Now that the CFPB has a director, it can officially begin to exercise the full authorities granted to it under the Dodd-Frank Act. The agency issued a press release on Thursday announcing the formal launch of its nonbank supervision program. Read More
As supervisor of large depository institutions, credit unions, and their affiliates, the CFPB expects such supervised institutions to share with it all documents that CFPB requests, even if the document is protected by the attorney-client privilege. Banks routinely share privileged documents with their banking regulators without concern about facing a claim of waiver because of two statutory provisions (one for banks and another for credit unions) that say submitting privileged information to a prudential regulator does not result in a waiver as to any other person or entity. But those statutory provisions have not been amended to encompass information provided to the CFPB. Read More
By: David A. Tallman
Adding to its already full plate, the Bureau of Consumer Financial Protection (the “CFPB” or the “Bureau”) recently requested public comment on its review of the various consumer financial protection regulations it has inherited from other agencies. The request signals that the Bureau does not intend for its higher-profile mortgage finance initiatives to overshadow its mandate to update, modify (or even eliminate) outdated, unduly burdensome, or unnecessary existing regulations. It also suggests that the CFPB is contemplating that its initial review of the inherited regulations may extend beyond mere technical corrections to more significant substantive changes.
While the CFPB took over rulemaking and enforcement authority for RESPA on July 21, 2011, that transfer of authority will soon be reflected in RESPA regulations. On December 20, 2011, the CFPB published an interim final rule in the Federal Register to republish, effective December 30, 2011, HUD’s Regulation X, which implements RESPA. These republished regulations are substantively the same as the current RESPA regulations, but the CFPB makes certain non-substantive, technical, formatting, and stylistic changes to the regulations. The CFPB will accept public comments on the interim final rule until February 21, 2012. Read More
When HUD transferred RESPA enforcement authority to the CFPB, some RESPA investigations that had been initiated at HUD may have been assigned to the new agency. As a result, some companies may not be out of the woods just yet.
Approximately 10 former HUD RESPA Enforcement Division staffers and counsel transferred to the new CFPB on July 21st, including RESPA Enforcement Division Director Bart Shapiro. About five of those employees ended up being reassigned to the CFPB’s Enforcement Division. Last spring the HUD Unit was busy trying to resolve dozens of RESPA investigations before they turned out the RESPA enforcement lights at HUD. Read More
On December 1, 2011, the Consumer Financial Protection Bureau began accepting mortgage complaints from consumers through the agency’s home page. This development follows the Bureau’s October announcement that it would be expanding the coverage of its consumer complaint portal to include products such as mortgages and student loans. Consumers have been able to submit credit card complaints through the Bureau’s web site since last July. Read More
When servicemembers are discussed in relation to the consumer credit industry, the discussion usually centers on the protections to military homeowners and credit card holders under the Servicemembers Civil Relief Act (“SCRA”). While SCRA remains a concern of the Consumer Financial Protection Bureau (“CFPB” or “Bureau”), recently the Office of Servicemember Affairs has been taking aim at a more unlikely target: student loans. The CFPB is looking into the recruiting practices of for-profit colleges to determine if for-profit colleges are exploiting servicemembers in order to evade a federal financial aid rule.
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By: Andrew Caplan* and Stephanie C. Robinson
*Mr. Caplan is not yet admitted to practice; admission to the NY Bar pending.
The Dodd-Frank Act gives the CFPB exclusive supervisory authority and primary enforcement authority of federal consumer financial protection laws over depository institutions with total assets greater than $10 billion and their affiliates (“Large Institutions”). Under Dodd-Frank, the federal banking agencies maintain supervisory and enforcement authority over other institutions with respect to federal consumer financial protection laws. On November 17, 2011, the federal banking agencies and the CFPB issued a joint supervisory statement delineating how and when these Agencies will determine the total assets of an insured depository institution or an insured credit union for purposes of their supervisory and enforcement responsibilities. This is because sections 1025 and 1026 Dodd-Frank, which establish the basic threshold regarding who will regulate whom, do not specify how and when an institution’s assets are assessed for purposes of determining “Large Institution” status. That task was left to the Agencies themselves to determine.
It is no secret that the CFPB is taking great interest in consumers’ complaints about credit cards. From day one, a “submit a credit card complaint” icon has held a prominent position on the agency’s home page, and CFPB representatives have talked about how credit card offers and terms are sometimes too complicated for consumers to understand.
On November 7, the Consumer Financial Protection Bureau unveiled a process designed to warn individuals and companies of possible enforcement actions against them. At its discretion, the Bureau may provide an Early Warning Notice and an opportunity to respond before deciding whether to pursue an enforcement action. This process is not required by law, however, and the CFPB may decide not to provide notice in certain cases, such as when the Bureau’s Office of Enforcement believes that prompt action is necessary. Read More
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