Archives: Consumer Financial Protection Bureau

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CFPB alleges disparate treatment in Amex’s US territories’ credit and collection practices

The Consumer Financial Protection Bureau (CFPB) has issued a Consent Order addressing alleged disparate treatment by banks in overseas territories of the United States.  The Consent Order illuminates the CFPB’s approach to disparate treatment claims and provides a caution for financial institutions in their collection practices. On Aug. 23, 2017, the CFPB issued a Consent … Continue Reading

CFPB Unveils Disclosure Forms in Response to Overutilization of Overdraft Fees

On Aug. 4, the Consumer Financial Protection Bureau (CFPB) released the results of its study into frequent overdrafters and four overdraft disclosure model forms as part of its Know Before You Owe initiative. The CFPB designed these one-page prototypes to help consumers understand the costs associated with opting into overdraft coverage and in an effort … Continue Reading

Revisiting the Enforceability of Class Action Waivers in Consumer Financial Contracts

On July 19, 2017, the Consumer Financial Protection Bureau (CFPB) published the final Arbitration Agreements Rule (the rule) that would impact the way claims involving consumer financial products and services are handled in the future. The rule prohibits providers of consumer financial products and services from relying on a predispute arbitration agreement that includes an … Continue Reading

CFPB Proposes Amendments to Align Regulation B with Revised Regulation C

On March 24, 2017, the Consumer Financial Protection Bureau (CFPB) proposed amendments to Regulation B to “provide additional flexibility for mortgage lenders concerning the collection of consumer demographic information.”  The amendments were also necessary to resolve the current rule and timing differences between Regulation B (Equal Credit Opportunity Act (ECOA)) and Regulation C (Home Mortgage … Continue Reading

D.C. Circuit Agrees to Hear Controversial PHH Case En Banc

On Feb. 16, 2017, the D.C. Circuit granted the CFPB’s petition to rehear en banc the court’s landmark October 2016 decision finding that the structure of the CFPB was unconstitutional. We covered the panel decision here. In its Feb. 16, 2017, order the D.C. Circuit directed the parties to brief three specific issues: (1)        … Continue Reading

CFPB Fines Lender and Real Estate Brokers for Improper Kickback Scheme

On Jan. 31, 2017, the Consumer Financial Protection Bureau (CFPB) filed consent orders against one of the largest independent residential mortgage lenders, two real estate brokers and a mortgage servicer for their roles in an improper “kickback” scheme involving mortgage referrals. The fines here were notable given that the CFPB targeted realtors for accepting payments … Continue Reading

CFPB Warns Mortgage Lenders and Brokers of Possible HMDA Violations

On Oct. 27, 2016, the Consumer Financial Protection Bureau (CFPB) warned 44 unnamed mortgage lenders and brokers that they may be in violation of data reporting requirements of the Home Mortgage Disclosure Act (HMDA). Enacted in 1975, HMDA requires financial institutions to collect data about housing-related lending activity – including home purchase loans, home improvement … Continue Reading

Federal Appellate Court Deems CFPB ‘Unconstitutionally Structured’ and Overturns PHH Penalty

On Oct. 11, the U.S. Court of Appeals for the D.C. Circuit deemed the Consumer Financial Protection Bureau (CFPB) “unconstitutionally structured” and overturned its enforcement action, including a $109 million penalty, against PHH Corp., a New Jersey-based mortgage lender. Despite its rulings, the D.C. Circuit made clear that the CFPB will continue to operate and … Continue Reading

CFPB Finalizes New Rules Governing Prepaid Card Products

On Oct. 5, 2016, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray announced a final rule governing the burgeoning consumer prepaid card industry. The CFPB estimates that the amount of money consumers load onto “general purpose reloadable” prepaid cards increased from less than $1 billion in 2003 to nearly $65 billion in 2012. The scope … Continue Reading

CFPB Fines TMX Finance LLC $9 Million for Unfair and Abusive Practices

On September 26, 2016, the Consumer Financial Protection Bureau (CFPB) entered into a consent order with one of the country’s largest auto title lenders, TMX Finance LLC, the parent company of TitleMax. The CFPB took action against TMX Finance for engaging in unfair, deceptive, and abusive lending acts and practices, and for engaging in unfair … Continue Reading

California District Court Delivers Payday Lending Usury Victory to the CFPB with Important Consequences for On-Line Lenders

  On August 31, Judge Walter of the Central District of California entered summary judgment in favor of the Consumer Finance Protection Bureau (“CFPB”) on its claims against CashCall, Inc. arising out of allegedly unfair and deceptive loan practices. The CFPB had sued payday lender CashCall and various affiliates for violations of the Consumer Financial … Continue Reading

CFPB Releases Proposed Amendments to Truth In Lending Disclosure Rules

Today, the CFPB released its proposed amendments to disclosure requirements under RESPA and TILA. These disclosure requirements are also known as the “Know Before You Owe” rule (the Rule). The amendments propose several notable changes: The CFPB proposes to change the way loan tolerances are calculated. Tolerance calculations will now include finance charges “and disclosures … Continue Reading

Consumer Financial Protection Bureau Announces Proposal to Overhaul the Debt Collection Market at Hearing in California

On July 28, 2016, the Consumer Financial Protection Bureau (“CFPB”) and Director Richard Cordray announced at a field hearing in Sacramento, California the CFPB’s proposals to overhaul the $13.7 billion dollar debt collection market, affecting about 70 million consumers nationwide. The CFPB will be proposing new regulations for third-party debt collectors and others covered by … Continue Reading

CFPB Releases Latest Supervisory Highlights Focused on Mortgage Servicing

The Consumer Financial Protection Bureau released their 11th edition of Supervisory highlights, a special edition with a direct warning to mortgage servicers.  The report typically shares findings and examination observations in various areas of oversight like student loan servicing, mortgage origination and debt collection.  However this edition focuses on mortgage servicing technology; loss mitigation acknowledgement … Continue Reading

CFPB Announces Dollar Threshold Adjustments to the Truth in Lending Act

The Consumer Financial Protection Bureau (CFPB) recently released a final rule amending the dollar thresholds in Regulation Z, which implements the Truth in Lending Act (TILA). The CFPB’s final rule has two primary effects. First, the final rule adjusts select dollar amounts in accordance with the annual change reflected in the Consumer Price Index – … Continue Reading

CFPB Releases Expansive Payday Lending Rule

The Consumer Financial Protection Bureau (CFPB) released its much anticipated proposed rule aimed at ending what it calls “payday lending debt cycles.” The 1,334-page rule will require small-dollar lenders to undertake comprehensive steps to ensure that the consumer has the ability to repay the short-term or high-cost installment loan. This proposed rule would be the … Continue Reading

CFPB Takes Enforcement Action Against Loan Officer for Alleged Mortgage Fee Kickback Scheme

Yesterday, the Consumer Financial Protection Bureau (CFPB) announced the issuance of a consent decree with a former mortgage loan officer arising out of alleged violations of the Real Estate Settlement Procedures Act’s (RESPA) anti-kickback laws and Dodd-Frank’s prohibition on unfair, deceptive or abusive acts or practices (UDAAP). The officer was required to pay an $85,000 … Continue Reading

CFPB to Announce Small-dollar Lending Rule on June 2

On May 18, 2016, the Consumer Financial Protection Bureau (CFPB) announced that it will hold a field hearing in Kansas City, Missouri, on June 2 regarding small-dollar lending, commonly referred to as payday lending. It is widely speculated that the CFPB will announce the long-awaited payday lending rules, which would be the first federal regulation for … Continue Reading

CFPB Announces Proposed Ban to Mandatory Class Action Waivers in Arbitration Agreements

On May 5, 2016, the Consumer Financial Protection Bureau (CFPB) announced the issuance of a Notice of Proposed Rulemaking soliciting comments on a proposed rule to prohibit covered institutions from including, in most core consumer contracts, “pre-dispute arbitration agreements” that contain class waivers. The proposed regulations would explicitly require the inclusion of the following disclaimer … Continue Reading

CFPB Announces $2.5 Million Fine, Compliance Monitoring for Deceptive Debt Collection Practices

On April 25, 2016, the Consumer Financial Protection Bureau (CFPB) entered into consent orders with a debt collection law firm, two of the firm’s principal partners, and New Century Financial Services, Inc., a company that purchases and collects consumer debts. The orders resolve allegations by the CFPB that each party violated the Fair Debt Collection … Continue Reading

CFPB Cannot Force For-Profit College Group to Comply With Investigative Demand

On April 21, the United States District Court for the District of Columbia ruled that due to a lack of authority under existing consumer protection laws, the Consumer Financial Protection Bureau (“CFPB”) cannot require a for-profit college accrediting group to comply with a civil investigative demand (“CID”) to determine the group’s method for accrediting schools. … Continue Reading

CFPB Announces May 5 Field Hearing on Arbitration

The CFPB announced that it is holding a field hearing on May 5, 2016, in Albuquerque, New Mexico, on arbitration. Previously, CFPB field hearings have resulted in the announcement of proposed rules. We anticipate that this field hearing could result in the release of the CFPB’s proposed rule on arbitration provisions in some consumer financial … Continue Reading

CFPB Identifies Hidden Costs and Fees Associated With Online Payday Loans

On April 20, 2016, the Consumer Financial Protection Bureau (CFPB) issued a report regarding online payday lenders’ efforts to debit payments from a borrower’s checking account. Based on an 18-month observation period, the report focused on the hidden costs of online payday and installment loans provided by over 330 lenders. The report is the latest … Continue Reading
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