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Consumer Financial Protection Bureau Law Blog

CFPB Law Blog

News and analysisi of the priorities, initiatives and regulatory actions and proceedings of the Consumer Financial Protection Bureau

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Photo of Consumer Financial Protection Bureau Law Blog Arthur B. Axelson
Senior Counsel
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Showing 77 posts by Arthur B. Axelson.

Cordray: No Extension of Compliance Deadline for New Mortgage Rules, Even Though More Changes Are Still Coming

Earlier this week CFPB Director Cordray warned financial institutions not to expect an extension of the January 10, 2014 compliance deadline for the CFPB’s new mortgage rules. In a speech before the Exchequer Club, Cordray notified financial institutions that the CFPB “fully expect[s] all institutions to be in compliance by next January.”  During the same speech, however, Cordray also advised that the CFPB is expecting “to issue a second round of proposed changes shortly.” There is no word yet on what these changes might entail. While it is encouraging that the CFPB is listening to stakeholders and attempting to resolve any issues regarding the rules before they go into effect, one has to wonder, with less than seven months until the effective start date of these new mortgage rules and with Congress currently considering legislative changes to some of these rules, whether a steadfast adherence to the discretionary deadline of January 10, 2014 is in the best interest of consumers and financial industries. Nonetheless, mortgage lenders and servicers should continue with their implementation plans in anticipation of the January, 2014 compliance deadline.

Stay tuned as we follow the CFPB’s implementation

Arthur Axelson is the co-editor of the upcoming Consumer Financial Services Answer Book 2013-14, published by the Practising Law Institute, as well as the author of the chapter outlining the CFPB’s recent developments. Read More ›

CFPB Can't Wait for the Federal Register: Final Rules Deemed Issued When Posted to CFPB's Website

At the end of 2012, the CFPB released a final rule intended to speed up final issuance of pending rules by literally circumventing the publication practices of the Federal Register. Pursuant to a rule that became effective on December 28, 2012, the CFPB will deem one of its rules and regulations "issued upon the earlier of: (1) When the final rule is posted on the Bureau's Web site, or (2) when the final rule is published in the Federal Register." As most readers know, a rule is typically published in the Federal Register within a week or two after its final agency issuance, even though the text of regulations often are available before Federal Register publication. That apparently is not fast enough for the CFPB. This announced action by the CFPB represents a clear break from the long-standing practice followed by other federal regulators under the Administrative Procedure Act that considers a rule to be "issued" the date it is published in the Federal Register. Mary Dunn, Deputy General Counsel for the Credit Union National Association, called the CFPB's new Rule "a significant and important departure from customary practice." Because the CFPB likely will make the posting of a final rule on its website the effective date for the rule, instead of its publication date in the Federal Register, this new procedure will both accelerate effective dates and decrease the time that financial institutions will have to achieve compliance, and could leave others in the dark because of the failure to publish in the Federal Register. Read More ›

Bureau Continues to Influence Statutory and Regulatory Interpretations Through the Filing of Amicus Briefs

The CFPB has been quietly taking an active role in federal appellate cases initiated by private litigants. Since late 2011, the CFPB has filed six amicus curiae briefs in federal appellate cases. The CFPB’s position in each amicus curiae brief is the same: steadfast consumer advocate. In several of its amicus curiae briefs, the CFPB has even sought to reverse a general consensus among the federal appellate courts. Read More ›

Senators Ask CFPB to Address Medical Collections Reporting

Four U.S. Senators are asking the CFPB to address the impact of medical debt reporting practices on consumers’ ability to obtain credit. Senators Jeff Markley, Robert Menendez, Chuck Schumer and Sherrod Brown (the “Senators”) expressed the need to change medical debt reporting practices in a letter sent to CFPB director Richard Cordray on August 9, 2012.  Read More ›

CFPB and Department of Education Seek Bankruptcy Relief for Student Loans Issued by Private Lenders

The Department of Education (DOE) and the CFPB are pushing Congress to make it easier for students to discharge student debt issued by private lenders by filing for bankruptcy protection. The recommendations of the DOE and CFPB would not affect the majority of student debt, which is issued by the federal government, because federal loans already offer leniency in the form of deferrals, forbearance or more flexible payment options. No such cushion exists for private loans.  Read More ›

CFPB Investigating Mortgage Insurance Deals

The CFPB (Bureau) recently issued subpoenas to major financial institutions and insurance companies as part of an ongoing investigation into captive mortgage reinsurance deals. Those receiving subpoenas have included American International Group (AIG), MGIC Investment Corp., Genworth Financial, Radian Group Inc., and PHH Corp. The Bureau is probing whether insurers paid banks to win a slice of their mortgage insurance business in violation of the Real Estate Settlement Procedures Act (RESPA). Read More ›

CFPB Files First Civil Suit Against a Law Firm in the Central District of California

The CFPB filed its first enforcement action in federal court on July 18 under seal. The suit against a Los Angeles-based law firm and its corporate affiliates for allegedly running a mortgage refinance scam was released to the public on July 23. The suit marks the first time the CFPB has taken action in federal court against a non-bank financial services provider.  Read More ›

CFPB Proposes New Rule Requiring New Disclosures and Dissemination of Appraisals to Loan Applicants

This morning the CFPB issued a proposed rule requiring mortgage lenders to provide free copies of all written appraisals and valuations developed in connection with an application for a loan to be secured by a first lien on a dwelling no later than three days before closing, regardless of whether credit is extended, denied, incomplete or withdrawn.  This rule would modify the existing requirement of providing copies of written appraisals to consumers on request. Moreover, and in seeming contradiction to the CFPB’s general goal of reducing redundancy, the rule would also require creditors to notify applicants in writing -- at the time they submit a loan application -- of their right to receive a copy of each written appraisal or valuation.  That is, if the applicant is already receiving it by virtue of the proposed rule, it is entirely unclear why they would need to be informed of that right. Such a notification would make more sense if the consumer merely had an option to request the data. Read More ›

Senate Republican Drops Opposition to Confidentiality Bill

As previously reported in CFPB Alert Vol. 2, No. 6, a bipartisan bill that would ensure that regulated entities would maintain privilege when handing over documents to the Bureau, was stalled in the Senate due to concerns of some Republicans that the privilege language should be included as part of a legislative overhaul of the Dodd-Frank Act. On July 18, 2012, Senator Bob Corker (R-Tenn.) announced that he was dropping his opposition to the privilege bill on the basis that discussions for legislative changes to the Dodd-Frank Act were unlikely to occur prior to the election and he did not “want to interfere with any firm’s ability to adequately protect their customers’ privileged information.” Read More ›

Update on QM Rule

The CFPB continues to focus upon defining the term Qualified Mortgage (QM), while the consumer and industry groups attempt to influence the outcome. As discussed in earlier issues of the CFPB Alert, the QM rule will set forth criteria to determine whether a potential borrower can afford a mortgage. Read More ›