Dodd-Frank News Center

CFPB blog post discusses reports assessing ability-to-repay, mortgage servicing rules

This story appeared in Bank Digest.                                     

A Consumer Financial Protection Bureau blog post discusses two reports assessing significant CFPB rules--one assessing the effectiveness of the Bureau's Ability-to-Repay and Qualified Mortgage Rule and another assessing the effectiveness of the Mortgage Servicing Rule issued under the Real Estate Settlement Procedures Act. Both rules were issued in January 2013 and took effect in January 2014.

According to the post, the Ability-to-Repay and Qualified Mortgage Rule was issued to implement provisions of the Dodd-Frank Act requiring lenders, before entering into a residential mortgage loan, "to make a reasonable and good faith determination that the consumer has a reasonable ability to repay the loan."

The RESPA Mortgage Servicing Rule was issued "to implement certain provisions of the Dodd-Frank Act imposing new obligations on mortgage servicers," and it "also added new protections, which the Bureau deemed appropriate or necessary to carry out the consumer protection purposes of RESPA."

CFPB receives funding for second quarter of FY 2019

This story appeared in Bank Digest.

In a funding request letter to the Federal Reserve Board, Consumer Financial Protection Bureau Director Kathy Kraninger said that $122,800,000 would be necessary to carry out the authorities of the Bureau for the second quarter of fiscal year 2019. As required by law, each fiscal quarter the Fed transfers to the CFPB the amount of funds formally requested by the director.

The Fed sent a letter to the CFPB's chief financial officer stating that the requested funds had been deposited into the Bureau of Consumer Financial Protection Fund at the Federal Reserve Bank of New York.

Fed proposes revising stress testing requirements

This story appeared in Bank Digest.  

The Federal Reserve Board has issued a proposed rule that would modify company-run and supervisory stress testing requirements to conform with the Economic Growth, Regulatory Relief, and Consumer Protection Act. Among other changes, the proposal would raise the threshold requiring state-member banks to conduct their company-run stress tests from $10 billion in total consolidated assets to $250 billion and would generally require firms above the threshold to conduct stress tests once every other year instead of annually.

The proposal is similar to separate proposals issued by the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency. Comments will be accepted until Feb. 19, 2019.

CFPB updates Civil Penalty Fund FAQs

This story appeared in Bank Digest.                    

The Consumer Financial Protection Bureau has released an updated version of frequently asked questions concerning the Bureau's Civil Penalty Fund. The Bureau has updated the answer to question 10--regarding the Civil Penalty Fund Allocation Schedule--to reflect allocations made through Nov. 29, 2018, and the answer to question 12 to update the amount collected in the Civil Penalty Fund through Sept. 30, 2018.

CFPB settles with savings association over alleged failure to honor stop payment requests

This story appeared in Bank Digest.                                   

The Consumer Financial Protection Bureau has reached a settlement with USAA Federal Savings Bank, a federally chartered savings association headquartered in San Antonio, Texas, over alleged violations of the Electronic Fund Transfer Act and Regulation E, as well as alleged violations of the Consumer Financial Protection Act of 2010. USAA consented to the issuance of a consent order without admitting or denying any wrongdoing.

According to the Bureau's release, the CFPB alleged that the bank violated the EFTA and Reg. E by failing to properly honor consumers' stop payment requests on preauthorized electronic fund transfers and by failing to initiate and complete reasonable error resolution investigations. The Bureau also alleged that USAA violated the CFPA by reopening deposit accounts consumers had previously closed without seeking prior authorization or providing adequate notice.

Under the terms of the consent order, USAA must provide approximately $12 million in restitution to certain consumers and pay a $3.5 million civil money penalty, among other provisions.

CFPB updates HMDA and TILA asset-size exemption thresholds, FCRA maximum disclosure charges

This story appeared in Bank Digest.                                     

The Consumer Financial Protection Bureau has made annual inflation adjustments to asset-size thresholds set by its regulations that implement the Home Mortgage Disclosure Act and the Truth in Lending Act. All of the changes are applicable on Jan. 1, 2019. The HMDA asset-size threshold for exemptions from data collection requirements is adjusted to increase to $46 million from $45 million.

The TILA asset-size threshold for exemptions from the requirement to establish escrow accounts for higher-priced mortgage loans has been increased to $2.167 billion from $2.112 billion. This asset limit will also apply during a grace period, in certain circumstances, with respect to transactions with applications received before April 1 of 2020.

In addition, the Bureau has increased the ceiling on allowable charges consumer reporting agencies may issue to consumers for disclosures under the Fair Credit Reporting Act from $12.00 to $12.50, effective for 2019.                   

Agencies find weaknesses but not deficiencies in resolution plans of foreign-based banks

This story appeared in Bank Digest.                                   

The Federal Deposit Insurance Corporation and Federal Reserve Board have announced that the resolution plans of four foreign-based banks had weaknesses but not "deficiencies," which are weaknesses severe enough to result in additional prudential requirements if not corrected. Resolution plans, commonly known as living wills, are required by the Dodd-Frank Act and must describe each company's strategy for rapid and orderly resolution under bankruptcy in the event of material financial distress or failure of the company.

The agencies determined that the plans of the four firms--Barclays, Credit Suisse, Deutsche Bank, and UBS--have "shortcomings," which are less severe weaknesses that require additional work in their next plan. The agencies sent feedback letters to each firm detailing the shortcomings and specific actions that can be taken to address them.

The agencies have also announced that they have finalized resolution plan guidance applying to the eight largest and most complex domestic banking organizations.

CFPB seeks renewal of Gramm-Leach-Bliley Act information collection

This story appeared in Bank Digest.                                   

The Consumer Financial Protection Bureau is proposing to renew, without change, the Office of Management and Budget approval for an existing information collection entitled "Gramm-Leach-Bliley Act (Regulation P) 12 CFR 1016." According to the Bureau's notice, Reg. P was promulgated to implement the Gramm-Leach-Bliley Act's notice requirements and restrictions on a financial institution's ability to disclose nonpublic personal information about consumers to nonaffiliated third parties.

On Oct. 1, 2018, the CFPB issued a 60-day notice at 83 Federal Register 49370 requesting comments on the proposed renewal. Written comments on the current notice must be received by Jan. 22, 2019, and will be reviewed by the OMB as part of its review of this request.

OIG says CFPB's purchase card program controls appear to be effective

This story appeared in Bank Digest.                                     

The Office of Inspector General for the Consumer Financial Protection Bureau and the Federal Reserve Board has issued an audit report regarding the controls for the Bureau's purchase card program for the period of April 1, 2017, through June 30, 2018. According to the report, the Bureau developed the purchase card program to support its purchasing needs and to reduce the administrative cost of purchasing small-dollar items.

The OIG found that the Bureau's purchase card program controls appear to be operating effectively to ensure that purchase card use is appropriate and in compliance with applicable laws, regulations, and the Bureau's policies and procedures. In addition, the report said the controls appear to be operating effectively to prevent and detect potentially improper or fraudulent use of purchase cards. The OIG made no recommendations in its report.

Democrats request that CFPB resume supervisory role over MLA

This story appeared in Bank Digest.                                   

House Financial Services Committee Ranking Member Maxine Waters (D-Calif), committee member Denny Heck (D-Wash), and 21 other committee Democrats have sent a letter to Consumer Financial Protection Bureau Director Kathy Kraninger urging her to recommit the Bureau to fulfilling its supervisory role over consumer protection laws, including the Military Lending Act, which the representatives said provides protections for active-duty servicemembers and their families from predatory loans and credit gouging.

In their letter, the representatives expressed their "deep concerns that the Consumer Bureau has recently decided to cease supervising its regulated entities for compliance with the Military Lending Act ("MLA"), a failure to fulfill its responsibility under the law and which is nothing less than a dereliction of duty. We write to seek your written commitment that you will promptly ensure that the Consumer Bureau fulfills its explicit statutory purpose and mandates by resuming a consistent supervisory role over consumer protection laws, including the MLA, for the most robust and efficient protection of servicemembers and their families."