CFPB Report July 12, 2013

Senate Rules Change Could Help Cordray be Confirmed

Senate Majority Leader Harry Reid (D-NV) and Senate Minority Leader Mitch McConnell (R-KY) continued a heavy debate this week over the so-called “nuclear option.” Current Senate rules allow for Executive Branch nominees to be filibustered, forcing a 60 vote majority from the Senate for a confirmation. Traditionally, the Senate requires 67 votes to change its rules; the controversial nuclear option would break this tradition by changing the rules with a simple majority. 

Reid continues to claim this is necessary to circumvent what some Democrats describe as an obstructionist Republican minority, while Senator McConnell has characterized the nuclear option as a power grab that would fundamentally change the Senate and how Washington functions. If Senate rules are changed so a simple majority can confirm Executive Branch nominees, Director Cordray would stand a much higher chance of confirmation.

CFPB Announces Actions on Debt Collection

On Wednesday, July 10, 2013, the CFPB announced it is undertaking three actions regarding debt collection. The Bureau issued a bulletin providing examples of potentially Unfair, Deceptive or Abusive behavior in debt collection; issued a bulletin providing guidance to creditors, debt buyers and third-party debt collectors about certain representations it finds to be deceptive under FDCPA, UDAAP or both; and expanded the consumer response portal to accept complaints about debt collectors and debt buyers through the CFPB’s website. Additionally, the Bureau provided five template “Action Letters for Consumers” to consider using when corresponding with debt collectors. 

On the same day in Portland, ME, the CFPB held a field hearing on debt collection. In prepared remarks, Director Cordray stated: “While many debt collectors play by the rules, and treat consumers fairly and respectfully, others try to get ahead by flouting the rules. Our job is to root out bad actors and protect consumers against unfair, deceptive, or abusive practices and other legal violations, which damage both consumers and also every debt collector that tries to operate within the law.”

House Subcommittee Questions CFPB on Data Collection

On Tuesday, July 9, 2013, the House Financial Services Subcommittee on Financial Institutions and Consumer Credit held a hearing entitled, “Examining How the Consumer Financial Protection Bureau Collects and Uses Consumer Data.” Steve Antonakes, CFPB Acting Deputy Director, testified. The hearing was precipitated by a Bloomberg story stating the CFPB has spent $20 million on data collection of over 10 million consumers – a major topic of discussion in a March 23, 2013, hearing in the Senate Banking Committee. Topics of discussion during the hearing included the Bureau’s transparency, the use of consumers’ personally identifiable information (PII), the security of this information, and the Bureau’s need for this data. 

Both Republicans and Democrats pushed for clear answers on exactly what constitutes PII and how the Bureau is making use of this information. Ranking Member Maloney (D-NY) recommended the Bureau publish a PII policy on its website. Congressman Duffy (R-WI) recommended an “opt in” policy for consumers. The lead Republican and Democrat on the Committee indicated they will pursue a GAO report to confirm the CFPB does not collect data any differently than the other financial regulators. 

A full summary of the hearing may be found here.

CFPB Releases Semi-annual Rulemaking Agenda

On Wednesday, July 3, 2013, the CFPB released its latest semi-annual rulemaking agenda in conjunction with a broader initiative led by the Office of Management and Budget (OMB) to publish aUnified Agenda of federal regulatory and deregulatory actions across the federal government. The CFPB agenda focused on supporting the implementation process for the recently finalized mortgage rules, and on clarifications and amendments to the rules to address questions raised by stakeholders. 

Of particular interest, the CFPB seems ready to act soon on a proposal to ease the requirement of providing annual privacy notices. This was one of the issues the Bureau raised in the earlier proposal to streamline its regulations. The Bureau also indicates it will move forward rulemakings to implement its supervisory program for certain nonbank entities.

CFPB Releases Mortgage Rules Readiness Guide

On Monday, July 8, 2013, the CFPB released a readiness guide for its recently finalized mortgage rules. Most of these rules are scheduled to take effect in January 2014. The guide includes a questionnaire banks can use as a self-assessment tool to determine their progress in developing an implementation plan, adjusting policies and procedures, training employees, handling complaints, managing third-party relationships, and other topics. 

The guide is aimed at assisting regulated entities with complying with the new rules, highlighting key areas that may be examined during a review, and focusing lenders on compliance management issues that may warrant further attention.

Federal Regulators Propose Appraisal Exemptions

On Wednesday, July 10, 2013, the CFPB, OCC, FDIC, Federal Reserve and two other federal financial regulatory agencies issued a proposed rule that would create exemptions from the appraisal requirements for higher-rate mortgage loans. The requirements are due to become effective in January of 2014; however, the rule would provide exemptions for loans of $25,000 or less, certain "streamlined" refinancings, and certain loans secured by manufactured housing. Comments on the proposal will be due 60 days after it is published in the Federal Register.