November 2014

The CFPB issued a proposed rulemaking last week to amend various provisions of the mortgage servicing rules under Regulation X and Regulation Z. Comments are due 90 days from the date of publication in the Federal Register. Ballard Spahr’s Mortgage Banking Group will continue to analyze the proposal and work with our clients and industry groups on its impact.… Continue Reading

The U.S. Supreme Court has set January 21, 2015 as the date for oral argument in
Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc., which is the case presenting the issue whether disparate impact claims are cognizable under the Fair Housing Act.  The petitioners’ merits brief was filed on November 17th.… Continue Reading

The CFPB’s first publicly announced criminal referral has resulted in a nine-year sentence for the principal of a debt settlement company, who pled guilty to several of the charges.  The referral, which was made to the U.S. Attorney for the Southern District of New York, arose out of the CFPB’s investigation of two debt-relief service providers and related entities and was announced by Director Cordray at a May 2013 press conference. … Continue Reading

CFPB Assistant Director for Servicemember Affairs Holly Petraeus has issued a statement applauding changes to the military discretionary allotment system announced last week by the Department of Defense (DoD).

The military discretionary allotment system allows servicemembers to automatically direct a portion of their paycheck to financial institutions or others of their choosing. … Continue Reading

A study of indirect auto financing commissioned by the American Financial Services Association found that the CFPB’s proxy methodology for measuring disparities in auto dealer reserve is “conceptually flawed in its application and subject to significant bias and estimation error.”  Among the study’s other key findings was that the CFPB’s preferred alternative dealer “compensation” methods, namely the use of a fixed fee, fixed percentage of the amount financed, or hybrid of the two, may increase the cost of credit for consumers.… Continue Reading

Based on the CFPB’s Fall 2014 rulemaking agenda, proposed rules dealing with payday loans/deposit advance products, overdrafts, and debt collection are still months away.

The CFPB’s timetables for “prerule activities” are February 2015 for payday loans/deposit advance products, July 2015 for overdrafts, and April 2015 for debt collection.  The CFPB’s Spring 2014 agenda had given timetables for “prerule activities” of September 2014 for payday loans and deposit advance products, February 2015 for overdrafts, and December 2014 for debt collection.… Continue Reading

Director Cordray’s remarks to the Clearing House yesterday should unsettle bankers and payday lenders alike. In his talk, Director Cordray challenged bankers to bow to the inevitable. He suggested that sooner, rather than later, the industry should invest the billions of dollars required to build a payment system with “faster and even real-time payments” where “the interests of consumers remain at the top of [bankers’] minds.”… Continue Reading

On November 18, 2014, the CFPB staff and Federal Reserve Board co-hosted a webinar that addressed questions about the Final TILA-RESPA Integrated Disclosure Rule that will be effective for applications received by creditors or mortgage brokers on or after August 1, 2015.  The webinar focused on the Closing Disclosure and addressed specific questions regarding the content of the Closing Disclosure.… Continue Reading

The CFPB has issued its financial report for its 2014 fiscal year, which ended on September 30, 2014.  Perhaps most illustrative of the CFPB’s growth are the report’s statistics on the CFPB’s employees and funding.  The report indicates that the number of CFPB employees grew from 663 in FY 2011 to 1,443 in FY 2014. … Continue Reading