Dodd-Frank News Center

Brown urges CFPB Director to implement effective date of the Payday Rule

This story appeared in Bank Digest.                               

Senator Sherrod Brown (D-Ohio), Ranking Member of the Senate Banking Committee, is demanding that Consumer Financial Protection Bureau Director Kathy Kraninger implement the payment provision of the Payday Rule that was issued by the CFPB in October 2017. The Aug. 19, 2019, effective date has been stayed by the U.S. courts. "The Bureau's refusal to request to lift the stay of the compliance date for the payment provisions makes no sense and exposes consumers to continued withdrawal requests, resulting in unnecessary fees," wrote Brown.

The Payday Rule prohibits lenders from attempting to withdraw payments from consumers' accounts for certain loans after two prior attempts to withdraw funds failed due to a lack of funds. The Rule also prohibits lenders from making certain loans without determining that the consumer has the ability to repay the loans.

CFPB announces $60M settlement with company over alleged unfair, abusive student loan practices

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau has announced a proposed settlement with ITT Educational Services, Inc., to resolve the Bureau's lawsuit alleging that ITT engaged in unfair and abusive practices in connection with its private loan program for students in violation of the Consumer Financial Protection Act of 2010.

According to the Bureau's release, the terms of the proposed stipulated order include, among other things, a judgment against ITT for $60 million and an injunction prohibiting the company from offering or providing student loans in the future.

In a separate action filed by the CFPB on June 14, 2019, a final stipulated judgment was entered against the entity holding the private loans at issue, Student CU Connect CUSO, LLC. Under the terms of that judgment all collection on such loans must cease, all outstanding loans must be discharged, and all negative credit reporting must be corrected, the CFPB said.

Brown and Warren request action in wake of Blankenstein investigation

This story appeared in Bank Digest.                                   

Senate Banking Committee Ranking Member Sherrod Brown (D-Ohio) and Sen. Elizabeth Warren (D-Mass) have sent letters to the Consumer Financial Protection Bureau, the Office of Inspector General for the CFPB and Federal Reserve Board, and the Department of Housing and Urban Development regarding an investigation by the OIG into the conduct of political appointee Eric Blankenstein during his time at the CFPB. According to Brown's press release, Blankenstein was hired as senior counsel of HUD's Office of General Counsel just one month after resigning from the CFPB in the wake of racist and sexist blog posts that were uncovered by the Washington Post in 2018.

As quoted in Brown's release, the OIG's report found that Blankenstein "may have abused his authority," "may have misused his position for private gain," and "created the appearance of a violation of the Standards of Ethical Conduct for Employees of the Executive Branch."

Brown and Warren are requesting that: (1) the OIG open a follow-up investigation into the CFPB's decision to dismantle the Office of Fair Lending and Equal Opportunity during Blankenstein's time at the agency; (2) HUD immediately fire Blankenstein; and (3) the CFPB dismiss political appointees and allow professional career staff to return to carrying out their work to protect consumers without political pressure.

Brown and Hill issue statements on CFPB's qualified mortgage ANPR

This story appeared in Bank Digest.                                   

Senate Banking Committee Ranking Member Sherrod Brown (D-Ohio) and Rep. French Hill (R-Ark) have issued statements regarding the Consumer Financial Protection Bureau's Advance Notice of Proposed Rulemaking seeking information relating to the expiration of the temporary qualified mortgage provision in the Bureau's Ability to Repay/Qualified Mortgage (ATR/QM) Rule that is applicable to certain mortgage loans eligible for purchase or guarantee by Government Sponsored Enterprises Fannie Mae and Freddie Mac. This provision, also known as the GSE Patch, is scheduled to expire no later than Jan. 10, 2021, although the ANPR says the Bureau may allow a short extension, if necessary, to facilitate a smooth and orderly transition away from the patch. In the ANPR, the Bureau solicits comments on possible amendments to the ATR/QM Rule.

Brown said, "The focus of the Consumer Protection Bureau should be protecting consumers. The action they take on this critical rule should be first and foremost about providing access to sustainable mortgages that fit the needs of individual consumers in today's housing market, and they should hold lenders accountable when they don't live up to their obligations."

Hill supported the CFPB's decision to end the GSE Patch, saying, "Allowing Fannie and Freddie to continue loading up on high-debt mortgages, because of a temporary loophole, has had a harmful effect on the broader housing market."

CFPB seeks renewal of RESPA information collection

This story appeared in Bank Digest.

The CFPB is requesting to renew, without change, the Office of Management and Budget approval for an existing information collection entitled “Real Estate Settlement Procedures Act (Regulation X) 12 CFR 1024.” According to the CFPB’s notice, consumers use the disclosures required by the Real Estate Settlement Procedures Act and its implementing Regulation X to inform their choice of settlement service providers, review the final terms of a settlement, understand who to contact about questions concerning their mortgage loan, and identify and protect themselves against inaccurate or questionable loan servicing practices. On April 8, 2019, the Bureau issued a 60-day Federal Register notice seeking comments on the proposal. Written comments on the current notice must be received by Aug. 21, 2019, and will be reviewed by the OMB as part of its review of this request.

CFPB issues updated advisory urging institutions to report suspected financial exploitation of older adults

This story appeared in Bank Digest.

The CFPB has issued an updated advisory to financial institutions urging them to report to the appropriate local, state, and federal authorities whenever they suspect that an older adult is the target or victim of financial exploitation. The Bureau also recommended that financial institutions file Suspicious Activity Reports with the federal government when they suspect elder financial exploitation. According to the CFPB’s press release, the updated advisory builds on the Bureau’s earlier recommendations and its recent research on elder financial abuse, and it contains voluntary best practices to help financial institutions prevent and respond to elder financial exploitation.

 

 

 

OIG issues ‘Work Plan’ presenting current or planned audits and evaluations

This story appeared in Bank Digest.

The Office of Inspector General for the CFPB and the Federal Reserve Board has issued a “Work Plan,” current as of July 1, 2019, presenting the audits and evaluations the OIG is conducting to assist the CFPB and the Fed in fulfilling their respective missions. The “Work Plan” is updated quarterly, and each project is categorized as “initiated,” “in development,” or “planned.” In addition, each quarter, projects that are new or have been canceled, terminated, or issued as reports are marked as such, the OIG said.

CFPB blog post addresses myths in military community about personal finance

This story appeared in Bank Digest.

Noting that the CFPB’s Office of Servicemember Affairs’ has engaged with military families throughout the country and even the world” over the past eight years and that its members” have heard lots of barracks rumors and scuttlebutt,” a Bureau blog post addresses five myths in the military community regarding personal finance. The five myths the post discusses are: (1) credit card companies are required to waive annual fees for servicemembers; (2) the Servicemembers Civil Relief Act only helps servicemembers by lowering interest rates; (3) the Military Lending Act doesn’t protect servicemembers’ spouses or dependent children; (4) servicemembers need to pay someone to help them with their financial issues; and (5) financial issues are too complicated for the average person.

 

CFPB issues report on patterns of revolving and repayment of credit card accounts

This story appeared in Bank Digest.                         

The Consumer Financial Protection Bureau has issued the latest in its occasional series of data point reports—this one studying patterns of revolving and repayment of credit card accounts in the United States. Cardholders can either repay their balances in full at the end of a billing cycle or repay only a portion of the balance, borrowing the unpaid portion, in which case they are said to revolve a balance. The current report examines how often balances are revolved (or borrowed) on an account, how long balances are revolved, and how regularly they are paid down.

According to the report, about two-thirds of actively used credit card accounts carry a revolving balance, and once consumers pay less than the balance due and begin to revolve on an account, they do so continuously for about 10 months on average. The report added that the longer a balance is revolved, the higher the chances are that a consumer will continue to revolve a balance on the account.

 

CFPB issues 2018 Fair Lending Report

This story appeared in Bank Digest.                                   

The Consumer Financial Protection Bureau has issued its Fair Lending Report to Congress for 2018, which describes the Bureau's "2018 activities to expand fair, equitable, and nondiscriminatory access to credit and to ensure that consumers are protected from discrimination," according to an introductory message from CFPB Director Kathleen Kraninger. As described in a related Bureau blog post, the report explains how in 2018, the CFPB: (1) convened a symposium entitled "Building a Bridge to Credit Visibility" that brought together diverse stakeholders to expand credit access; (2) monitored compliance with anti-discrimination laws; and (3) issued new guidance to facilitate implementation of the Home Mortgage Disclosure Act, among other activities.