Speculation abounds regarding what the CFPB’s expected 2015 rules regarding first party debt collectors will be. Here’s the background you need to know. On November 12, 2013, the CFPB issued an Advance Notice of Proposed Rulemaking, seeking comments to its proposal to update the Fair Debt Collection Practices Act (“FDCPA”). As…
On Monday, November 17, we briefly discussed the CFPB’s newly proposed prepaid card rules. Today we elaborate on these newly proposed rules, and their effect on issuers if these new rules are implemented by the CFPB. Scope: The CFPB explained what it considers to be a prepaid card for purposes of…
The CFPB recently proposed additional amendments to its Mortgage Servicing Rules which, if implemented, would provide additional protections for mortgage borrowers facing default or foreclosure. These amendments, which the CFPB announced on November 20, 2014, are the latest in a series of revisions to the Rules (which we have discussed…
On December 3, New York governor Andrew Cuomo announced the final version of the state Department of Financial Services (DFS) regulations governing debt collection actions by third-party debt collectors and debt buyers. The regulations contain a number of new requirements for third party debt collectors, including: New / Enhanced Initial…
According to the CFPB, Franklin Loan Corporation paid its loan officers $730,000 in quarterly bonuses over 26 months – but the bonuses were allegedly based in part on the interest rates on loans, thus violating the Loan Originator Compensation Rule in Regulation Z. As a result, the CFPB entered into a…
No readers of this blog would disagree that the Dodd-Frank Wall Street Reform and Consumer Protection Act transformed the legal landscape for banks and consumer finance companies. In the area of enforcement, two of the Act’s most significant changes were (1) the creation of the Consumer Financial Protection Bureau and…
On Thursday, the CFPB issued a request for public comment on its proposed rule to regulate prepaid financial products. The rule would amend Regulation E, which implements the Electronic Funds Transfer Act (EFTA), and Regulation Z, which implements the Truth In Lending Act (TILA). SCOPE The CFPB’s proposed rule would…
The latest CFPB Supervisory Highlights report details the Bureau’s concerns regarding student loan lenders. The report, which is the fifth edition of Supervisory Highlights, generally covers supervisory activities between March and June 2014. In it, the CFPB notes that its examiners found the following concerns when reviewing practices of student…
On October 22, the CFPB issued amendments to the Dodd-Frank Act mortgage rules that took effect in January 2014. The amendments include: ATR/QM Cure Provision: Under the Ability-to-Repay/Qualified Mortgage Rule, a mortgage loan must meet certain requirements to be considered a “qualified mortgage”. One such requirement is that the points and fees…
The Consumer Financial Protection Bureau (CFPB) has entered a consent order with a mortgage bank following CFPB’s allegations that the bank violated the new mortgage servicing rules. CFPB claimed that the bank: took an unreasonably long time to process borrowers’ applications for loan modifications or other foreclosure relief; failed to…
On September 16, the CFPB filed suit against Corinthian Colleges, Inc. in the Northern District of Illinois for engaging in alleged predatory student lending. This is the CFPB’s second predatory student lending suit against a for-profit college; the first being against ITT (reported by LenderLaw Watch here). The allegations and relief…
On September 23, the CFPB issued its final rule amending the regulation defining larger participants of certain consumer financial product and service markets specifically to add a definition for larger participants in the market for international money transfers. The rule defines such “larger participants” as those entities that have at least one million aggregate…
On September 10, 2014, the Federal Trade Commission (FTC) posted a comment in response to the Consumer Financial Protection Bureau’s (CFPB) request for information regarding the use of mobile banking services and products specifically utilized by economically vulnerable or underserved consumers. After briefly articulating some of the benefits of mobile…
On September 18, CFPB Director Richard Cordray delivered remarks at a Field Hearing about CFPB’s latest proposed rule, which would allow it to begin regulating “captive” finance companies – those entities owned by automotive manufacturers “for the primary purpose of facilitating sales for their parent companies and associated dealers.” In his…
The Federal Reserve Board recently made headlines when it repealed its Regulation AA to comply with the Dodd-Frank Act, leading some to wonder how, and to what extent, regulation of financial institutions might change going forward. But the federal agencies charged with regulating banking and credit activities have made it clear that they will continue to enforce prohibitions…
On September 3, 2014, the CFPB issued a Bulletin warning credit card issuers about deceptive marketing of promotional annual percentage rate (APR) offers. According to the CFPB, it has observed solicitations that offer an initial low APR for certain kinds of transactions (such as convenience checks, deferred interest rate purchases, or…
On June 26, 2014, the Government Accountability Office (GAO) issued a report entitled “Virtual Currencies: Emerging Regulatory, Law Enforcement, and Consumer Protection Challenges.” The report discusses the benefits and disadvantages of virtual currency and reviews efforts to date by federal agencies to regulate the virtual currency market. The report concludes…
On June 24, 2014, in response to the “increasing volume and sophistication of cyber threats,” the Federal Financial Institutions Examination Council (“FFIEC”) began a month-long cyber-security assessment of 500 community financial institutions and credit unions. Announcing what it dubbed a “pilot program,” the FFIEC—a formal, interagency body made up of…
Synchrony Bank (formerly known as GE Capital Retail Bank) made two direct mail offers to its credit card holders, but it did not send the offers to Spanish-speaking customers. The Bank self-reported its actions, resulting in consent orders with the Consumer Financial Protection Bureau and the Department of Justice, which…
On June 11, as a result of the growing use of mobile banking services across the country, the CFPB announced that it was conducting a request for information into the benefits and consequences of expanding mobile financial services. Its focus is underserved and remote communities, but any actions the CFPB…