Consumer Financial Protection Bureau Law Blog

CFPB Issues Clarifications and Proposes Amendments to Ability to Repay and Mortgage Servicing Rules

On April 19, 2013, the Consumer Financial Protection Bureau (“CFPB”) issued proposed amendments and clarifications to its recently issued Ability to Repay Rule and Qualified Mortgage Rule and the Mortgage Servicing Rule.  As readers of the CFPB-Lawblog recall, these rules were issued just days before Dodd-Frank Act’s January 21 deadline, so it is no surprise that CFPB is releasing these clarifications and amendments to clean up issues related to meeting that deadline. The purpose of these amendment and clarifications is, according to the CFPB, to “address purpose of these updates is to address important questions raised by industry, consumer groups, or other agencies” regarding these Rules.

 These amendments and clarifications address: (1) the determination of qualified mortgages under the Ability to Repay rule through the purchase, guarantee or insurance of mortgages by GSEs or Federal agencies; (2) the calculation of a borrower’s debt-to-income ratio (“DTI”) for purposes of originating qualified mortgages under the Ability to Repay rule; (3) Regulation X preemption of state law concerning mortgage servicing; and (4) the scope and application of the small servicers exemption for the requirements under Regulation X.  The CFPB also advised that is plans on issuing similar amendments and clarifications to other rules related to mortgages and mortgage servicing in the next few months. The CFPB claims that it is issuing these amendments and clarifications because of its “responsibility not just to write a rule, but to see that it is implemented effectively." Read More ›

CFPB Implementation Strategy for New Mortgage Rules

Although the CFPB’s new mortgage rules (“Mortgage Rules”) are less than a month old and do not go into effective until January 10, 2014, the CFPB is not wasting any time putting the mortgage industry on notice that it expects these rules to be “implemented accurately and expeditiously.” Today, the Bureau announced that it will be implenting a plan over the course of this year “that focuses on the mortgage industry’s compliance with new consumer protections.” While the full extent of the CFPB’s implementation “plan” is unknown, today’s announcement provides an insight into the CFPB’s expectations of mortgage industry. Read More ›

FFIEC Proposes Social Media Guidance

Last week, the Federal Financial Institutions Examination Council (“FFIEC”) issued proposed risk management guidance regarding the use of social media by financial institutions, including banks, credit unions, and non-bank entities supervised by the Consumer Financial Protection Bureau (CFPB). The proposed guidance calls on these institutions to develop and maintain risk management programs to identify, measure, monitor, and control the risks of social media. The proposed guidance, according to the FFIEC is intended to assist financial institutions identify, oversee and manage the potential risk associated with the use of social media to attract and interact with customers. The guidance is also intended to assist these institutions in addressing the applicability of existing federal consumer protection laws and regulations that may be implicated by the use of social media. Read More ›

CFPB Issues New National Mortgage Servicing Rules

Today, the Consumer Financial Protection Bureau (CFPB) issued the expected mortgage servicing final rules. At over 1,000 pages, the final rules will amend the Truth in Lending Act (Regulation Z) and the Real Estate Settlement Procedures Act (Regulation X). Consistent with the Bureau’s proposal, the rules cover nine major topics and implement the mortgage servicing  provisions of Title XIV of  the Dodd-Frank Act. The rules, which will take effect on January 10, 2014, directly implement Congressionally-mandated servicing reforms but also include a host of required loss mitigation rules and processes. The CFPB promulgated these latter rules by way of its general rulemaking authority under RESPA provided in the Dodd-Frank Act, not pursuant to specific Dodd-Frank statutory provisions. In prepared remarks for today’s field hearing in Atlanta,  CFPB Director Cordray emphasized that these new rules are not only mandatory for mortgage servicers (with limited exceptions for smaller servicers), but “are backed by the full supervisory and enforcement authority that Congress has conferred upon [the CFPB].”  Read More ›

Congress Extends The CFPB’s Regulatory Authority and Limits Interest Rates Payday Lenders Can Charge Military Servicemembers

On December 30, 2012, Congress presented President Obama with the National Defense Authorization Act for Fiscal Year 2013 (H.R. 4310). While the Act is predominately focused on aspects of military spending, it contains notable amendments to the Military Lending Act of 2007 (MLA) that will extend the CFPB’s existing regulatory authority and limit interest rates that payday lenders can charge servicemembers and their dependents. President Obama is expected to sign the Act.  Read More ›

CFPB’s First Joint Enforcement Action with the States: Another Tool in the CFPB’s Arsenal

In the first joint enforcement action between the Bureau of Consumer Financial Protection (CFPB) and state regulators, a Florida payday lender has agreed to enter into a consent order requiring $105,000 in restitution and other payments. The consent order (Order), entered in the U.S. District Court for the Southern District of Florida, is directed against Payday Loan Debt Solution, Inc. (PLDS) for alleged violations of numerous state consumer protection laws, the federal Telemarketing Sales Rule (16 C.F.R. § 310), and various provisions of the Dodd-Frank Act (12 U.S.C. §§ 5481, 5531, 5536, 5564 and 5581). Read More ›