Dodd-Frank News Center

Perdue requests Mulvaney provide confidential briefing on data collection, breaches

This story appeared in Bank Digest.                                     

Senator David Perdue (R-Ga) sent a letter to Consumer Financial Protection Bureau Acting Director Mick Mulvaney requesting that he provide Senate Banking Committee members with a confidential briefing about the CFPB's data collection processes and recent security breaches. The request follows Mulvaney's April appearance before the committee regarding data collection by the CFPB and security breaches with respect to the data. 

In the letter, Perdue said, "Because your predecessor failed to report security breaches and stymied Congress' attempts to understand more about the CFPB's data collection process, little is known about the CFPB's consumer data operation. In your testimony, you said you didn't realize the agency was storing consumer data in third party servers until you took over as the acting director, and that you have discovered 240 'lapses' and nearly 800 potential 'lapses.'" 

Perdue said he understood that the information he was seeking was "too sensitive to discuss in a public setting" and that he was requesting that Mulvaney "brief Congress in a confidential setting about these security breaches, data collection, and data security."

Economic Growth, Regulatory Relief, and Consumer Protection Act signed into law

This story appeared in Bank Digest.                                     

President Donald J. Trump has signed into law the Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155), an act that is intended to ease many of the post-recession restrictions that were imposed on the financial services industry by the Dodd-Frank Act. At a signing ceremony, President Trump said, "This is truly a great day for America and a great day for American workers and small businesses all throughout the nation."

While the President, and a fact sheet released post-signing by the White House, focused on the impact of the law on community banks, which are often defined as those under $10 billion in assets, significant provisions will change which bank holding companies are subject to enhanced prudential standards, benefiting much larger banks.

Senate Banking Committee Chairman Mike Crapo (R-Idaho), the bill's sponsor, said the "bill's passage marks one of our greatest achievements in the 115th Congress," and House Financial Services Committee Chairman Jeb Hensarling (R-Texas) said the bill "takes a major step toward allowing the banking system to serve the needs of American businesses and American families instead of working in the interest of Washington bureaucracy." But Senate Banking Committee Ranking Member Sherrod Brown (D-Ohio) said, "Today, special interests win again. The President signed in to law a giveaway that loosens rules for the same big banks that helped crash the economy a decade ago, leaving Americans taxpayers responsible for a $239 billion bailout."

 

CFPB encourages couples to be prepared to manage family finances if spouse dies

This story appeared in Bank Digest.                                   

A Consumer Financial Protection Bureau blog post advises married couples to make sure that both spouses are equally ready to manage the household finances if one of them becomes ill or dies. The post provides a quiz to determine how prepared each spouse is to manage the family's finances. It also suggests steps couples can take to make sure each spouse has adequate knowledge of the family's finances and knows what to do if the other spouse becomes ill or dies.

 

House passes regulatory relief bill

This story appeared in Bank Digest.                                     

The House of Representatives has passed the Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155) by a vote of 258 to 159, with 10 not voting. A House Financial Services Committee press release called the bill, which would modify provisions of the Dodd-Frank Act and related laws governing financial services, "the most significant pro-growth financial regulatory reform package since the passage of Gramm-Leach-Bliley nearly a generation ago." The Senate previously passed S. 2155 on March 14, 2018, by a vote of 67 to 31. 

 Republicans in the House and Senate praised passage of the bill, with Senate Banking Committee Chairman Mike Crapo (R-Idaho) saying, "This step toward right-sizing regulation will allow local banks and credit unions to focus more on lending, in turn propelling economic growth and creating jobs on Main Street and in our communities." Similarly, Senate Majority Leader Mitch McConnell (R-Ky) said House passage of the bill "represents a major victory for America's local lenders and the communities they support." 

House Speaker Paul Ryan (R-Wis) called passage of the bill "a major step forward in freeing our economy from overregulation," while House Majority Leader Kevin McCarthy (R-Calif) said that "House passage of this bill is yet another major step for America's comeback." 

However, Democrats were critical of the bill, with House Financial Services Committee Ranking Member Maxine Waters (D-Calif) saying in a prepared floor statement that "the bill is packed with poisonous provisions that benefit megabanks like Wells Fargo and companies like Equifax" and House Minority Leader Nancy Pelosi (D-Calif) calling the legislation "a bad bill under the guise of helping community banks." 

Comptroller of the Currency Joseph M. Otting issued a statement saying the bill "restores an important balance to the business of banking," while Treasury Secretary Steven Mnuchin said the bill "will lead to increased investment in communities across the United States and foster greater economic growth for our country."           

CFPB's 2013 indirect auto lenders bulletin nullified

This story appeared in Bank Digest.                                     

On Monday, May 21, 2018, President Donald J. Trump signed into law S.J. Res. 57, which used Congressional Review Act authority to nullify the Consumer Financial Protection Bureau's 2013 bulletin regulating indirect auto lenders for compliance with the Equal Credit Opportunity Act. The Senate had approved the resolution by a 51-47 vote on April 18, and the House of Representatives followed suit with a vote of 234-175 on May 8. 

The CFPB issued the guidance to ensure compliance with the ECOA and to institute more rigorous oversight of the automobile financing process to eliminate discriminatory practices. But Section 1029 of the Dodd-Frank Act forbids the Bureau from regulating auto dealers, and the bulletin was issued without allowing public comment. In addition, some auto dealers feel it threatens their ability to negotiate the terms of loans with their customers and that the guidance has been used to sanction auto financing companies. 

A CFPB press release noted, "Today's action also clarifies that a number of Bureau guidance documents may be considered rules for purposes of the CRA, and therefore the Bureau must submit them for review by Congress."

Report says CFPB complied with Improper Payments Information Act for Civil Penalty Fund

This story appeared in Bank Digest.  

The Office of Inspector General for the CFPB and the Federal Reserve Board has released an audit report on the Consumer Financial Protection Bureau Civil Penalty Fund's compliance with the Improper Payments Information Act of 2002 for fiscal year 2017. The OIG contracted with an independent public accounting firm to complete the audit, although the OIG reviewed and monitored the work of the contractor to ensure compliance with the contract and the "Government Auditing Standards."

According to the report, the IPIA requires agency heads to periodically review and identify all programs and activities that may be susceptible to significant improper payments. The firm conducting the audit concluded that the CFPB complied with the applicable requirements of the IPIA for FY 2017 as they relate to the Civil Penalty Fund.

CFPB updates small entity compliance guide and forms guide

This story appeared in Bank Digest.   

The Consumer Financial Protection Bureau has updated both versions of its Small Entity Compliance Guide and both versions of its related guide to forms to reflect the 2018 "TILA-RESPA Integrated Disclosure Rule." These May 2018 revisions include updates to both the "old" and the "new" versions of each of the guides to provide "implementation support during the optional compliance period for the 2017 TILA-RESPA Rule." 

 Accordingly, the CFPB has provided updates to versions 4.1 and 5.2 of the Small Entity Compliance Guide on the TILA-RESPA Integrated Disclosure Rule. Likewise, the Bureau has provided updates to versions 1.5 and 2.1 of the guide pertaining to the "Loan Estimate and Closing Disclosure forms" in connection with the rule. 

 The higher-numbered versions of each of the guides have been updated to reflect both the 2017 and 2018 TILA-RESPA rules, but the lower-numbered versions of the guides have only been updated to reflect the 2018 TILA-RESPA Rule. 

• TILA-RESPA Integrated Disclosure rule--Small entity compliance guide--Version 5.2 
• TILA-RESPA Integrated Disclosure rule--Small entity compliance guide--Version 4.1 
• TILA-RESPA Integrated Disclosure--Guide to the Loan Estimate and Closing Disclosure forms--Version 2.1 
• TILA-RESPA Integrated Disclosure--Guide to the Loan Estimate and Closing Disclosure forms--Version 1.5

 

CFPB releases mortgage shopping study

This story appeared in Bank Digest.  

A Consumer Finance Protection Bureau blog post says that comparison shopping for a mortgage can lead to significant savings. The author cited the Bureau's newly released "Know Before You Owe: Mortgage shopping study," which the post said found that while homebuyers have gaps in their mortgage knowledge, "just the process of shopping for a mortgage makes homebuyers more knowledgeable." The post added that "saving even a quarter of a point in interest on your mortgage saves you thousands of dollars over the life of your loan."

The CFPB's mortgage shopping study was specifically focused on whether encouraging mortgage shopping benefits consumers. It found, among other things, that "encouraged shopping"--the additional shopping prompted by encouraging borrowers to shop--increases consumers' knowledge of the mortgage market and increases consumers' self-confidence in their ability to deal with mortgage-related issues. The study also provided suggestive evidence that encouraged shopping may reduce the cost of consumers' mortgages.

CFPB issues spring 2018 rulemaking agenda

This story appeared in Bank Digest.                                     

The Consumer Financial Protection Bureau has issued its spring 2018 rulemaking agenda in accordance with the Regulatory Flexibility Act, under which federal agencies must publish regulatory agendas twice each year. A CFPB blog post said the Bureau has been voluntarily participating in the Unified Agenda, which is led by the Office of Management and Budget and which includes rulemaking actions in pre-rule, proposed rule, final rule, long-term, inactive, and completed stages. 

According to the post, Bureau leadership is prioritizing the following activities during the coming months: (1) meeting specific statutory responsibilities; (2) continuing selected rulemakings that were already underway; (3) reconsidering two regulations issued under the prior leadership

Congress members oppose closing of CFPB's Office of Students and Young Consumers

This story appeared in Bank Digest.                                     

Several Congress members have issued statements following the announcement that the Consumer Financial Protection Bureau intends to dissolve its Office of Students and Young Consumers, which was created to support the mission of the CFPB's Student Loan Ombudsman, according to a press release by Senate Banking Committee Ranking Member Sherrod Brown (D-Ohio). The release said the office and the Student Loan Ombudsman empower and inform students on safer financial products and options, including student loans. 

In his statement, Brown said that CFPB Acting Director Mick Mulvaney "has defaulted on his obligation to help the thousands of Americans who are struggling with unfair student loans." Similarly Sen. Brian Schatz (D-Hawaii) said the decision "is a total dereliction of duties by the CFPB."

According to House Financial Services Committee Ranking Member Maxine Waters (D-Calif), "The closing of the Office of Students and Young Consumers is deeply concerning and will most certainly set back the progress the Consumer Bureau had made to protect our nation's students and consumers."