Dodd-Frank News Center

CFPB Warns of Potential Scam

This story appeared in Bank Digest.

The CFPB has alerted consumers to the potential for scams targeting Native Americans that have received payments as part of a settlement with the federal government over its management as trustee of Individual Indian Money Accounts. The settlement, commonly known as Cobell v. Salazar, will provide funds for Native Americans across the country, which the bureau anticipates scammers will target. The CFPB provides steps for recipients to keep their funds safe and instructions for those that may have been targeted by a scam.

HMDA Asset Threshold Adjusted

This story appeared in Bank Digest.

The CFPB has finalized a rule amending the official commentary that interprets the requirements of Regulation C--Home Mortgage Disclosure (12 CFR 1003) to reflect a change in the asset-size exemption threshold for banks, savings associations and credit unions based on the annual percentage change in the Consumer Price Index for Urban Wage Earners and Clerical Workers. The exemption threshold is adjusted to increase to $42 million from $41 million based on the 2.23 percent increase in the average of the CPI-W for the 12-month period ending in November 2012. As a result, institutions with assets of $42 million or less as of Dec. 31, 2012, are exempt from collecting data in 2013. The bureau asserts that an institution's exemption from collecting data in 2013 does not affect its responsibility to report data it was required to collect in 2012.

FTC Issues Dodd-Frank Report to Congress

This story appeared in Bank Digest.

The Federal Trade Commission has issued a report to Congress explaining steps the agency has taken in connection with new rules on debit card transactions that were put in place last year by the Federal Reserve Board as required by the Dodd-Frank Act. According to the report, the FTC has embarked on outreach, law enforcement and policy efforts to implement the new rules. Over the past year, FTC staff has met with merchants and other stakeholders to discuss their concerns and consulted with attorneys and economists at the Fed regarding the scope of the new regulations. The FTC also has begun an initial investigation to determine whether certain payment card networks may be violating Section 1075 of the Dodd-Frank Act or Regulation II.

CFPB Clarifies Rule Issuance

This story appeared in Bank Digest.

The CFPB has finalized a procedural rule specifying how the bureau issues rules and when rules are considered issued. The rule provides that when a final rule is posted on the bureau's website before it is published in the Federal Register, the posting on the website will constitute the official issuance of the rule.

Financial Shock Transmission Models Examined

By Sarah Borchersen-Keto, CCH Washington News Bureau, Contributing Author, the CCH Federal Banking Law Reporter and Bank Digest.

The Treasury Department's Office of Financial Research has issued as working paper which looks at how agent-based models, which look at how individual firms or “agents” affect outcomes in complex systems, can be used to determine how shocks are transmitted through an interconnected financial system. Agent-based models, the OFR explains, lie outside the academic mainstream of economics and finance and try to understand group behavior by considering “the collective effect of decision rules and expected actions by individuals.” OFR researchers are looking at whether agent-based models can be used to investigate vulnerabilities in the financial system, including understanding contagion, runs and fire sales, as well as assessing the impact of policy actions.

Remittance Transfer Rule Amendments Proposed

By Richard Roth, J.D., Editor, the CCH Federal Banking Law Reporter, CCH Bank Compliance Guide, Bank Digest; co-author, Dodd-Frank Wall Street Reform and Consumer Protection Act—Law, Explanation and Analysis.

As previously announced, the CFPB has proposed amendments to the rule governing international remittance transfers to address concerns of transfer service providers. According to the bureau, the proposal builds on a February final rule on international money transfer, which was supplemented in August). The intent of the regulatory action is to create a comprehensive consumer protection regime for remittance transfers sent by consumers in the United States to individuals and businesses in foreign countries.

UBS Fined $1.5 Billion by Global Regulators For LIBOR Manipulation

By Sarah Borchersen-Keto, CCH Washington News Bureau, Contributing Author, the CCH Federal Banking Law Reporter and Bank Digest.

The Justice Department has announced that Swiss banking group UBS AG has agreed to pay criminal penalties totaling $1.5 billion to U.S., U.K. and Swiss regulators for its part in a multi-year attempt to manipulate the London Interbank Offered Rate, the premier benchmark for short-term interest rates. UBS AG has entered into a non-prosecution agreement with the Justice Department, while its subsidiary UBS Securities Japan Co. Ltd. has agreed to plead guilty to wire fraud. Two former senior UBS traders also have been charged in a criminal complaint. 

CFPB Has “Many Tools” to Hold Credit Reporting Agencies Accountable

By Sarah Borchersen-Keto, CCH Washington News Bureau, Contributing Author, the CCH Federal Banking Law Reporter and Bank Digest.

The Consumer Financial Protection bureau has “many tools” with which to determine if credit reporting agencies are violating the law by failing to forward to creditors all of the information consumers provide when disputing their credit scores. “We've found that this information is not being forwarded,” Corey Stone, a CFPB assistant director, told a Senate Subcommittee on Financial Institutions and Consumer Protection hearing Dec. 19, 2012 (webcast). Subcommittee Chairman Sherrod Brown, D-Ohio, remarked that the current system doesn't always work for consumers. “It does work and is quite profitable for the banking industry who are the main customers of the bureau...but not for consumers who, ultimately, face the impact of credit ratings, credit scores.”

The CFPB began handling individual complaints about consumer reporting companies in mid-October. Last week, the bureau issued a report based on information provided by the big three consumer reporting companies, Equifax, Experian and TransUnion.

GAO Reports on Agencies' Efforts to Coordinate Dodd-Frank Act Rules

By J. Preston Carter, J.D., LL.M., Editor, Financial Privacy Law Guide, CCH Federal Banking Law Reporter, State Banking Law Reporter and Bank Digest; co-author, Dodd-Frank Wall Street Reform and Consumer Protection Act—Law, Explanation and Analysis.

An annual Government Accountability Office study of financial services regulations, mandated by the Dodd-Frank Act, has resulted in no recommendations, but reiterates the GAO's 2011 recommendations that the federal financial regulators more fully incorporate the Office of Management and Budget's guidance into their rulemaking policies and that the Financial Stability Oversight Council work with federal financial regulators to establish formal interagency coordination policies for rulemaking.

CFPB Seeks Information Collection Comments Regarding Credit Card Market

This story appeared in Bank Digest.

The CFPB has issued a notice seeking comments on an information collection regarding the credit card market. Section 502(a) of the Credit Card Accountability Responsibility and Disclosure Act of 2009 requires the CFPB to conduct a review of the consumer credit card market, within the limits of its existing resources available for reporting purposes. The bureau is inviting members of the public, including consumers, credit card issuers, industry analysts, consumer advocates and other interested persons to submit information and other relevant comments.