Dodd-Frank News Center

CFPB settles with finance entities over alleged illegal loan collection

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau has announced a proposed settlement with Think Finance, LLC, formerly known as Think Finance, Inc., and six subsidiaries (collectively, the "Think Finance Entities") to resolve a Bureau lawsuit filed in November 2017.

As described in the CFPB's press release, the Bureau alleged that the Think Finance Entities engaged in unfair, deceptive, and abusive acts and practices in violation of the Consumer Financial Protection Act in connection with the illegal collection of loans that were void in whole or in part under state laws governing interest rate caps, the licensing of lenders, or both.

The Bureau's proposed stipulated final consent order is a component of the global resolution of the Think Finance Entities' bankruptcy proceeding in the Bankruptcy Court for the Northern District of Texas, which includes settlements with the Pennsylvania Attorney General's Office and private litigants in a nationwide consumer class action.

Foreclosure Prevention and Refinance Report filed

This story appeared in Bank Digest.

The Federal Housing Finance Agency has issued its Foreclosure Prevention and Refinance Report for October 2019. According to the report, Fannie Mae and Freddie Mac (the Enterprises) completed 9,082 foreclosure prevention actions in October, bringing the total to 4,390,118 since the Enterprises were placed into conservatorship in September 2008.

In addition, there were 5,801 permanent loan modifications in October, bringing the total to 2,379,758 since the start of the conservatorships.

The report also said that total refinance volume increased in October and that mortgage rates also increased during the month, with the average interest rate on a 30-year fixed rate mortgage rising to 3.69 percent from a 3.61-percent rate in September.

Waters says CFPB's new UDAAP policy statement will harm consumers

This story appeared in Bank Digest.

House Financial Services Committee Chairwoman Maxine Waters (D-Calif) has issued a statement regarding the Consumer Financial Protection Bureau's policy statement on the Dodd-Frank Act's prohibition of unfair, deceptive, or abusive acts or practices (UDAAP) in the consumer financial marketplace.

According to Waters, "Director Kraninger's new policy creates new standards that must be satisfied before the Consumer Bureau will enforce the 'abusive' component of UDAAP, hampering the agency's ability to protect consumers or to punish bad actors. This policy will also hinder the Consumer Bureau's ability to hold entities accountable by rewriting the law to require a cost-benefit analysis when considering whether an act or practice is abusive. Even worse, it allows entities that engage in abusive conduct to avoid paying penalties, literally letting those who abuse consumers get off scot-free."

CFPB updates HMDA Small Entity Compliance Guide

This story appeared in Bank Digest.     

The Consumer Financial Protection Bureau has published an updated version of the Home Mortgage Disclosure Act Small Entity Compliance Guide. Changes to the Guide include updates to incorporate content from the HMDA Final Rule issued in October 2019.

CFPB issues policy statement to clarify 'abusiveness' standard

This story appeared in Bank Digest.     

The Consumer Financial Protection Bureau has issued a policy statement clarifying how it intends to apply the "abusiveness" standard in supervision and enforcement matters. Under Section 1031(a) of the Dodd-Frank Act, the Bureau may use its authority to prevent covered entities from engaging in abusive acts or practices in connection with consumer financial services or offerings.

According to the Bureau, since the Act's enactment almost 10 years ago, uncertainty remains as to the scope and meaning of "abusiveness." The policy statement, which is immediately applicable, is intended to provide clarity and foster greater certainty.

FHFA proposes amendments to stress testing rule

This story appeared in Bank Digest.                                   

The Federal Housing Finance Agency is proposing amendments to its stress testing rule, consistent with Section 401 of the Economic Growth, Regulatory Relief, and Consumer Protection Act, that would revise the minimum threshold for the regulated entities to conduct stress tests from $10 billion to $250 billion, remove the requirements for Federal Home Loan Banks subject to stress testing, and remove the adverse scenario from the list of required scenarios. The proposed rule would also make certain conforming and technical changes. Comments must be received by Jan. 15, 2020.

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.

Calabria issues statement on FSOC's issuance of nonbank designation guidance

This story appeared in Bank Digest.                                   

Federal Housing Finance Agency Director Mark A. Calabria has issued a statement on the recent Financial Stability Oversight Council principals meeting, at which the Council approved final guidance regarding nonbank financial company designations. Calabria noted in his statement that one of the FSOC's core purposes under the Dodd-Frank Act is to end bailouts, but he said he was concerned that actions taken just over a decade ago, such as the establishment of the Troubled Asset Relief Program, reinforced the expectation of bailouts.

Calabria went on to say that he believed the guidance on nonbank designations the FSOC had approved was an important step towards ending bailouts. According to Calabria, "Some of the previous nonbank designations were done in such a manner that raised the possibility that designated entities would be perceived as 'too big to fail.' In doing so, the Council ran the risk that a designation would distort market expectations and reduce market discipline, contrary to its statutory purposes. I believe the approach the Council adopted yesterday reduces that risk."

FSOC issues 2019 Annual Report

This story appeared in Bank Digest.                                   

The Financial Stability Oversight Council has released its 2019 Annual Report, which describes, among other things, significant financial market and regulatory developments, potential emerging threats to U.S. financial stability, recommendations to promote U.S. financial stability, and the activities of the Council.

FSOC issues final guidance on nonbank financial company designations

This story appeared in Bank Digest.                                   

The Financial Stability Oversight Council has issued final guidance regarding nonbank financial company designations. According to a press release, the guidance implements an activities-based approach for identifying and addressing potential risks to financial stability and enhances the analytical rigor and transparency of the Council's process for designating nonbank financial companies.

The final guidance revises and updates the interpretive guidance the FSOC adopted in 2012 to ensure its work is clear, transparent, and analytically rigorous and to enhance the Council's engagement with companies, regulators, and other stakeholders. The guidance is effective 30 days after its publication in the Federal Register.