The U.S. Supreme Court’s recent decision in Perez v. Mortgage Bankers Ass’n invalidated a significant line of  D.C. Circuit case law known, after the leading case, as the Paralyzed Veterans doctrine.  A case involving a series of contradictory Department of Labor interpretations of whether mortgage loan officers are exempt from minimum wage and overtime guarantees, Perez holds that the Paralyzed Veterans doctrine is incompatible with the plain language of the Administrative Procedure Act (APA) and impermissibly imposes notice-and-comment requirements on interpretive rules.… Continue Reading

Recently the CFPB joined the FDIC’s program against financial abuse of senior citizens by cooperating on the creation of a Spanish language tool for Hispanic seniors.  We have previously blogged about the CFPB’s initiatives to prevent elder financial abuse.  This new product is a Spanish-language version of a pre-existing FDIC publication in English, Money Smart for Older Adults, which is a financial resource tool that is distributed free of charge and is designed to help adults age 62 and older and their caregivers prevent, identify, and respond to elder financial exploitation.… Continue Reading

A September 29, 2014 Report of the Joint Federal Reserve/CFPB Office of the Inspector General (OIG) concluded that the CFPB’s rulemaking process generally complies with the requirements of Section 1100G of the Dodd-Frank legislation and offered only minor criticisms identifying potential improvements. Section 1100G amended the Regulatory Flexibility Act to require the Bureau to (A) assess the impact of any proposed rule on the cost of credit for small business entities through regulatory flexibility analyses and (B) to convene panels to seek direct input from small business entities prior to issuing certain rules.… Continue Reading

The CFPB has issued a final rule that will allow it to supervise nonbank international money transfer providers that qualify as “larger participants” in the international money transfer market.  Consistent with the proposed rule, the final rule defines larger participants as those providers that engage annually in 1 million or more international money transfers. … Continue Reading

NOTE: We intended to post this blog entry on the Monitor on July 30 but it was inadvertently omitted.

The CFPB, after an investigation in cooperation with 13 state attorneys general, has entered into a consent order with Colfax Capital Corporation, a California consumer lending company (Colfax), and its wholly-owned subsidiary, Culver Capital, LLC, a Georgia consumer lender (Culver) (formerly known as Rome Finance Co.… Continue Reading

A bill (H.R. 5062) recently passed by the House of Representatives would amend the Consumer Financial Protection Act (the CFPA), which is Title X of the Dodd-Frank legislation, to provide protection against waiver of state and federal law privileges for nondepository institutions supervised by the CFPB.

Entitled the “Examination and Supervisory Privilege Parity Act of 2014,” the bill received strong support from the American Financial Services Association (AFSA).… Continue Reading

As noted in our recent Alert, the Office of the Comptroller of the Currency (OCC) has issued Bulletin 2014-37 on Consumer Debt Sales (the “Bulletin”). The Bulletin addresses the application of consumer protection requirements and safe and sound banking practices to debt sales by OCC-supervised institutions (national banks and federal thrifts) of all sizes, including community banks.… Continue Reading

As part of their increased focus on cybersecurity, the CFPB and federal banking are taking steps to raise financial institutions’ awareness about the need for preparedness.  On June 24, 2014, the Federal Financial Institutions Examination Council (FFIEC) launched a web page that combines available resources from the federal regulators on cybersecurity. … Continue Reading

The most notable items added by the Office of Inspector General (OIG) to its work plan, updated as of July 7, 2014, are audits of the CFPB’s information security program, pay and compensation program, and distribution of civil penalty funds.

Information Security

Pursuant to the Federal Information Security Management Act of 2002 (“FISMA”), each agency Inspector General must annually evaluate the agency’s information security program.… Continue Reading

We had been expecting the CFPB’s next “larger participant” proposal to be a rule for the auto finance market.  Instead, the CFPB issued a proposed rule yesterday that would allow it to supervise nonbank international money transfer providers that qualify as “larger participants” in the international money transfer market.  The proposal is based on the CFPB’s Dodd-Frank authority to supervise nonbank entities considered to be “a larger participant of a market for other consumer financial products or services.” … Continue Reading