Dodd-Frank News Center

FDIC requests renewal of 'Resolution Plans' information collection

This story appeared in Bank Digest.                                   

The Federal Deposit Insurance Corporation is proposing to renew an existing information collection entitled "Resolution Plans Required for Insured Depository Institutions With $50 Billion or More in Total Assets." The collection is related to the requirement that an insured depository institution with $50 billion or more in total assets submit periodically to the FDIC a contingent plan for the resolution of the institution in the event of its failure. 

On July 30, 2018, the FDIC requested comment for 60 days on the proposal and is now giving notice of its plan to submit to the Office of Management and Budget a request to approve the renewal of the collection. Comments on the current notice must be submitted by Nov. 28, 2018.

CFPB settles with payday lender over debt collection practices

This story appeared in Bank Digest.                                   

A payday lender has agreed to pay a $200,000 penalty and $32,000 in restitution to settle Consumer Financial Protection Bureau charges arising from the company's methods of collecting unpaid loans. According to the Bureau, Cash Express, LLC, sent consumers dunning letters that misrepresented its collection methods and improperly withheld amounts needed to repay prior loans when it cashed subsequent checks for consumers. The company did not admit any violations of the law in agreeing to the settlement. 

According to the consent order, Cash Express and an affiliate, First Cash Express, LLC, provide short-term, small-dollar loans and check cashing services in Alabama, Kentucky, Mississippi, and Tennessee. Cash Express has been in operation since 1998. In addition to making the required payments, the two companies are obligated by the consent order to meet other conditions, including refraining from making certain misrepresentations and creating a compliance plan.

 

CFPB blog post highlights role of Ombudsman's Office

This story appeared in Bank Digest.                                   

A blog post by Consumer Financial Protection Bureau Ombudsman Wendy Kamenshine noted that October 11 was the first Ombuds Day, which she said was intended to increase awareness and understanding of the ombudsman profession. According to Kamenshine, an ombudsman "employs alternate ways to informally resolve conflict and advocates for a fair process rather than someone's desired outcome."                                  

She said the CFPB Ombudsman's Office is "an independent, impartial, and confidential resource that helps consumers, financial entities, and others, resolve process issues arising from their interactions with the Bureau. In short, we advocate for fair process in consumer financial protection." The post goes on to list ways the CFPB Ombudsman's Office provides assistance.

FDIC issues guidance on CFPB's rule clarifying HMDA amendments

This story appeared in Bank Digest.                                   

The Federal Deposit Insurance Corporation has issued a financial institution letter regarding the Consumer Financial Protection Bureau's interpretive and procedural rule to implement and clarify amendments to the Home Mortgage Disclosure Act made by the Economic Growth, Regulatory Relief, and Consumer Protection Act. According to the FDIC, the Economic Growth Act's HMDA amendments provide eligible insured depository institutions with a partial exemption from reporting certain data points with respect to closed-end mortgage loans, open-end lines of credit, or both. 

The CFPB's rule became effective on Sept. 7, 2018, but as interpreted by the Bureau, the HMDA amendments became effective when the Economic Growth Act was signed into law on May 24, 2018.

 

CFPB blog post discusses ways to increase income

This story appeared in Bank Digest.                                     

A Consumer Financial Protection Bureau blog post discusses ways consumers can increase their income in order to help pay down their debt and save money for the future. According to the author, the two main ways to increase income are: (1) a one-time activity, such as a garage sale; and (2) bringing in more money on a regular basis by getting a part-time job or applying for benefits you may qualify for. The post also includes a list of other ways to save money, as well as links to CFPB resources.

 

CFPB settles with companies over alleged delay in sending payments to third-party debt buyers

This story appeared in Bank Digest.                                   

The Consumer Financial Protection Bureau has reached a settlement with Bluestem Brands, Inc.; Bluestem Enterprises, Inc.; and Bluestem Sales, Inc. (the Bluestem companies) to resolve the Bureau's allegations that after consumers made payments to the Bluestem companies on debts that the companies had already sold, the Bluestem companies substantially delayed sending those payments to the third-party debt buyers. According to the CFPB's release, the Bluestem companies are headquartered in Eden Prairie, Minn., and do business throughout the United States under the names Fingerhut and Gettington.com. 

Under an administrative consent order, the Bluestem companies must pay a civil money penalty of $200,000 and improve their processes to timely identify and forward customer payments on accounts that they have sold to third-party debt buyers, among other conditions.

Sanders and Sherman introduce bill to cap size of financial institutions

This story appeared in Bank Digest.                                   

Senator Bernie Sanders (I-Vt) has introduced the Too Big to Fail, Too Big to Exist Act (S. 3542), which would break up the nation's biggest banks and risky financial institutions in order to safeguard the economy and prevent another costly taxpayer bailout. Representative Brad Sherman (D-Calif) will introduce a companion bill in the House. According to a press release issued by Sanders, the bill would cap the size of the largest financial institutions so that a company's total exposure is no more than 3 percent of GDP. 

The release said that by applying a cap on the size of financial institutions, the bill would break up the six largest banks in the country: JP Morgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley. The bill also addresses large nonbank financial service companies such as Prudential, MetLife, and AIG.

Waters introduces bill to support CFPB

This story appeared in Bank Digest.                                     

House Financial Services Committee Ranking Member Maxine Waters (D-Calif) has introduced the Consumers First Act (H.R. 6972), which a committee minority press release said was intended "to block the Trump Administration's anti-consumer agenda" and reverse the Administration's efforts, led by Consumer Financial Protection Bureau Acting Director Mick Mulvaney, to "dismantle" the Bureau. 

According to Waters, the bill "would reverse the harmful changes the Trump Administration has imposed on the Consumer Bureau by restoring the agency's supervisory and enforcement powers and increasing the transparency and accountability needed for the agency to carry out it's important mission."

Loudermilk introduces Financial Reporting Threshold Modernization Act

This story appeared in Bank Digest.                                   

Representative Barry Loudermilk (R-Ga) has introduced the Financial Reporting Threshold Modernization Act (H.R. 6850), which would raise the monetary thresholds for reporting certain financial transactions under the Bank Secrecy Act. 

According to Loudermilk, "The Bank Secrecy Act of 1970 has not been updated in almost five decades and has resulted in massive paperwork burdens on community banks, credit unions, payment processors, and other companies. The law requires these companies to send a report to law enforcement any time there is a single-day cash transaction of $10,000 or more, in an effort to track and combat money laundering and terrorism financing. But the law hasn't been adjusted for inflation since it was first enacted, and this threshold would be more than $60,000 in today's dollars." 

H.R. 6850 would raise the currency transaction report threshold from $10,000 to $30,000, the suspicious activity report threshold for financial institutions from $5,000 to $10,000, and the suspicious activity report threshold for money services businesses from $2,000 to $3,000.

CFPB issues guidance on its communication of supervisory expectations

This story appeared in Bank Digest. 

The Consumer Financial Protection Bureau has issued a bulletin announcing changes to how it articulates supervisory expectations to institutions in connection with supervisory events. According to the bulletin, the Bureau will continue to communicate findings to institutions in writing by way of examination reports and supervisory letters. 

Effective immediately, the Bureau said, those reports and letters will include two categories of findings that convey supervisory expectations: Matters Requiring Attention and Supervisory Recommendations. The uses of both categories are explained in the bulletin. 

 The CFPB said that neither MRAs nor SRs are legally enforceable but that the Bureau will consider an institution's response in addressing identified violations of federal consumer financial law, weaknesses in compliance management systems, or other noted concerns when assessing the institution's compliance rating or otherwise considering the risks the institution poses to consumers and markets.