Dodd-Frank News Center

CFPB issues special edition of 'Supervisory Highlights'

This story appeared in Bank Digest.                                   

The Consumer Financial Protection Bureau has issued a special edition of “Supervisory Highlights” that reports examination findings in the areas of consumer reporting and furnishing of information to consumer reporting companies pursuant to the Fair Credit Reporting Act and Regulation V. The Bureau said the report does not impose any new or different legal requirements and that all violations described in the report are based on the specific facts and circumstances reviewed by the Bureau as part of its examinations.

CFPB proposes changes to Remittance Rule

This story appeared in Bank Digest.                                   

The Consumer Financial Protection Bureau has issued a Notice of Proposed Rulemaking relating to the Remittance Rule, which generally requires companies that provide remittance transfers in the normal course of business to disclose to consumers certain fees and the exchange rates that apply to transfers. The rule also includes an exception that allows certain banks and credit unions to estimate certain fee and exchange rate information instead of disclosing exact amounts in certain circumstances, but this exception expires by statute in July 2020, the CFPB said.

According to the Bureau's release, the NPRM proposes to allow certain banks and credit unions to continue to provide estimates under certain conditions where it could be economically infeasible for these institutions to provide exact disclosures. The Bureau is also proposing to increase the safe harbor threshold that determines whether a company makes remittance transfers in the normal course of its business and is subject to the rule.

Comments on the NPRM must be received within 45 days of its publication in the Federal Register.

FCRA maximum disclosure charges to remain the same for 2020

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau has announced the ceiling on allowable charges consumer reporting agencies may issue to consumers in 2020 for disclosures under the Fair Credit Reporting Act. The Bureau said the maximum allowable charge will remain at $12.50 for 2020, as it was for 2019. The Bureau is required to update this amount annually.

 

CFPB issues report on differences between large and small mortgage servicers

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau has released a report examining the differences between large and small mortgage servicers. The report found that smaller servicers, such as community banks and credit unions, play an outsize role in rural areas, that the loans they service are less likely to be sold to Fannie Mae or Freddie Mac or to be government-backed, and that during the financial crisis they experienced lower delinquencies.

CFPB issues interpretive rule on requirements regarding loan originators with temporary authority

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau has issued an interpretive rule clarifying screening and training requirements for financial institutions that employ loan originators with temporary authority to originate loans. The rule will be effective on Nov. 24, 2019.

According to the Bureau's press release, the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) contemplated two categories of loan originators—those working for state-licensed mortgage companies and those working for federally regulated financial institutions. The Economic Growth, Regulatory Relief, and Consumer Protection Act established a third category—loan originators with temporary authority to originate loans, which may act as loan originators for a temporary period of time in a state while that state considers their application for a loan originator license.

 

CFPB files amicus brief in paint poisoning settlement agreement case

This story appeared in Bank Digest.                                   

The Consumer Financial Protection Bureau has filed an amicus brief in the case of Linton, et al. v. Consumer Protection Division. This case involves a Maryland state court's approval of a class-action settlement agreement brought by, among others, victims of lead-paint poisoning who alleged wrongdoing by a company and related persons who purchased the victims' structured settlement payments that had been awarded for their lead-related injuries.

The settlement agreement purported to release the CFPB's claims in a pending Bureau enforcement action alleging similar conduct, to enjoin class members from receiving any benefits from the Bureau's action, and to assign to the parties who caused the class members' injuries all benefits the Bureau may obtain for class members in the Bureau's action.

The CFPB argued that permitting the approval of such a settlement agreement would interfere with its authority to remediate consumer harm under the Consumer Financial Protection Act.

Kraninger speaks at CFPB symposium on ECOA data collection requirements

This story appeared in Bank Digest.                                   

Consumer Financial Protection Bureau Director Kathy Kraninger spoke at the Bureau's symposium on Section 1071 of the Dodd-Frank Act on Nov. 6, 2019, in Washington, D.C. The symposium was the third in a series announced earlier this year to explore consumer protections in the financial services marketplace. Section 1071 amended the Equal Credit Opportunity Act to add a section on small business loan data collection.

In her prepared remarks, Kraninger said Sec. 1071 "requires financial institutions to collect, report, and make public certain information concerning credit applications made by women-owned, minority-owned, and small businesses."

Kraninger noted that "the law specifically directs the Bureau to develop a rule for the collection, reporting, and publication of certain data" and said the symposium would "provide an opportunity for academics, market participants, and policy makers to discuss the hurdles and goals of an effective rule." 

CFPB receives funding for first quarter of FY 2020

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 $223.3 million would be necessary to carry out the authorities of the Bureau for the first quarter of fiscal year 2020. 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.

Agencies adjust exemption threshold for higher-priced mortgage loans

This story appeared in Bank Digest.                                   

The Consumer Financial Protection Bureau, Federal Reserve Board, and Office of the Comptroller of the Currency are finalizing amendments to the official interpretations for their regulations that implement Section 129H of the Truth in Lending Act, which establishes special appraisal requirements for “higher-risk mortgages,” termed “higher-priced mortgage loans” or “HPMLs” in the agencies’ regulations.

These agencies, along with the Federal Deposit Insurance Corporation, National Credit Union Administration, and Federal Housing Finance Agency, issued joint final rules implementing these requirements, effective Jan. 18, 2014. These rules exempted, among other loan types, transactions of $25,000 or less and required that this loan amount be adjusted annually based on any annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

Based on the CPI-W in effect as of June 1, 2019, the exemption threshold will increase from $26,700 to $27,200, effective Jan. 1, 2020.                          

 

Democrats urge CFPB to continue to collect all HMDA data points

This story appeared in Bank Digest.                                   

Senate Banking Committee Ranking Member Sherrod Brown (D-Ohio) and several other committee Democrats have sent a letter to Consumer Financial Protection Bureau Director Kathleen Kraninger requesting that the Bureau continue to collect all Home Mortgage Disclosure Act data points added in the CFPB's 2015 final rule.

According to the senators, "Since HMDA was enacted in 1975, Congress and regulators have repeatedly updated the HMDA statute and regulation to ensure that the data helps fulfill HMDA's stated purposes of determining whether financial institutions are serving the housing needs of their communities; assisting in distributing public-sector investment; and identifying possible discriminatory lending and enforcing antidiscrimination laws."

They went on to say, "We are deeply troubled that the CFPB announced that it would reopen the 2015 HMDA rule before the new data points had even been collected. We urge you to follow the intent of Congress and maintain collection of all data points added by the 2015 final rule."