CFPB – Page 2 – Consumer Financial Services Watch

Senate Joins House in Resolution Overturning CFPB Arbitration Rule; President Trump Is Likely to Sign

Oct 27 2017

By Andrew C. Glass, Robert W. Sparkes III, Roger L. Smerage, Elma Delic

After weeks of speculation, the U.S. Senate voted on Tuesday night to join the House of Representatives in passing a Congressional Review Act (“CRA”) resolution to nullify the Consumer Financial Protection Bureau’s (“CFPB”) recent arbitration agreements rule. The Senate vote split 50-50, with two Republican senators—Senators Lindsey Graham (SC) and John Kennedy (LA)—voting against the resolution. The split vote set the stage for Vice President Mike Pence to cast the tie-breaking vote in favor of the resolution, which is now headed to President Trump’s desk for signature. In the hours after the vote, the President released a statement indicating his support for the resolution.

With Senate on the Sidelines So Far, Financial Services Trade Groups Launch Challenge to CFPB Arbitration Rule

Oct 06 2017

By Andrew C. Glass, Robert W. Sparkes III, and Roger L. Smerage

More than two months after its promulgation, the fate of the Consumer Financial Protection Bureau (CFPB) arbitration agreements rule remains uncertain. The Senate may ultimately join the House and invoke the Congressional Review Act (CRA) to nullify the CFPB rule. But several financial services trade groups are not waiting to find out and have commenced their own legal challenge to the rule. On Friday, September 29, 2017, over a dozen such groups—led by the Chamber of Commerce of the United States of America—filed suit against the CFPB, and its director Richard Cordray, in U.S. District Court for the Northern District of Texas. See Complaint for Declaratory and Injunctive Relief, Chamber of Commerce of the United States of America, et al. v. Consumer Financial Protection Bureau, et al., No. 3:17-cv-02670-D (N.D. Tex. Sept. 29, 2017).

Marketplace Lender Seeking Fair Lending Guidance Receives CFPB’s First No-Action Letter

Sep 28 2017

By David D. Christensen, Jennifer Janeira Nagle, and Brandon R. Dillman

The Consumer Financial Protection Bureau (“CFPB”) recently issued its first letter pursuant to a no-action letter policy launched in February 2016. The CFPB developed the policy to encourage innovation in the fintech marketplace by creating a testing ground for new technologies and consumer lending methods, particularly where the applicability or impact of existing regulations is uncertain. To take advantage of the policy, a company must submit an application describing the product, method, or service at issue and identify the specific rules and regulations for which the company seeks guidance. If the application is approved, a no-action letter is issued indicating that the CFPB “has no present intention to recommend initiation of an enforcement or supervisory action” against the applicant with respect to the specific product, method, or service and regulatory concerns covered by the company’s application.

Final 2017 TRID Rule Does Little To Ease Liability Concerns; Proposed Legislation Already In The Works To Address Shortcomings

Sep 14 2017

By: Jennifer Janeira Nagle

Nearly two years after the TILA-RESPA Integrated Disclosure (“TRID”) rule went into effect (on October 3, 2015) and one year after the Consumer Financial Protection Bureau (“CFPB”) closed a comment period on a Notice of Proposed Rulemaking (“NPRM”) to adjust and clarify the rule, the CFPB’s modified TRID rule was published in the Federal Register on August 11, 2017 (the “2017 TRID Rule” or “2017 Rule”). An accompanying Detailed Summary of Changes and Clarifications was released on August 30, 2017.

CFPB Promulgates, House Seeks to Repeal, Final Arbitration Agreements Rule

Aug 02 2017

By Andrew Glass and Roger Smerage

Recently, the Consumer Financial Protection Bureau (CFPB) promulgated its final arbitration agreement rule. The rule comes more than 11,000 comments, 13 months, and one change in presidential administration after the CFPB issued its proposed rule in May 2016. (K&L Gates previously reported on the issuance of the proposed rule here.) Yet despite its long history, Congress began taking steps to repeal the rule almost immediately.

“Survey Says”: CFPB Report Provides Further Insight Into Forthcoming Debt Collection Regulations

Jan 24 2017

By Andrew C. Glass, Brian M. Forbes, Gregory N. Blase, Roger L. Smerage, and Hollee M. Watson

The Consumer Financial Protection Bureau (“CFPB”) recently released a report detailing the results of a first-of-its-kind survey on consumer experiences with debt and debt collection. The CFPB conducted the survey in connection with its ongoing effort to promulgate the first-ever federal debt collection regulations. The agency sent the survey to nearly 11,000 consumers, of whom only a little over 2,000 (just less than 20%, roughly) responded. The CFPB explained that “[t]o ensure that the survey included a sufficient number of responses from consumers who had experienced debt collection,” it targeted consumers with recent debt collection experiences at a higher rate than other consumers. Of the approximately 20% of consumers who responded to the survey, 30% were consumers with long-term debt whereas only 15% were respondents with more recent debt. The survey was comprised of 67 questions ranging from the consumers’ general financial experiences and preferences for the ways in which collectors could contact them to questions about specific debt collection attempts in the year preceding the survey (which was conducted between December 2014 and March 2015). The latter category inquired about the types of debt in collection, the manner and frequency of contacts, whether there were any erroneous attempts to collect a debt, and whether the consumer paid the debt after being contacted. Notably, the CFPB did not release the results for all 67 questions.

Down But Not Out: The CFPB’s Future May Be Uncertain, But Industry Participants Must Remain Vigilant

Dec 29 2016

By Daniel F. C. Crowley, Soyong Cho, Jennifer Janeira Nagle, Roger L. Smerage, Jeremy M. McLaughlin, Mark A. Roszak, and Brandon R. Dillman

Since its inception, the Consumer Financial Protection Bureau (“CFPB”) has been a lightning rod, and there is little dispute that recent events threaten, at a minimum, the current operational structure of the CFPB and possibly its future existence. Specifically, the constitutionality of the CFPB has been under direct judicial attack and President-elect Trump’s incoming administration, and legislative reform that may follow, threatens to make good on Mr. Trump’s plan to “dismantle the Dodd-Frank Act,” which created the CFPB, “and replace it with new policies to encourage economic growth and job creation.” In the aftermath of these developments, there has been no shortage of predictions on the CFPB’s future and some predictions allude to a near certain doomsday for the agency. But many may have rushed to judgment. While the continued existence of the CFPB is certainly an open question, it is more likely that the CFPB will receive a makeover, not a shutdown.

To read the full alert, click here.

The Post-Election FinTech World: Are Happy Days (for Bankers) Here Again?

Dec 02 2016

By Judith E. Rinearson and Eric A. Love

In the days following the U.S. federal elections that resulted in the election of Donald Trump as President and Republican control of the 115th Congress, FinTech companies, banks, and other financial institutions are increasingly asking whether they still need to worry about compliance with the landmark Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), Consumer Financial Protection Bureau (“CFPB”) regulatory actions, and other financial services regulations.

It is true that there will likely be some significant regulatory changes, but it is a little too early for industry participants to pop the champagne corks.

To see are our thoughts about some of the top issues impacting FinTech companies, banks and other financial institutions, click here.

“Not A Close Call”: The D.C. Circuit Restores The Safe Harbor To Section 8 of RESPA

Oct 12 2016

By Irene C. Freidel

Noting that “[t]he basic statutory question in this case is not a close call,” the D.C. Circuit has held that a bona fide payment by one settlement service provider to another does not violate Section 8(a) of the Real Estate Settlement Procedures Act (RESPA) if the payment is reasonably related to the market value of the goods, services, or facilities provided. See PHH Corp. v. Consumer Financial Protection Bureau (D.C. Cir. Oct. 11, 2016). The court’s conclusion was mandated by the unambiguous text of Section 8(c) of RESPA, along with the U.S. Department of Housing and Urban Development’s (HUD’s) long-standing interpretations of the same statutory provision.

To read the full alert, click here.

Change Order: The CFPB Previews Its Proposed FDCPA Regulations

Aug 10 2016

By Andrew C. Glass, Brian M. Forbes, Gregory N. Blase, and Roger L. Smerage

The Consumer Financial Protection Bureau (“CFPB”) recently took the next step toward promulgating regulations under the Fair Debt Collection Practices Act (“FDCPA”) by releasing its “Outline of Proposals under Consideration and Alternatives Considered” (the “Outline”). The Outline sheds light on the approach the CFPB may take in regulating the debt-collection industry. As detailed in this alert, the proposed approach would implement comprehensive and substantial changes.

To read the full alert, click here.

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