Dodd-Frank News Center

Waters 'deeply troubled' over CFPB settlement with State Farm Bank

This story appeared in Bank Digest.                                   

House Financial Services Committee Ranking Member Maxine Waters (D-Calif) has issued a statement on the Consumer Financial Protection Bureau's settlement with State Farm Bank, FSB, over the alleged misuse of consumer credit information, in which the Bureau did not impose a civil penalty. In her statement, Waters said, "To cap off his harmful tenure at the Consumer Bureau, Mick Mulvaney has chosen to once again turn a blind eye to predatory behavior."

She added that she was "deeply troubled by the Consumer Bureau's announcement that State Farm Bank will not be held accountable for violating the law by improperly obtaining consumer reports and providing credit bureaus with inaccurate information. Financial institutions that abuse consumers need to face real consequences and State Farm Bank, which has over $16 billion in assets, is no exception."

Waters expresses concerns over CFPB proposal to revise no-action letter policy

This story appeared in Bank Digest.                                     

House Financial Services Committee Ranking Member Maxine Waters (D-Calif) has issued a statement regarding the Consumer Financial Protection Bureau's proposed Policy on No-Action Letters and the BCFP Product Sandbox. Waters said she was "very concerned" by the Bureau's proposal, which she said would "significantly loosen its 'no-action letter' policy in a way that could let bad actors that abuse consumers off the hook entirely from enforcement action by the agency."

The Bureau is proposing to revise its 2016 Policy on No-Action Letters and proposing the BCFP Product Sandbox, which would provide no-action relief substantially the same as that available under the No-Action Letter policy, as well as two additional forms of relief. The proposed policy contains revised information collection requirements which consist of the information that should be submitted in applications for admission to the BCFP Product Sandbox. Written comments on the proposal must be received by Feb. 11, 2019.

Senate confirms Kraninger nomination by one-vote margin

This story appeared in Bank Digest.                                   

The nomination of Kathy Kraninger to be director of the Consumer Financial Protection Bureau was confirmed by the Senate by a vote of 50 to 49 on Dec. 6, 2018. Kraninger will be the second Senate-confirmed CFPB director, following Richard Cordray. Mick Mulvaney has been serving as acting director since Cordray's resignation. House Financial Services Committee Chairman Jeb Hensarling (R-Texas) congratulated Kraninger on her confirmation and said he was "confident that with her experience and knowledge of budget management, Kathy will excel as Director of the Bureau."

Committee Ranking Member Maxine Waters (D-Calif) said Mulvaney had taken "a series of actions to weaken the agency's ability to carry out its important mission" and called on Kraninger "to put consumers first by rolling back the anti-consumer actions taken by her predecessor and allowing the Consumer Bureau to resume its work of protecting hardworking Americans from unfair, deceptive or abusive practices."

CFPB issues 'Fair Lending Report'

This story appeared in Bank Digest.                                     

The Consumer Financial Protection Bureau has issued its "Fair Lending Report of the Bureau of Consumer Financial Protection," which "describes the Bureau's fair lending activities for 2017, consistent with its statutory mandate to ensure that consumers are protected from discrimination," according to an introductory message from CFPB Acting Director Mick Mulvaney.

The report, from the Bureau's Office of Fair Lending and Equal Opportunity, is intended to fulfill the Dodd-Frank Act's requirement that the Bureau file an annual report to Congress describing the administration of its functions under the Equal Credit Opportunity Act, summarizing public enforcement actions taken by other agencies with administrative enforcement responsibilities under ECOA, and providing an assessment of the extent to which compliance with ECOA has been achieved. The act also requires the Bureau, in consultation with the Department of Housing and Urban Development, to report annually on the utility of the Home Mortgage Disclosure Act's requirement that covered lenders itemize certain mortgage loan data.

According to a related Bureau blog post by Patrice Ficklin, the director of the Office of Fair Lending and Equal Opportunity, the report "highlights how in 2017 we continued to focus on promoting fair, equitable, and nondiscriminatory access to credit in mortgage lending, continued fair lending supervision of servicing and small business lending, and embarked on new efforts to encourage innovation in expanding credit access."

Santander settles claims over loan extension program

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau has settled an administrative action with Santander Consumer USA Inc., a consumer financial services company based in Dallas, Texas, regarding the company's alleged violations of the Consumer Financial Protection Act of 2010. The CFPB found that Santander did not properly describe the benefits and limitations of its S-GUARD GAP product, which it offered as an add-on to its auto loan products, and also found that Santander failed to properly disclose the impact on consumers of obtaining a loan extension.

Under the terms of a consent order, Santander must, among other provisions, provide approximately $9.29 million in restitution to certain consumers who purchased the add-on product, clearly and prominently disclose the terms of its loan extensions and the add-on product, and pay a $2.5 million civil money penalty.

TILA threshold for exempt consumer credit transactions increased for 2019

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau and Federal Reserve Board are amending the official interpretations and commentary for the agencies' regulations that implement the Truth in Lending Act to reflect the dollar threshold for exempt consumer credit transactions for 2019. The agencies said that the exemption threshold will increase from $55,800 to $57,200, effective Jan. 1, 2019.

The Dodd-Frank Act amended TILA by requiring that this threshold be adjusted annually by the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). If there is no annual percentage increase in the CPI-W, the Bureau and the Fed will not adjust this exemption threshold from the prior year.

CLA threshold for exempt consumer leases increased for 2019

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau and Federal Reserve Board are finalizing amendments to the official interpretations and commentary for the agencies' regulations that implement the Consumer Leasing Act to reflect the dollar threshold for exempt consumer leases for 2019. The agencies said that the exemption threshold will increase from $55,800 to $57,200, effective Jan. 1, 2019.

The Dodd-Frank Act amended the CLA by requiring that this threshold be adjusted annually by the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). If there is no annual percentage increase in the CPI-W, the Bureau and the Fed will not adjust this exemption threshold from the prior year.

Agencies establish exemption threshold for higher-priced mortgage loan appraisals

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau, Federal Reserve Board, and Office of the Comptroller of the Currency have determined that the threshold amount for exemptions from special appraisal requirements for higher-risk mortgages (higher-priced mortgage loans) under the Truth in Lending Act will increase from $26,000 to $26,700, effective Jan. 1, 2019. This amount must be adjusted annually based on any annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), but if there is no annual percentage increase in the CPI-W, the agencies will not adjust this exemption threshold from the prior year.

CFPB and Fed propose funds availability adjustments

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau and Federal Reserve Board have jointly proposed amendments to Reg. CC--Availability of Funds and Collection of Checks (12 CFR Part 229) that would implement a statutory requirement to adjust for inflation the amount of funds depository institutions must make available to their customers. Reg. CC implements the Expedited Funds Availability Act of 1987. The proposed amendments would apply in circumstances ranging from next business day withdrawal of check deposits to setting the threshold amount for determining whether an account has been repeatedly withdrawn.

 The agencies also propose to implement, in Reg. CC, EFA Act amendments made by the Economic Growth, Regulatory Relief, and Consumer Protection Act, which include extending coverage of the EFA Act to American Samoa, the Commonwealth of the Northern Mariana Islands, and Guam.

Finally, the agencies are providing an additional opportunity for public comment on certain funds-availability amendments in Subpart B of Reg. CC that the Fed published in 2011 regarding funds availability schedule provisions and associated definitions. The agencies are accepting comments on all aspects of the proposed amendments, as well as on the 2011 funds availability proposal, for 60 days following publication in the Federal Register.

Advisory council meetings announced

This story appeared in Bank Digest.

The Community Financial Protection Bureau's Community Bank Advisory Council, Consumer Advisory Board, and Credit Union Advisory Council will each hold public meetings on Dec. 6, 2018, from approximately 1:00 p.m. to 3:45 p.m. Eastern Daylight Time to discuss artificial intelligence in consumer financial services and consumer access to financial records. The meetings will take place via conference call.