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CFPB Report June 7, 2013
CFPB Expands Online Complaint Database
On Friday, May 31, 2013, the CFPB announced the addition of credit reporting and money transfer complaints to its online database. The CFPB began accepting credit complaints in October 2012, and has added more than 6,000 of these to the database. The Bureau began accepting complaints for money transfers in April 2013. Additionally, all types of complaints will now be searchable by state.
According to the database:
- The top states per capita by mortgage complaints are: 1) New Hampshire, 2) Maryland, 3) the District of Columbia, 4) Georgia, and 5) Florida.
- The top states per capita by credit card complaints are: 1) the District of Columbia, 2) Delaware, 3) Maryland, 4) New York, and 5) New Jersey.
- And, the top states per capita by bank account and service complaints are: 1) the District of Columbia, 2) Delaware, 3) New Jersey, 4) Rhode Island, and 5) Maryland.
CBA Comment Letter on Proposed Clarifications to the QM rule
On Monday, June 3, 2013, CBA submitted a comment letter to the CFPB on its proposed clarifications to the QM rule, specifically changes to:
- the determination of the QM status of a mortgage loan when it is purchased, guaranteed or insured by GSEs or Federal agencies;
- the calculation of a borrower’s DTI under Appendix Q of the ATR/QM Rule;
- the Regulation X preemption of State law as it pertains to mortgage servicing; and,
- the scope and application of the small servicer exemption under the Regulation X Servicing Rule.
Joint Trades Submit Letter to CFPB and HUD
On Tuesday, June 4, 2013, CBA a joint trade letter to the CFPB and The Department of Housing & Urban Development (“HUD”) for clarifications on the disparate impact rule regarding qualified mortgages. The associations asked for written guidance including a clear safe harbor from liability in areas where many federal mortgage standards conflict. The letter also discussed how illegal discrimination has no place in lending and supported its prohibition under the Fair Housing Act and Equal Credit Opportunity Act (“ECOA”). As the promulgated rules will tighten credit standards, the requirements may lead to disparate outcomes for some categories of borrowers. Without proper guidance, this could create great uncertainty in the marketplace. CBA will continue to seek industry answers and regulatory certainty.
CFPB Releases Exam Guidance on New Mortgage Rules
On Tuesday, June 4, 2013, the CFPB issued exam guidance detailing the agency’s plan to enforce the recently finalized mortgage rules. The rules, issued earlier this year, are scheduled to become effective on January 14, 2014. The guidance details exam procedures for a wide number of issues including:
- Qualifications and screening standards for loan originators,
- Prohibitions on steering incentives,
- Prohibitions on dual compensation,
- Protections for borrowers of higher-priced mortgage loans,
- Prohibitions on waiver of consumer rights,
- Prohibitions on mandatory arbitration,
- Lender requirements for providing appraisal reports and valuations, and
- Prohibitions on single premium credit insurance.
“The CFPB recognizes that the easier we make it for financial institutions and mortgage companies to follow the new regulations, the better off consumers will be,” said Director Cordray. “By releasing details of what our examiners will be looking for well in advance of the effective date of most of the rules, we are giving industry more time to adjust.”
CFPB to Conduct Consumer Survey for Arbitration in Credit Card Agreements
On Thursday, May 30, 2013, the CFPB submitted a request for comment on a proposed information collection titled, “Telephone Survey Exploring Consumer Awareness of and Perceptions Regarding Dispute Resolution Provisions in Credit Card Agreements.” The Bureau is seeking OMB approval to conduct a national telephone survey of 1,000 credit card holders as part of its study of mandatory pre-dispute arbitration agreements. Comments will be due August 6, 2013.
Debt Collection: Senator Brown Letter and Regulatory Roundtable
On Wednesday, June 5, 2013, Senator Sherrod Brown (D-OH) sent a letter to CFPB Director Cordray requesting rulemaking on debt collection policies that could lead to consumer abuses. Brown suggests a number of rules to reform the practice of the debt collection industry for both creditors and third-party actors.
“It’s hard enough when families aren’t able to make enough to pay their bills, but it’s tragic that families who are struggling to make ends meet are being hounded to make payments on debts that they have already paid off or that they never owed in the first place,” Brown said.
On Thursday, June 6, 2013, the FTC and CFPB held a joint roundtable entitled, "Life of Debt: Data Integrity in Debt Collection." Featured presentations from the regulators, Acting CFPB Deputy Director Steve Antonakes and FTC Commissioner Julie Brill, focused on information available to debt collectors at assignment or sale; collection of time-barred debt; debt collection litigation; and verifying disputed debt.
Commissioner Brill noted 25 percent of complaints received by the FTC deal with debt collection, whileAntonakes referred to debt collections as "another market in which consumers can't vote with their feet." He said record retention and data accuracy are a focus of the CFPB as it supervises debt collectors, and added creditors should make sure collectors receive the proper information.
Larry Tewell, Senior Vice-President of Consumer Credit Solutions at Wells Fargo and Vice-Chairman of CBA’s Default Management Committee, served on a panel devoted to improving information flows in the debt collection process.