auto Lending Guidance, Payday May Survive

The House last week voted to kill the CFPB’s auto lending guidance, but the chances of a similar override of the bureau’s payday rule are fading, attorneys said. In a 234-175 vote, the House repealed Obama-era CFPB guidance on indirect auto lending that subjected auto dealers and others to liability for discriminatory price markups. The Senate passed the Congressional Review Act resolution last month, and President Trump is expected to sign the rollback. Congress used the CRA ... Read More

Democratic AGs to Rely More on Their Own Investigative Powers

Democratic state attorneys general urged the CFPB not to back away from its investigative powers but promised to fill the gap if the federal agency does so. A group of 16 Democratic state AGs led by California’s Xavier Becerra recently sent a letter in response to the CFPB’s request for information on civil investigative demands. In the letter, they opposed any efforts to curtail the CFPB’s civil investigative demand authority. “As our state’s chief law enforcement officers ... Read More

Rulemaking Agenda Suggests A Restrained Role for CFPB

The CFPB made significant changes to its rulemaking agenda in 2018, signaling a weakening role for the bureau in the financial services market. The agency released its spring 2018 rulemaking agenda last week. Noting that it’s under interim leadership pending the appointment and confirmation of a permanent director, the bureau said it is prioritizing meeting specific statutory responsibilities, continuing “selected rulemakings that were already underway,” and reconsidering ... Read More

Democrats and Ethics Group Call For Investigation into Mulvaney

A group of Democratic senators is asking the U.S. Office of Special Counsel to investigate whether Acting CFPB Director Mick Mulvaney violated the Hatch Act. The acting director last month said to bankers that he “had a hierarchy” in his office in Congress and only talked to lobbyists who gave him financial donations when he was a member of the House of Representatives from South Carolina. “It raises troubling questions about whether his statements ran afoul of the Hatch Act ... Read More

Industry Wants Less Adjudication, While Consumer Groups Want More

In response to the CFPB’s second request for information on adjudication proceedings, industry groups want more cautious and fair adjudications, while consumer advocates oppose any scale-back of enforcement through adjudications. The 2010 Dodd-Frank Act, which created the CFPB, allows the bureau to enforce consumer financial protection laws through two different means. One is to file an action in U.S. district court, and the other is to initiate an adjudication proceeding ... Read More

Other News in Brief: Reg Relief Bill; Permanent Director; Enforcement Against Nationstar; Richard Cordray

The House Could Vote on the Reg Relief Bill By Memorial Day. House Speaker Paul Ryan, R-WI, last week said the House will take up S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act, as currently written and free from amendment. “We’ve got an agreement to be moving different pieces of legislation,” Ryan said. “So, we will be moving [S. 2155]. We’re also going to be moving in the Senate a package of bills that we think [Includes four briefs] ... Read More

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