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Recent activity in Congress suggests that the return from the July 4th recess will see a continued push to reform the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”) before year’s end. This alert provides an overview of the current state of play and the most likely outcome.
By: Andrew C. Glass, Robert W. Sparkes, Roger L. Smerage
In the wake of the Great Recession, numerous federal government actors have sought to limit, and in some cases, eliminate, the inclusion of pre-dispute arbitration agreements in consumer financial services contracts. For instance, in 2010, as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), Congress amended the federal Truth-in-Lending Act to prohibit the use of pre-dispute arbitration provisions in residential mortgage contracts and home-equity line-of-credit agreements. See 15 U.S.C. § 1639c(e)(1). Now, acting pursuant to a mandate provided by the Dodd-Frank Act, see 12 U.S.C. § 5518(a), the Consumer Financial Protection Bureau (“CFPB”) has joined the hunt. On March 9, 2015, the CFPB issued a report to Congress that appears to put the use of such agreements in all consumer financial services agreements – including credit card, checking account, and payday loan agreements – in the agency’s cross-hairs.
By: David A. Tallman, Andrew L. Caplan
It is increasingly common for employers to request that job applicants and employees divulge the passwords to their Facebook accounts and to other social media sites. This trend has not gone unnoticed by the media and privacy advocates, which view this practice as an intrusive violation of individual privacy. On the other hand, employers often have valid reasons to exercise oversight over social media activities, especially in financial services and other highly regulated industries where employees’ activities may be more likely to cause the company to incur liability. Read More
On Friday, the CFPB launched a new online portal through which the public can submit comments on ongoing efforts to streamline inherited regulations. The move continues the Bureau’s trend of using its website to promote a more interactive and responsive regulatory feel. Over the past few months, the site has hosted dialogs between the Bureau, industry representatives, and consumers as part of Know Before You Owe Campaigns that have targeted disclosures related to mortgages, credit cards, and student loans. CFPB has also positioned its site as its preferred method for receiving and resolving complaints about consumers’ mortgages or credit cards. Indeed, the complaint portals remain the most prominent feature of the CFPB homepage. Read More
The CFPB, which has regularly reached out to consumers online through its blog posts and its consumer complaint portal, is also seeking consumer input the old-fashioned way – in person. On October 26, Raj Date, Special Advisor to the Secretary of the Treasury for the CFPB, who previously spoke with consumers in Philadelphia, will be headed to Minneapolis, Minnesota to discuss the Bureau’s upcoming initiatives directly with consumers. The Bureau has plans on holding more events aimed at consumers throughout the country in the upcoming months.
By: Kris D. Kully
The CSBS/AARMR Multistate Mortgage Committee (MMC) released a set of examiner guidelines to assist state regulators in implementing the Federal Reserve Boards loan originator compensation restrictions. Unfortunately, those guidelines provide very little guidance for examiners in determining whether state-regulated mortgage lenders or brokers have complied with those restrictions, or for the lenders or brokers seeking to comply. Like the children’s game of Hot Potato, the Federal Reserve Board issued the rulemaking, and then handed it over to the Consumer Financial Protection Bureau, but so far has left interpretation and/or enforcement of the rule to other federal and state agencies. While there are many significant questions that remain in understanding and implementing the loan originator compensation restrictions, the new state CSBS/AARMR examination guidelines do not (and cannot really be expected to) provide those answers. This client alert highlights certain aspects of the guidelines and describes the limited take-aways provided for state-regulated mortgage lenders, brokers, and loan originators.
To view the complete alert online, click here.
In the months ahead, the CFPB will 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 a portal on the CFPB web site since July 21st. In addition to providing a consumer portal through which consumers can submit and check on the status of their complaints, the CFPB now provides a company portal through which companies can view and respond to consumer complaints. The CFPB recently met with industry representatives to show them how the new system works. Read More
Richard Cordray’s nomination to become the director of the Consumer Financial Protection Bureau will be in the hands of the full Senate now that the Senate Banking Committee has approved his nomination along a 12-10 party-line vote. But will the CFPB ever have an official leader in place? Not at this rate.
It has been fourteen months since Congress passed the Dodd-Frank Act, and the new government agency still has no formal leader. Read More
By: Melanie Hibbs Brody, Paul F. Hancock, David G. McDonough, Jr., Stephanie C. Robinson
The powerful new Consumer Financial Protection Bureau (the “Bureau” or “CFPB”) is up and running, and is expected to soon begin investigating and prosecuting claims against covered persons under the Consumer Financial Protection Act (the “CFPA” or “Act”).
To this end, on July 28, 2011, the Bureau issued four interim final rules setting out procedures governing: (i) Bureau investigations of possible violations of federal consumer financial law; (ii) the Bureau’s use of administrative adjudications to enforce compliance with the Act, rules issued under the Act, and any other federal law or regulation the Bureau is authorized to enforce; (iii) how the Bureau will handle confidential information obtained from persons over which it exercises its authority; and (iv) the process by which state officials must notify the CFPB of actions or proceedings they take under the Act.
To read the complete alert online, click here.
By: Melanie H. Brody, Stephanie C. Robinson
The centerpiece of the Dodd-Frank Act from a consumer protection standpoint is Title X, the Consumer Financial Protection Act of 2010. The Act will create a powerful consumer financial protection watchdog, the Bureau of Consumer Financial Protection. The majority of existing federal consumer financial protection laws will come under the Bureau’s purview, and the Bureau will have broad authority to enforce those laws and to issue its own rules under the Act. This alert describes the Bureau, including its structure, objectives, functions, jurisdiction, rulemaking authority and enforcement powers.
To view the complete alert online, click here.
This client alert is part of a series of alerts focused on monitoring financial regulatory reform. Below is a list of other alerts in the series:
New Executive Compensation and Governance Requirements in Financial Reform Legislation – July 7, 2010
Financial Regulatory Reform – The Next Chapter: Unprecedented Rulemaking and Congressional Activity – July 7, 2010
Investor Protection Provisions of Dodd-Frank – July 1, 2010
Senate Financial Reform Bill Would Dramatically Step Up Regulation of U.S. and Non-U.S. Private Fund Advisers – June 8, 2010
Approaching the Home Stretch: Senate Passes “Restoring American Financial Stability Act of 2010” – June 8, 2010
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