On April 13th the Consumer Financial Protection Bureau (CFPB) released a bulletin clarifying that financial institutions may be held responsible for the actions of the companies with which they contract. The other federal bank regulatory agencies have held the same position for years. Banks and nonbanks contract with service providers for a number of reasons. They may use service providers to develop and market additional products or services or to provide expertise. Banks may also […]
Category: CFPB
CFPB – A CONTINUATION OF THE SAME OLD STORY
It is not that often that a new federal financial institution regulatory agency is created, but when it happens one can only hope for something better than what existed before. But the Consumer Financial Protection Bureau (CFPB) continues to disappoint. The latest disappointment is relatively minor. In their regulatory agenda published last fall the CFPB stated that final rules revising Regulation Z provisions dealing with the borrower’s ability to repay would be published in April […]
SERVICING RULES – PREVIEW
Recently the Consumer Financial Protection Bureau outlined major new rules that impact mortgage loan servicing. The rules, which revise the Truth in Lending Act and the Real Estate Settlement Procedures Act, are required by the Dodd-Frank Act. Under the rules servicers must: Provide periodic statements for all residential mortgage loans; Provide a new notice 6 months prior to interest rate reset on ARM loans; Provide notices and establish other requirements for force-placed insurance; Credit payments […]
TALK ABOUT BEING STUCK IN THE MIDDLE
Recently two members of Congress, Neugebauer (R-TX) and Capito (R-WV), asked Richard Cordrey, Director of the Consumer Financial Protection Bureau (CFPB), for assurances that the CFP will conduct a cost-benefit analysis for each rule it enacts, as required by the Dodd-Frank Act. Section 1022 of the Dodd-Frank Act requires the CFPB to consider the potential benefits and costs of any proposed rule. Congress passes the law that requires the CFPB to adopt a new rule. […]
CFPB BULLETIN 2012-04 –FAIR LENDING
On April 18, 2012 the Consumer Financial Protection Bureau issued CFPB Bulletin 2012-04 that explains the agency’s position on compliance with the Equal Credit Opportunity Act and Regulation B. The bulletin does not offer any new insights into Fair Lending issues, but the CFPB certainly makes it clear that the agency is focusing on fair lending issues not only in mortgage lending, but also in credit cards, student loans and auto loans. A copy of […]