May 2012

On May 23, 2012, the CFPB published an advanced notice of proposed rulemaking (ANPR) that proposes to extend Regulation E protections to GPR cards. The CFPB’s release of this ANPR coincided with the CFPB’s scheduled hearing in Durham, North Carolina on the same subject. We previously issued an e-alert summarizing the ANPR and wanted to provide some further thoughts and commentary on the ANPR.… Continue Reading

Last week, the CFPB proposed procedures for asserting its supervisory authority over nonbanks engaged in conduct that poses risk to consumers. Under the Dodd-Frank Act, the CFPB has authority to supervise a nonbank, regardless of its size, that the CFPB has reasonable cause to determine “is engaging, or has engaged, in conduct that poses risks to consumers with regard to the offering or provision of consumer financial products or services.”
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U.S. Representatives Capito (R, WV) and Sherman (D, CA) are circulating a draft of a letter on the Hill which urges the CFPB to “craft a safe harbor [in the Ability to Repay/QM rule] that strikes the right balance between protecting consumers from poorly underwritten mortgages while ensuring they have access to safe and affordable mortgage products.”… Continue Reading

We can’t help finding a bit of irony in the Government Accountability Office’s report issued on May 21 that discusses seven internal control issues the GAO identified during its audit of the CFPB’s fiscal year 2011 statements. According to the report, the issues identified by the GAO increase the risk of the CFPB “not preventing or promptly detecting and
correcting (1) misappropriation of assets because of insufficient internal controls; (2) unauthorized access, modification, or both of its data; and (3) misstatements in its financial statements.”… Continue Reading

Today, the CFPB proposed a rule setting up procedures for supervising non-banks that the CFPB believes are engaging in, or may have engaged in, activities that pose risks to consumers. Under the Dodd-Frank Act, the CFPB has authority to supervise any nonbank that it has reasonable cause to determine is engaging in, or has engaged, in conduct that poses risks to consumers with regard to the offering or provision of consumer financial products or services based on complaints and any other information it receives.… Continue Reading

The Supreme Court’s unanimous decision released today in Freeman v. Quicken Loans  marks a defeat for the CFPB in the interpretation of RESPA, but also serves to underscore that administrative agencies are not free to expand federal consumer protection statutes beyond the boundaries established by Congress. Just like the district court’s decision in the Premier Bank case, Freeman makes it clear that the industry can — and should — oppose the CFPB’s efforts to add prohibitions to federal laws that Congress did not provide for in those laws. … Continue Reading

Credit CardsToday, the CFPB issued an Advance Notice of Proposed Rulemaking (ANPR)  in which the CFPB states that it “intends to issue a proposal to extend the Regulation E protections” to general purpose, reloadable prepaid cards (GPR cards). In the ANPR, the CFPB requests public input on ten questions it has grouped into four categories: (1) regulatory coverage of GPR cards (2) GPR card fees and disclosures, (3) GPR card features, and (4) other information on GPR cards.… Continue Reading

Last week, the American Banker reported  that while the legislative “fix” to the CFPB privilege waiver problem is stalled in the Senate, an alternative version of the legislation is being circulated in Congress. This alternative version, being proposed by the American Financial Services Association, broadens the existing proposed legislation (HR 4014) principally by providing that privileged documents provided to the CFPB and then shared by the Bureau with a state banking regulatory agency remain privileged despite that sharing.… Continue Reading

Two recent notices published by the CFPB in the Federal Register shed some light on the CFPB’s plans for testing the mortgage servicing disclosures it’s developing and for collecting information about the potential compliance costs of its proposals.

A notice published on May 11 seeks comments on the CFPB’s plans to qualitatively test mortgage servicing related model forms and disclosures.… Continue Reading

The CFPB has announced that it will be holding a field hearing on prepaid cards in Durham, North Carolina on Wednesday, May 23, 2012. Director Cordray will be delivering remarks and testimony is expected from consumer and civil rights groups, industry representatives, and members of the public. The event is open to the public but an RSVP is required, which can be sent to cfpb.events@cfpb.govContinue Reading