On November 24, 2015, Republicans on the House Financial Services Committee released a report sharply criticizing the CFPB’s methodology for enforcing the Equal Credit Opportunity Act (ECOA) with regard to indirect automobile lending. The report, entitled, “Unsafe at Any Bureaucracy: CFPB Junk Science and Indirect Auto Lending,” adds to the…
A month has passed since the new TILA-RESPA Integrated Disclosure (“TRID” or “Know Before You Owe”) requirements went into effect on October 3, 2015, and while the transition has not been completely smooth, it has gone better than many expected. Below is a recap of some of the issues that…
In August, the CFPB issued a compliance bulletin to clarify lenders’ obligations to terminate Private Mortgage Insurance (PMI) charges under 12 U.S.C. § 4902. One subject that the bulletin did not address—but which is somewhat ambiguous—is how to calculate when PMI must be terminated after a loan is modified. Unless a borrower…
Earlier this month, the CFPB announced that it may propose rules designed to curtail or eliminate class-action waivers from arbitration clauses. Arbitration clauses appear in most financial-services contracts to provide both parties with a cheaper alternative to litigation. Dubbing such clauses “a free pass [to] sidestep the legal system, avoid…
The CFPB issued a new report on September 29, 2015, making clear that it is targeting student loan servicing for a set of industry-wide reforms. Servicers should be on notice that the CFPB is reviewing new standards for them to follow. The CFPB report is the result of a public inquiry…
Arguably the most pressing topic at this year’s Mortgage Bankers Association’s (MBA) Regulatory Compliance Conference (held on September 20-22, 2015 in Washington, D.C.) was the implementation of the TILA-RESPA Integrated Disclosure (TRID) Rule, which will take effect on October 3, 2015. While industry leaders at the conference generally seemed to accept…
*Editor’s Note: This post originally appeared on our sister blog, Consumer Finance Enforcement Watch. Visit CFEW for more real-time reporting on the full range of public federal and state consumer finance enforcement activity.* For the second quarter of 2015, Consumer Finance Enforcement Watch tracked 56 enforcement actions taken against consumer finance providers,…
Student lending continues to remain in the crosshairs of federal and state consumer finance regulators during the summer months, with over five enforcement actions and investigations in recent weeks. As covered in both LenderLaw Watch (LLW) and Consumer Finance Enforcement Watch (CFEW), this is a small part of a larger…
The Consumer Financial Protection Bureau (CFPB) has set its sights on debt collection practices again. In April, we wrote about the CFPB’s $63 million settlement with a mortgage servicer, Green Tree Mortgage, in part for Green Tree’s alleged treatment of mortgage debt. On July 8, 2015, the CFPB once again demonstrated it was…
On June 25, 2015, the CFPB published nearly 8,000 consumer complaint narratives on its website for the first time. The CFPB complaint database has been “live” since June 2012. However, the database initially included only basic, anonymized data about the nature of the complaint; including subject matter and a general…
On July 9, 2015, the CFPB published a set of Consumer Protection Principles it believes should guide the financial industry in the development of newer, faster methods of payment. These Principles, though merely suggestions, may help members of the financial industry anticipate the expectations of their regulators and develop new…
The Consumer Financial Protection Bureau’s recent action against two credit card vendors regarding credit monitoring and identity theft protection services is a reminder of the legal risks associated with certain add-on products. The July 1 settlement, in which the CFPB found that the vendors misled customers about the benefits of…
For the second time in recent weeks, the Consumer Financial Protection Bureau (CFPB) delayed the launch of the new integrated disclosures for residential mortgage loans under the Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA). The launch date, now set for Saturday, October 3, was announced…
On June 10, 2015, the CFPB issued a Final Rule amending the scope of its regulatory authority to include “larger participants” of the automobile financing industry. Under the Final Rule, the CFPB will supervise certain nonbank auto finance companies that (1) originate loans for the purchase of automobiles; (2) refinance…
Last week, the U.S. House of Representatives passed a Bill that would both more permanently install two advisory boards for the CFPB and cap the Bureau’s future funding. Principally, HR 1195 — the Bureau of Consumer Financial Protection Advisory Board Act — would force the Director to create three advisory…
The mortgage servicing industry remains under scrutiny, as evidenced by the recent joint enforcement action against Green Tree Servicing, LLC by the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC). In a joint complaint filed in Minnesota, the regulators allege that Green Tree, through its collection activities…
On March 26, 2015, CFPB Director Richard Cordray announced a proposed outline of changes to payday lending that would vastly alter the current rules and regulations. The new rules would address both short-term and longer-term credit products such as payday loans; deposit advance products; high-cost installment loans; certain other open-end lines…
On March 9, 2015, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray held oral arguments in the first appeal of a CFPB administrative enforcement action. Both counsel for the CFPB and Respondents PHH Mortgage Corporation and Atrium Insurance Corporation appealed to Cordray from the Administrative Law Judge’s (ALJ) Recommended Decision,…
On March 10, 2015, the Consumer Financial Protection Bureau (CFPB) released its Arbitration Study, which concludes that arbitration agreements in contracts associated with consumer financial products constrain consumers’ ability to assert their rights if a dispute arises. The study, which the CFPB was directed to carry out under Section 1028(a)…
On March 3, 2015 CFPB Director Richard Cordray appeared before the House Committee on Financial Services to deliver testimony regarding the Bureau’s work. Director Cordray spent much of his semiannual address touting the Bureau’s efforts in the mortgage space. In his written statement, Director Cordray commented on the Bureau’s Qualified…