November 2011

Section 1025 of Dodd-Frank gives the CFPB exclusive authority to examine insured banks, savings associations, and credit unions with total assets of more than $10 billion and their affiliates (“Large Institutions”) for compliance with federal consumer financial laws and primary authority to enforce those laws. For smaller institutions ($10 billion or less) and their affiliates, Section 1026 keeps examination and enforcement authority with the prudential regulators—the OCC, the Fed, the FDIC, and the NCUA.… Continue Reading

The Supreme Court recently granted certiorari in a case that may require the CFPB to re-write part of its recently-released Mortgage Servicing Examination Procedures. Magner v. Gallagher raises the issue of whether disparate impact claims are even cognizable under the Fair Housing Act, and will require the Supreme Court to decide that issue in the context of deferring (or not deferring) to a long-standing HUD interpretation of that Act to allow disparate impact claims.… Continue Reading

In a notice published in today’s Federal Register, the CFPB is seeking public comment on a series of questions about private student loans.  According to Rick Hackett, the CFPB’s Assistant Director for Installment Lending Markets, the CFPB wants to hear from “students, families, school counselors, lenders, servicers, and anyone who has anything to do with private student loans” because “hearing [their] stories will help [the CFPB] understand how people make decisions.” … Continue Reading

I will be speaking at the World Bank in Washington, D.C., on Thursday in a debate with Prof. Adam Levitin of Georgetown Law Center over the role of the CFPB.

The debate, “CFPB: Genesis, Development, Expectations,” is scheduled to begin at 9:30 a.m. in the Preston Auditorium at the World Bank Headquarters, in Washington, D.C.,… Continue Reading

We reported that they were coming and now they’re here. This week, on its website, the CFPB began taking comments on two draft designs of a disclosure that combines the final TILA disclosure and the RESPA HUD-1 Settlement Statement. A “consumer tool” asks consumers which form they would prefer to be given at closing to describe final loan terms and closing costs while an “industry tool” asks industry members “which format” they would prefer for their customer “to use at closing” to describe those items.… Continue Reading

The CFPB’s announcement that it will institute an “Early Warning Notice” process has generally been welcomed in the financial community as an opportunity for pre-litigation communications with the Office of Enforcement. The process, described in CFPB Bulletin 2011-08 [Enforcement] which includes a sample advance notice letter, appears to virtually mirror the SEC’s well-established Wells notice.… Continue Reading

The web has been abuzz about the letter that Majority Whip Richard Durbin (D. Il) and Jack Reed (D. RI) of the Banking Committee rather publicly sent to Raj Date last Thursday.   Purportedly out of concern that banks will try to “sneak fees past” consumers after having mostly abandoned the monthly debit card fee program, Senators Durbin and Reed “urge[d]” the CFPB to “swiftly require financial institutions to post on their websites a standardized, concise and consumer-friendly disclosure form that lists the fees and key terms associated with checking accounts.”… Continue Reading

Two notices with requests for comments recently published by the CFPB present prime opportunities for banks and other regulated institutions to engage with the CFPB not only to positively impact the CFPB’s processes and procedures, but also to demonstrate that banks seek to develop a relationship of cooperation and collaboration with the CFPB.… Continue Reading

On November 1, 2011, Raj Date made a presentation to the House Financial Services Committee, outlining what the CFPB has done in its first 100 days, and previewing some of its future plans.  In large part, the presentation served to underscore the CFPB’s accomplishments since July 21, including the development of the “Know Before You Owe” mortgage disclosure form, the similar disclosure relating to student loans, and the publication of the Bureau’s examination manuals. … Continue Reading

It’s clear from the recent testimony to Congress of Holly Petraeus, Assistant Director of the CFPB’s Office of Servicemembers Affairs, that the CFPB is looking closely at various kinds of loans made to military personnel and their family members. One category of loans on the CFPB’s hit list are private student loans to finance tuition at for-profit schools.… Continue Reading