CFPB Report - June 26, 2015

CFPB Releases Supervisory Highlights
 On Tuesday, June 23, 2015 the CFPB released its eighth edition of the Supervisory Highlights, which specifically addressed areas of consumer reporting, debt collection, student loan servicing, mortgage origination, mortgage servicing, and fair lending.
 
According to the CFPB, the recent supervisory resolutions have resulted in remediation of approximately $11.6 million to more than 80,000 consumers. Notably, the Highlights included a section titled, "Supervision Program Developments," that explained the Potential Action and Request for Response letter and Action Review Committee process of determining whether an action will be pursued in supervision or enforcement.
 
CFPB Issues Proposal on TRID
On Wednesday, June 24, 2015 the CFPB issued a proposed amendment to the Know Before You Owe mortgage disclosure rule, to move the rule's effective date to Saturday, October 3, 2015. The rule, also called the TILA-RESPA Integrated Disclosure rule or TRID, requires easier-to-use mortgage disclosure forms that clearly lay out the terms of a mortgage for a homebuyer. The Bureau is issuing the proposal to correct an administrative error that would have delayed the effective date of the rule by at least two weeks, until Saturday, August 15, 2015 at the earliest.
 
The CFPB is proposing a new effective date of Saturday, October 3, 2015. The proposal will be open for comment until Tuesday, July 7, 2015.
 
CFPB Goes Live with Complaint Narratives
On Thursday, June 25, 2015 the CFPB began publishing narratives on their Consumer Complaint Database. In the announcement, the CFPB indicated the consumers can search for specific product names or features; specific company practices and problems; and information by state. This action was the result of the final policy statement released in March 2015 and proposal released July 2014, on which CBA submitted comment.
 
Along with the narratives, the CFPB released notice and request for comment asking for feedback on best practices for "normalizing" the raw complaint data to make the data easier for the public to use and understand. Comments are due 60 days from publication in the Federal Register.
 
In response, Richard Hunt, CBA President and CEO, made the following statement:
 
"We are pleased the CFPB agrees with us on the need to normalize the complaint data and is seeking comment on the best approaches. This is a step in the right direction.

However, we are profoundly disappointed the Bureau is releasing the public narratives. In my opinion, the vast majority of banks will choose not to respond publicly, but will continue the long held tradition of speaking with their customers in confidence. Publishing unverified one-sided narratives does not benefit consumers. The CFPB prides itself on being a data-driven agency, but today's action is simply a public shaming of banks."
 
CFPB's Chopra heads to Center for American Progress
 On Wednesday, June 17, 2015 media outlets circulated the resignation letter of the CFPB's Student Loan Ombudsman, Rohit Chopra, to Treasury Secretary Lew. As the agency's first individual to hold the post, Chopra was well-known for his criticism of the private student lenders, student loan servicers, debt collectors, and for-profit colleges. Seth Frothman will serve as the interim head of the ombudsman's office.
 
On Wednesday, June 24, 2015 the Center for American Progress (CAP) welcomed Chopra as a Senior Fellow – a role in which he is expected to continue to focus on student debt issues. "We are thrilled to welcome Rohit Chopra, one of the leading voices on student debt reform, to the Center for American Progress," said Carmel Martin, the Executive Vice President for Policy at CAP. "Rohit's deep knowledge of the student loan crisis will be a tremendous asset as CAP works to make needed fixes."
 
House Financial Services Committee Hearing on Employee Discrimination and Retaliation at the CFPB
On Thursday, June 25, 2015 the House Financial Services Subcommittee on Oversight and Investigations held a hearing entitled, "Examining Continuing Allegations of Discrimination and Retaliation at the Consumer Financial Protection Bureau." Witnesses included Ms. Florine Williams, Senior Equal Employment Specialist at the Office of Civil Rights at the CFPB and Mr. Robert Cauldwell, President, to the National Treasury Employees Union at the CFPB.
 
Subcommittee Chairman Sean Duffy (R-WI) stated, "Of all the federal financial agencies, the CFPB has the worst track record of protecting its own employees against discrimination. The per capita number of Equal Employment Opportunity complaints at the CFPB is far higher than at other federal agencies. Despite disturbing reports of low morale and Congressional investigations, the leadership at the CFPB continues to turn a blind eye to the treatment of its own people." Subcommittee Ranking Member Al Green (D-TX), Full Committee Ranking Member Maxine Waters (D-CA), and Rep. Keith Ellison (D-MN) indicated that this hearing was being used as a tool to undermine the credibility of an agency that many on the Republican side do not want to see in existence and urged the committee to address other areas of discrimination in lending.

Supreme Court Rules Disparate Impact Applies Under the Fair Housing Act
On Thursday, June 25, 2015 the U.S. Supreme Court issued its long-awaited decision in Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc., the seminal case addressing whether the Fair Housing Act (FHA) encompasses "disparate impact" liability. In a 5-4 decision, the Court ruled disparate impact applies under FHA, with Justice Anthony Kennedy writing the opinion for the majority and Justices Clarence Thomas and Samuel Alito filing dissenting opinions.