On August 31, 2021, a new final rule amending Regulation X’s mortgage servicing rules for borrowers experiencing hardship due to COVID-19 will take effect. The Consumer Financial Protection Bureau (“CFPB”) hopes that these provisions will prevent a new foreclosure crisis when the majority of existing foreclosure moratoria implemented by state and federal governments expire over the course of this summer. A mastery of these new provisions will be essential knowledge for lenders, loan servicers, and their counsel in the coming months and years ahead.
Here are five major ...
On June 29, 2020, the United States Supreme Court held that the structure of the Consumer Financial Protection Bureau (“CFPB”) is unconstitutional. Specifically, the Court held that the CFPB director must be dischargeable at will by the president to prevent infringing upon the separation of powers between the legislative and the executive branches. Chief Justice John Roberts wrote the majority decision. The ruling may create an avenue to challenge nearly a decade’s worth of rulings and penalties issued by the CFPB since its creation in 2010.
Appellant Siela Law argued that ...
On April 29, 2020, the Consumer Financial Protection Bureau (CFPB) issued an interpretive rule allowing certain consumers to modify to waive certain waiting periods required under the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). Per the CFPB, this interpretive rule is intended to ease the way for consumers with urgent financial needs to obtain access to mortgage credit more quickly during the COVID-19 pandemic.
Ordinarily, the TILA-RESPA Integrated Disclosure (TRID) Rule imposes certain disclosure requirements and waiting periods ...
On April 14, 2020, the Consumer Financial Bureau (CFPB), Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA), Comptroller of the Currency (OCC), and Board of Governors of the Federal Reserve System (FRB) issued an interagency statement advising financial institutions of existing flexibilities and exceptions that may be useful during the COVID-19 pandemic with respect to real estate evaluations and appraisals.
- Physical Property Inspections
Currently, exterior and interior property inspections are not required by the appraisal ...
On April 13, 2020, twenty-three Attorneys General sent a joint letter urging the CFPB to withdraw its recent guidance on Fair Credit Reporting Act (FCRA) requirements during the COVID-19 crisis. The request came from Attorneys General of Pennsylvania, California, Colorado, the District of Columbia, Hawaii, Illinois, Iowa, Maine, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Puerto Rico, Rhode Island, Vermont, Virginia, Washington, and Wisconsin.
In the letter, the Attorneys General responded to the CFPB’s April 1 ...
On April 1, 2020, the Consumer Financial Protection Bureau (CFPB) issued a Statement on Supervisory and Enforcement Practices Regarding the Fair Credit Reporting Act and Regulation V in Light of the CARES Act (Policy Statement). To highlight the importance of credit reporting during the current crisis, the CFPB issued the Policy Statement to outline the responsibility of furnishers under the CARES Act, and its “flexibility” as it relates to compliance under the Fair Credit Reporting Act (FCRA) and Regulation V. Particularly, to better manage the crisis and maintain ...
On April 1, 2020, the Consumer Financial Protection Bureau ("CFPB") released a policy statement providing guidance on credit reporting companies' and furnishers' responsibilities during COVID-19. The CFPB's policy statement encourages lenders to voluntarily provide relief and to accurately report any relief to credit bureaus. The policy statement further indicates furnishers should comply with the CARES Act, which, with certain exceptions, requires lenders to report accounts as current if consumers have sought relief from their lenders due to the pandemic, or, if an ...
On October 18, 2019, the Supreme Court granted the petition for a writ of certiorari filed in Seila Law LLC v. Consumer Financial Protection Bureau. In granting the petition, the Court agreed to take up two distinct issues. First, whether the vesting of substantial executive authority in the Consumer Financial Protection Bureau (“CFPB”), an independent agency led by a single director, violates the separation of powers clause of the Constitution. Second, if the Consumer Financial Protection Bureau is found unconstitutional on the basis of the separation of powers, whether 12 ...
On May 7, 2019, the Consumer Financial Protection Bureau (“Bureau” or “CFPB”) issued a Notice of Proposed Rulemaking (“NPRM”) to implement the Fair Debt Collection Practices Act (“FDCPA”). The full NPRM is 538 pages and can be found here. Among other things, the proposal attempts to set limits on the number of calls that debt collectors may place on a weekly basis, clarify how collectors may communicate using new technologies and require collectors to provide additional information to consumers to help them identify debts. The Bureau has set a deadline of Monday ...
The Consumer Financial Protection Bureau ("CFPB") issued updated examination procedures it will use to assess lender compliance with the Military Lending Act rule ("MLA"). The MLA rule was amended in 2015 and the new requirements for lines of credit, installment loans, and deposit advances go into effect on October 3, 2016. Credit card issuers have a later compliance date of October 3, 2017. The MLA applies to active duty servicemembers and covered dependents. The amendment expands the types of products covered by the MLA, requiring enhanced disclosures, and restricting loan ...
The Consumer Financial Protection Bureau (CFPB) released a special edition of its supervision report, honing in on mortgage servicers on June 22nd [1]. It blamed outdated technology and process breakdown for trends it has seen with violations of the CFPB's 2014 servicing rules. The primary areas of concern are communications and data related to loan modifications and servicing transfers.
Among the highlights of the report, CFPB examiners found that "information about loan modifications is late, incorrect, or deceptive, due to technological breakdowns or malfunctions ...
*Co-authored by Charles Davis [1]
On May 5, 2016, the Consumer Financial Protection Bureau ("CFPB") held its fourth field hearing on Arbitration and issued a proposed Rule that would prohibit the use of arbitration clauses that block consumers' participation in class actions in contracts for consumer financial products and services. The Rule would also require providers who use pre-dispute arbitration agreements to submit certain records relating to arbitral proceedings to the CFPB. The Rule is expected to take effect during the summer of 2017.
Upon issuance of the Final Rule ...
On April 25, the Consumer Financial Protection Bureau ("CFPB") entered into a Consent Order with a New Jersey debt collection law firm, Pressler & Pressler, LLP, and two of its managing partners, Sheldon H. Pressler, and Gerard J. Felt (collectively "the Firm").[1]
The Firm agreed to pay a civil penalty of $1 million dollars in addition to adhering to the provisions contained within the Order. This Order raises questions about whether there is or should be a limit to the federal regulation of attorney practice and litigation strategy. The CFPB appears to be asserting authority ...
The CFPB received a lesson in the importance of specificity on April 21st when the United States District Court for the District of Columbia's Judge Richard J. Leon found that it overreached in its attempt to enforce a Civil Investigative Demand ("CID") it served on the Accrediting Council for Independent Colleges and Schools ("ACICS").
The Opinion warned the CFPB to be "especially prudent before choosing to plow head long into fields not clearly ceded to them by Congress". Yet the takeaway for the CFPB is likely one related to the editing of its CID language rather than a true ...
In Cooper v. Fay Servicing, LLC, 2015 WL 4470213 (S.D. Ohio July 17, 2015), the mortgagors sued the servicer of their real estate loan asserting claims for alleged violations of Regulation X relating to the loss mitigation process. Critical to this case was the timing of the loss mitigation process that resulted in the alleged Regulation X violations, the date of the foreclosure filing, and the date of the foreclosure sale. Specifically, the foreclosure proceeding was initiated on January 4, 2014, six days prior to the effective date of the CFPB's new Mortgage Rules, while the alleged ...
Beginning August 31, 2015, the CFPB will begin supervising nonbank auto finance companies pursuant to 12 C.F.R. 1090.108. The Final Rule provides that auto finance companies that qualify as "larger participants of a market for automobile financing" will be subject to the new regulation. The Dodd-Frank Act gave the CFPB supervisory authority over "larger participants" of certain markets for consumer financial products or services, as defined by the CFPB. See 12 U.S.C. 5514(a)(1)(B). In June 2015, the CFPB finalized its larger participant regulation as it relates to the ...
The FTC and CFPB recently filed an amici curae brief supporting the U.S. District Court for the Central District of Illinois's decision denying defendants' motion to dismiss Plaintiff Juanita Delgado's Fair Debt Collection Practices Act ("FDCPA") claims. The brief was filed in connection with the CFPB's amicus program, which was announced in August 2012. In Delgado v. Capital Management Services, LP, Case No. 13-2030 (7th Cir. Aug. 14, 2013), Delgado filed a putative class action against a defendant debt collector and its affiliated companies alleging violations of the FDCPA ...
Frank Springfield and Zachary Miller have written an article for the Business Law Section of the American Bar Association that was published in the Business Law Today. The article addresses the Consumer Financial Protection Bureau's ("CFPB") rule defining "larger participants" in the consumer debt collection market and the impact that the CFPB will have on the collection industry. The article also highlights changes that can be expected for attorneys practicing in this industry and recent decisions released by federal courts addressing the scope of the Fair Debt Collection ...